Frequently Asked Questions
What is a master agreement and how does it regulate the use of subcontractors?
A master agreement is a contract formed between a company and a contractor. This agreement outlines the project expectations, the tasks the contractor is expected to complete, the timeline for these tasks, and the payment for the work. Importantly, the master agreement also stipulates whether or not the contractor is permitted to hire subcontractors to assist with the project. Subcontractors are essentially contractors who work under other contractors. They are hired by the primary contractor to help complete specific parts of a project. The relationship between the contractor and subcontractor is regulated by a subcontractor agreement, which is similar to the master agreement but is signed between the contractor and the subcontractor. This agreement outlines the subcontractor's assignments and responsibilities, due dates for work, pay rates, and rules and regulations. The use of subcontractors is common in many industries, including construction and marketing. For instance, a primary contractor hired for a construction project may subcontract specific parts of the project to specialists. Similarly, a marketing firm that wins a bid for a job may hire subcontractors to handle design, writing, and editing tasks.
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