A California Subcontractor Agreement can set forth the terms of an agreement between a general contractor and a subcontractor performing specialized work on a construction project. A written subcontractor agreement can include matters such as the scope of work to be performed, the amount and timing of payment, and other similar terms.
One provision that cannot be included in a subcontractor agreement is a waiver or indemnification clause, compensating the contractor for negligence claims for which the subcontractor is not specifically liable.
These types of indemnification terms, sometimes called “Type 1” indemnity clauses, are prohibited explicitly by California Civil Code § 2782.
A well-drafted California subcontractor agreement can help avoid disputes and ensure prompt and full payment for work performed.
In California, contractors and subcontractors are licensed by the Contractors State Licensing Board of the Department of Consumer Affairs. Their website contains important information about obtaining and maintaining a contractor or subcontractor’s license.
How long does a contractor have to pay a subcontractor in California?
Per California Business and Professions Code § 7108.5(a), when the general contractor receives a payment from the owner, they must pay subcontractors no later than seven days after receipt.