Why main contractors and subbies both need this
Subcontracting on a handshake is the most common — and most expensive — habit in small construction. For the main contractor, an undocumented subbie means unclear scope, no defect liability, no insurance confirmation, and full exposure if the subbie's worker is injured. For the subcontractor, it means payment terms that shift, scope that grows, and retention that never quite gets released. One signed agreement fixes both directions.
The BuildCape subcontract agreement covers scope and programme, payment terms and retention, variations procedure, insurance and COIDA good standing, quality and defects liability, termination, and safety obligations — including the hook for the Section 37(2) Health & Safety Agreement (also in the library) that transfers OHS duties properly between employers.
The clauses that prevent the classic fights
- Payment: tie subbie payment to certified work, state the days, and record retention percentage and release triggers.
- Variations: written instructions only — the library's Confirmation of Verbal Instruction exists for the site reality.
- Insurance & COIDA: require the subbie's COIDA Letter of Good Standing and public liability before site access.
- Defects: a stated defects liability period with retention held against it.
Fill in the Subcontract Agreement now — free
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Open the forms library →Common questions
Is a 'pay-when-paid' clause enforceable?
Conditional payment clauses appear in many subcontracts but are legally contentious and heavily fact-dependent. If cash flow depends on upstream payment, state the terms explicitly and get advice for large contracts — and as the subbie, price the risk if you accept such a clause.
What is a Section 37(2) agreement and do we need one?
It's a written agreement under the OHS Act where the mandatary (subcontractor) undertakes to comply with the Act, clarifying safety responsibility between employers. Principal contractors routinely require it; the library includes the template, and this subcontract references it.
Does the main contractor need the subbie's workers on their payroll?
No — a genuine subcontractor employs its own workers, carries its own COIDA registration and manages its own crew. But verify it: if the 'subbie' is really a labour-only arrangement under your control, labour law may see those workers as yours, with everything that follows.
Related free forms
Forms in the BuildCape library are professional templates for South African construction businesses. They are not a substitute for legal advice — for high-stakes contracts, have your attorney review the final document. Running a growing team? The BuildCape Platform automates the registers, claims and payroll these forms feed into.