A wide variety of skilled trades are active in the constuction industry. Engaging the specialized services of a subcontractor is often inevitable, and when doing so, it is best to contractually define the complex relationship between the contractor and a subcontractor.

An entrepreneur who is responsible for a realizing a work may choose to either designate a general contractor (manager) to perform such work on its behalf (see our Construction Management template F03400) or to engage a specialized subcontractor to perform a part of that work; in latter case, this template is recommended to govern the relationship between an entrepreneur and a subcontractor.

Executing a work often requires the intervention of multidisciplinary teams who are directed by a person who is responsible for coordinating and overseeing the work carried out by these teams. In this type of scenario, each team member performs its respective specialized tasks that are required to complete the work. Managing this type of project is often complicated as many actors are interdependent, which is why it is crucial to properly define those activities and the working relationships.

This template sets out the main elements of the legal and financial framework governing the manufacturing of equipment through a subcontracting agreement.

0.00 INTERPRETATION
0.01 Definitions
0.01.01 Activities
0.01.02 Adjustment Notice
0.01.03 Agreement
0.01.04 Best Effort
0.01.05 Breach
0.01.06 Change in Control
0.01.07 Client
0.01.08 Confidential Information
0.01.09 Delivery Note
0.01.10 Encumber or Encumbrance
0.01.11 Equipment
0.01.12 Event of Default
0.01.13 Force Majeure
0.01.14 Full Execution
0.01.15 Fundamental Provisions
0.01.16 Group
0.01.17 Initial Order
0.01.18 Intellectual Property
0.01.19 Legal Representatives
0.01.20 Modification Agreement
0.01.21 Modification Notice
0.01.22 Moulds
0.01.23 Other Orders
0.01.24 PARTY
0.01.25 Person
0.01.26 Prime Rate
0.01.27 Proposal
0.01.28 Purchase Order
0.01.29 Raw Materials
0.01.30 Related Person
0.01.31 Request for Proposals
0.01.32 Site
0.01.33 Specifications
0.01.34 Subsidiary
0.01.35 Technological Improvements
0.01.36 Technology
0.01.37 Template
0.01.38 Work
0.02 Precedence
0.02.01 Entire Agreement
0.02.02 Conflict of Interpretation
0.03 Jurisdiction
0.03.01 Governing Law
0.03.02 Non-compliance
0.04 Miscellaneous
0.04.01 Cumulative Rights
0.04.02 Time and Dates
0.04.03 Financial References
0.04.04 References within Agreement
0.04.05 Gender and Number
0.04.06 Headings
0.04.07 Presumptions
0.04.08 Knowledge
0.04.09 Approval
0.04.10 GAAP
1.00 PURPOSE
1.01 Grant
1.02 Conditions
1.02.01 Required by ENTREPRENEUR
1.02.02 Required by SUB-CONTRACTOR
1.02.03 Choice
2.00 CONSIDERATION
2.01 Base Amount
2.02 Adjustments
2.02.01 Modifications
2.02.02 Raw Materials
2.02.03 Waiver of Certain Costs
2.02.04 Penalty Clause
2.02.05 Bonus
3.00 TERMS OF PAYMENT
3.01 Instalments
3.01.01 Initial Installment
3.01.02 Progressive Invoicing
3.01.03 Retainer
3.01.04 Final Installment
3.02 Adjustment
3.02.01 Modifications
3.02.02 Raw Materials
3.02.03 Bonus
3.03 Interest
3.04 Loss of Term
4.00 SECURITY
4.01 In favour of ENTREPRENEUR
4.02 In favour of SUB-CONTRACTOR
4.03 SURETYSHIP
4.03.01 Undertaking
4.03.02 Solidarity
4.03.03 Waiver
4.03.04 Presumption
4.03.05 Scope
4.03.06 Jurisdiction
4.04 Right of Ownership
4.05 Legal Hypothec
5.00 MUTUAL REPRESENTATIONS AND WARRANTIES
5.01 Status
5.02 Authority
5.03 Binding Agreement
5.04 Canadian Resident
5.05 Commission
5.06 Permits
5.07 Insurance
5.08 Nominee
5.09 Fundamental Provisions
5.10 Disclosure
6.00 REPRESENTATIONS AND WARRANTIES OF THE ENTREPRENEUR
6.01 Manufacturing License
6.02 Performance Bond
7.00 REPRESENTATIONS AND WARRANTIES OF THE SUB-CONTRACTOR
7.01 Expertise
7.02 Work Conflicts
7.03 ISO Standards
8.00 MUTUAL DUTIES AND OBLIGATIONS
8.01 Confidential Information
8.01.01 Undertaking
8.01.02 End of Agreement
8.02 Insurance
8.02.01 Insured Risks
8.02.02 Amount of Coverage
8.02.03 Issuer
8.02.04 Co-insured
8.02.05 No Limitation
8.03 Indemnification
8.03.01 “Loss”
8.03.02 Scope
8.03.03 Procedure
8.03.04 Deductible
8.03.05 Limitation on Claims
8.04 Disclosure of Agreement
9.00 DUTIES AND OBLIGATIONS OF THE ENTREPRENEUR
9.01 Manufacturing
9.01.01 Purchase Order
9.01.02 Intellectual Property
9.01.03 Technical Support
9.01.04 Templates and Moulds
9.01.05 Specifications
9.01.06 Property of the Equipment
9.02 Schedule
9.02.01 Failure by ENTREPRENEUR
9.02.02 New Schedule
9.03 Modifications and Technological Improvements
9.03.01 Powers of ENTREPRENEUR
9.03.02 Technological Improvements
9.03.03 Good Faith
9.04 Inspection
9.04.01 Notice
9.04.02 Rejection
9.04.03 Fees
9.05 Delivery and Installation
9.05.01 Access to the Site
9.05.02 Delivery Note
9.05.03 Transfer of Risks
9.05.04 Supervision of the Site
9.05.05 Respect of the Legislation
9.05.06 Start-up
9.06 Infringement
9.06.01 Judicial Procedures
9.06.02 Indemnification
9.07 Exclusivity
9.08 Guarantees
9.10 Liability
10.00 DUTIES AND OBLIGATIONS OF THE SUB-CONTRACTOR
10.01 Best Effort
10.02 Manufacturing of the Equipment
10.02.01 Confirmation of the Purchase Order
10.02.02 Training
10.02.03 Supervision
10.02.04 Compliance with laws and standards
10.02.05 Compliance
10.02.06 Raw Materials
10.02.07 Templates and Moulds
10.02.08 Trade-marks
10.02.09 Taxes
10.02.10 Notice of Completion of the Manufacturing Process
10.03 Schedule
10.03.01 Start of Manufacturing Process
10.03.02 Manufacturing Deadline
10.03.03 New Schedule
10.03.04 Labour Dispute
10.04 Modifications
10.04.01 Approval by ENTREPRENEUR
10.04.02 Technological Improvements
10.04.03 Waiver of Technological Improvements
10.04.04 Modification Notice
10.04.05 Good Faith
10.05 Inspection
10.05.01 Full Access
10.05.02 Trials
10.05.03 Manufacturing Defect
10.05.04 Correction Notice
10.06 Delivery and Installation
10.06.01 Transportation
10.06.02 Assembly and Installation
10.07 Warranties
10.07.01 Duration
10.07.02 Customer Service
10.08 Exclusivity
10.09 Cooperation
10.10 Confidential Information
10.11 Infringement
10.11.01 Judicial Procedures
10.11.02 Settlement
10.12 Dispute
10.13 Non-competition
10.13.01 Scope
10.13.02 Adjustments
10.13.03 Penalty
10.13.04 Additional Remedy
10.14 Non-solicitation of Staff
10.15 Non-solicitation of Clientele
10.16 Liability
10.17 Intellectual Property
10.17.01 Transfer
10.17.02 Exception
11.00 SPECIAL PROVISIONS
11.01 Assignment
11.01.01 Prohibition
11.01.02 Effect of Breach
11.01.03 Exception
11.02 Force Majeure
11.02.01 No Default
11.02.02 Duty
11.02.03 Rights of Other PARTY
11.03 Relationship
11.03.01 Independent Contractors
11.03.02 No Control over Performance
11.03.03 No Authority to Bind
11.04 Further Assurances
11.05 Other Remedies
11.05.01 Choices
11.05.02 No Limitations
11.06 Prescription
11.07 Intellectual Property
12.00 GENERAL PROVISIONS
12.01 Notice
12.02 Dispute Resolution
12.02.01 Good Faith Negotiations
12.02.02 Mediation
12.02.03 Arbitration
12.03 Election
12.04 Counterparts
12.05 Amendment
12.06 Waiver of Rights
12.07 Electronic Transmission
12.08 Language
13.00 TERMINATION
13.01 Mutual Consent
13.02 Unilateral Termination
13.03 Without Notice
13.04 Prior Notice
13.05 Change in Control
14.00 EFFECTIVE DATE
14.01 Retroactivity
14.02 Execution
14.03 Deferral
15.00 DURATION
15.01 Indeterminate Duration
15.02 Survival
16.00 SCOPE

SCHEDULE A - EXCERPT OF A RESOLUTION OF THE ENTREPRENEUR
SCHEDULE B - EXCERPT OF A RESOLUTION OF THE SUB-CONTRACTOR
SCHEDULE 0.01.28– PURCHASE ORDER
SCHEDULE 0.01.33 - SPECIFICATIONS
SCHEDULE 4.03 – SURETYSHIP