General Sub-Contractor Agreement
When dealing with many kinds of services, particularly if specialist
knowledge or skills are required, it may often be the case that a service
provider (or “main contractor” in this context) wishes to sub-contract all
or part of the services they are contracted to provide.
If you wish to use this document in a scenario that involves personal data,
standard clauses for data protection and data processing
are available in our
GDPR & Data Protection Group.
This General Sub-Contractor Agreement is designed for use by an individual
sole trader working on a self-employed basis as a sub-contractor and has
been designed to be sufficiently broad to cover a range of different types
of work. The specific details which will be unique to each transaction
should be provided in a series of schedules, outside the main body of the
This document is designed for use alongside a general Service Agreement,
also available from Simply-Docs. The clauses in each document are designed
to mirror and/or complement each other. In particular, this General
Sub-Contractor Agreement includes a provision to the effect that it will
not come into force until the main contract does and will terminate
automatically in the event that the main contract is terminated (subject,
of course, to the obligation to make reasonable payment for any work
already completed by the sub-contractor).
Other key provisions in this document cover elements such as fees and
payment, insurance, confidentiality and liability.
This form of agreement emphasizes the individual’s status as an independent
sub-contractor, and under its terms he/she retains a degree of independence
in decision-making. It states that the individual is not employed by the
main contractor but is self employed. It provides that the main contractor
does not have to pay taxes, national insurance contributions, pensions,
benefits or similar. It states that the main contractor is to pay fees to
the sub-contractor, and it is up to the sub-contractor to pay any sums due
in respect of tax, national insurance etc.
This form of agreement aims to reduce the risk that the sub-contractor
might be deemed in law to be a de-facto employee of the main contractor
rather than (and as intended) a sole trader working on a self-employed
basis as a sub-contractor. However, whether he is treated by HMRC, an
employment tribunal, or any other body, as a self-employed contractor will
depend not just on the content of this contract. It will also depend on all
other circumstances, including the practical implementation of the
sub-contract, and the arrangements between, and conduct of, the main
contractor, the individual sub-contractor, and any person engaged by the
sub-contractor to carry out any of the services for the sub-contractor.
HMRC provides some guidance on its website about self-employment, but its
decisions as to whether someone is self-employed are often based on a
“balancing exercise” in which it gives weightings to various factors.
However, neither the HMRC guidance nor case law are sufficiently precise to
make it possible to predict how this “balancing exercise” would be carried
out or what the position will be in any situation. For that reason we
recommend that you take professional employment law, tax, and NIC advice in
relation to your particular circumstances before deciding to use or adapt
this form of agreement.
Nevertheless, a carefully worded sub-contract, ensuring the independence of
the individual sub-contractor is a key starting point. As a self-employed
individual rather than as an employee of, the main contractor, he/she is,
for example, free to provide a suitably qualified person in his/her place
rather than carry out some or all of the services personally, and is free
to determine when, where and how the services are completed (subject of
course to the main contractor’s and its client’s requirements).
We have also provided (in the Company Subcontractor Agreements subfolder) a
version of this template, the General Sub-Contractor (Company) Agreement,
to be used when the sub-contractor entering into the agreement with the
main contractor is a personal service company (or other intermediary
company) rather than the individual who provides the services for the main
contractor. Please see the information page accompanying that version for
guidance about tax, employment status, and IR35, where the sub-contractor
engaged is such an intermediary company, and the services are carried out
for the intermediary by the individual engaged by it.
Optional phrases / clauses are enclosed in square brackets. These should be
read carefully and selected so as to be compatible with one another. Unused
options should be removed from the document. (Please note in particular
Clause 7. If this clause is removed, the main clause numbers in the
document will update automatically. Cross-references within clauses,
however, will not and must be changed manually).
This Sub-Contractor Agreement contains the following clauses:
1. Definitions and Interpretation
2. Commencement Date
3. Engagement of the Sub-Contractor
4. Status of the Sub-Contractor
5. Sub-Contractor’s Obligations
6. Service Provider’s Obligations
[7. Provision of Equipment]
9. Fees and Payment
14. Force Majeure
15. Term and Termination
16. Effects of Termination
17. No Waiver
18. Further Assurance
20. Assignment and Sub-Contracting
22. Relationship of the Parties
23. Third Party Rights
25. Entire Agreement
28. Dispute Resolution
29. Law and Jurisdiction
and the following schedules:
1. The Main Contract
2. The Sub-Contracted Services
3. Sub-Contractor’s Fees
This document is in open format. Either enter the requisite details in the
highlighted fields or adjust the wording to suit your purposes.
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