Identification and Prevention of Legal Risks in Construction Subcontracts

Construction subcontracting is common in construction projects, but the legal relationships are complex with many risk points.

Illegal subcontracting and contract assignment are strictly prohibited. The Builder may claim liquidated damages or terminate the subcontract.

The project payment clause should clearly specify payment milestones, proportion, and conditions. Common disputes include price adjustments after changes, liability allocation for delays, and warranty deposit refund conditions. Industry standard contracts are recommended.

It is recommended that the general contractor conduct thorough qualification review of subcontractors, including their qualifications, credit status, and past performance records before signing the contract.