SUBCONTRACT AGREEMENT
This subcontract agreement (hereinafter the "Agreement") has been entered into in [Place of signing] on [Date of signing] between the following parties:
1. PARTIES
1.1 [Name of the main contractor]
Registry code: [Registry code of the main contractor]
(hereinafter the "Main Contractor")
1.2 [Name of the subcontractor]
Registry code: [Registry code of the subcontractor]
Registration in the register of economic activities (MTR): [Subcontractor's registration number in the register of economic activities (MTR)]
(hereinafter the "Subcontractor")
2. SITE AND MAIN CONTRACT
2.1 The works are performed at the site located at [Address of the site].
2.2 The Subcontractor's works form part of the performance of the contract for work entered into between the Main Contractor and its client (hereinafter the "Client") (hereinafter the "Main Contract"). Main contract: [Reference to the main contract].
2.3 The Subcontractor's works must comply with the requirements arising from the Main Contract. Before the start of the works, the Main Contractor communicates to the Subcontractor those terms of the Main Contract (including quality, schedule, safety and documentation requirements) that concern the Subcontractor's works, and the Subcontractor complies with them to the extent they have been communicated to it.
2.4 The Client is not a party to this Agreement. The Subcontractor communicates with the Client on matters concerning the works through the Main Contractor or with its consent.
3. SCOPE OF AND REQUIREMENTS FOR THE WORKS
3.1 The Subcontractor performs the following works:
[Scope of the subcontracted works]
3.2 Without a separate agreement, the Subcontractor also performs such works and operations that are not expressly provided for in the Agreement but that are ordinarily necessary for the proper performance of the Agreement and inherently form part of the works.
3.3 The works must comply with the Agreement, legislation and good construction practice. The Subcontractor holds the registration in the register of economic activities required for performing the works, if required by law.
4. SCHEDULE
4.1 The works begin on [Start of the works] and are completed no later than [Completion deadline of the works].
4.2 The Subcontractor follows the site schedule drawn up by the Main Contractor and notifies the Main Contractor without delay of any foreseeable delay. The deadline is extended by a reasonable time if the delay is caused by the Main Contractor, the Client or force majeure.
5. PRICE AND PAYMENT
5.1 Pricing structure: [Pricing structure].
5.2 The price is [Price or hourly rate (€)] euros and it includes all costs of the Subcontractor for performing the works specified in clause 3.
5.3 Payment terms: [Payment terms].
5.4 The due date of payment to the Subcontractor does not depend on whether the Client has paid the Main Contractor, unless the Parties have agreed otherwise in writing.
5.5 Additional works are paid for only if their performance, price and deadline have been agreed with the Main Contractor in writing or in a form reproducible in writing before the start of the works.
5.6 The Main Contractor is entitled to retain [Warranty retention (%)]% of the amount of each payment as security for the warranty period. The retained amount is released at the end of the warranty period if there are no defects or they have been remedied. If the Subcontractor fails to remedy a defect that has become apparent during the warranty period, the Main Contractor may use the retained amount to cover the reasonable costs of remedying the defect.
6. MATERIALS
6.1 The materials necessary for the works are provided by the Main Contractor. The Subcontractor inspects the materials and notifies the Main Contractor without delay if it has doubts about their suitability.
6.2 Materials and construction products must comply with the applicable requirements and the relevant terms of the Main Contract.
7. OCCUPATIONAL SAFETY AND SITE RULES
7.1 The Subcontractor complies with occupational safety, fire safety and environmental requirements and the site rules established by the Main Contractor, keeps its work area in order and removes the waste generated by its activities.
7.2 The Subcontractor hands over to the Main Contractor the data and documents necessary for documenting the works (e.g. reports on covered works, test results and as-built drawings), if these are required by the nature of the works or under the Main Contract.
8. DELIVERY AND ACCEPTANCE
8.1 Completed works are delivered with a delivery and acceptance report.
8.2 The Main Contractor is entitled to refuse acceptance if the works do not comply with what has been agreed; the defects and the deadline for remedying them are recorded in the report.
8.3 The Subcontractor notifies the Main Contractor of the completion of the works. The Main Contractor inspects the works without delay (Law of Obligations Act (VÕS) § 643) and notifies the Subcontractor of defects, describing them with sufficient precision (VÕS § 644). The work is also deemed accepted if the Main Contractor unjustifiably fails to accept the completed work within a reasonable term given to it by the Subcontractor (VÕS § 638).
8.4 The Subcontractor bears the risk of accidental destruction of and damage to the works until the works are accepted or deemed accepted (VÕS § 640 (2)).
9. WARRANTY
9.1 The Subcontractor gives a warranty for the works performed for [Warranty period (months)] months as of acceptance.
9.2 The Subcontractor remedies defects that become apparent during the warranty period at its own expense within a reasonable time.
9.3 The warranty for the work covers all non-conformities of the work with the terms of the contract that become apparent during the warranty period (VÕS § 650 (1)), but does not extend to defects arising from improper use or normal wear and tear.
9.4 If the Subcontractor does not remedy a defect within a reasonable time, the Main Contractor may remedy it or have it remedied and demand compensation for reasonable expenses (VÕS § 646 (5)).
10. INSURANCE
10.1 The Subcontractor undertakes to hold valid liability insurance and to submit a copy of the policy to the Main Contractor on request. The insurance does not limit the Subcontractor's liability.
11. LIABILITY
11.1 The Main Contractor is liable to the client also for the works performed by the Subcontractor.
11.2 The Subcontractor is liable to the Main Contractor for the quality of its works, compliance with deadlines and compliance with safety requirements.
11.3 The Subcontractor may not engage its own subcontractors without the prior written consent of the Main Contractor. If consent is given, the Subcontractor is liable for the activities of its subcontractors as for its own activities.
11.4 The Subcontractor compensates the Main Contractor for damage incurred by the Main Contractor as a result of claims of the Client or a third party arising from defects in or delay of the Subcontractor's works or any other breach of the Subcontractor's obligations, unless the breach is excusable (VÕS § 103).
11.5 If the deadline is exceeded, the Main Contractor is entitled to demand a contractual penalty of [Contractual penalty for delay (€ per day)] euros for each day of delay. A contractual penalty may not be demanded if the delay is excusable (VÕS § 160) or is caused by the Main Contractor. Demanding a contractual penalty does not preclude a claim for performance of the obligation, and damage must be compensated to the extent not covered by the contractual penalty (VÕS § 159 (1), § 161 (2)).
12. CONFIDENTIALITY AND THE CLIENT
12.1 The Subcontractor keeps confidential the terms of the Main Contract, the prices and the non-public information of the Main Contractor and the Client that has become known to it in performing the Agreement. The obligation also remains in force after the termination of the Agreement.
12.2 During the term of the Agreement, the Subcontractor does not offer the same works at the same site directly to the Client without the consent of the Main Contractor.
13. TERMINATION OF THE AGREEMENT
13.1 The Main Contractor may cancel the Agreement at any time. In that case, the Subcontractor is entitled to demand the agreed remuneration, less whatever it saved as a result of the cancellation of the Agreement or acquired or could reasonably have acquired by using its labour otherwise; this does not apply if the Main Contractor cancelled the Agreement due to a breach of contract by the Subcontractor (VÕS § 655).
13.2 Either Party may withdraw from or cancel the Agreement if the other Party materially breaches the Agreement. Upon the termination of the Main Contract, the Main Contractor notifies the Subcontractor thereof without delay.
13.3 Upon the termination of the Agreement, the Parties record the volume of works performed in a report.
14. DISPUTE RESOLUTION
14.1 The Parties endeavour to resolve disputes arising from the Agreement through negotiations. Failing agreement, the dispute is resolved in court.
15. FINAL PROVISIONS
15.1 Amendments and supplements to the Agreement are made in writing or in a form reproducible in writing and enter into force once both Parties have confirmed them.
15.2 A Party may not transfer its rights and obligations arising from the Agreement to a third party without the prior written consent of the other Party.
15.3 If any provision of the Agreement is or becomes invalid, this does not affect the validity of the remaining provisions.
16. LEGAL BASIS
16.1 The Agreement is governed by the law of the Republic of Estonia, in particular the provisions of the Law of Obligations Act governing contracts for services (VÕS § 635 et seq.).