Many businesses that are contracted to provide goods or services, sub-contract elements of their obligations out to third parties. Any business that engages the services of a sub-contractor should do so under a Sub-Contractors Agreement. Some important points to note in respect of sub-contractor agreements are as follows:
- Failing to have an appropriate sub-contractor agreement in place could leave the original contractor’s business entirely liable to the customer for failings of the sub-contractor
- The agreement with the original customer needs to be carefully considering as it may not allow a business to sub-contract out its obligations (so any sub-contracting could be breach of contract)
- The specific nature of the relationship between the original contractor and the sub-contractor needs to be clearly defined - failing to do so could have considerable unexpected tax implications for the contractor.
If you are a business looking to engage the services of a sub-contractor or you act as a sub-contractor and require further information on sub-contractor agreements (or for advice on any other contract law matter), please contract Andrew Tzialli on 020 8422 5678 or by email at Andrew.Tzialli@haroldbenjamin.com
