Subcontractor Agreement for United Arab Emirates

Subcontractor Agreement Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that establishes the terms and conditions under which a subcontractor will perform specified works or services for a main contractor. The document incorporates UAE labor law requirements, local business practices, and regulatory compliance measures while defining the scope of work, payment terms, performance standards, and dispute resolution mechanisms. It ensures alignment with UAE Civil Code and Commercial Code requirements, includes necessary provisions for worker protection, and addresses specific UAE business requirements such as licensing and local content requirements.

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What is a Subcontractor Agreement?

The Subcontractor Agreement is a crucial document used when a main contractor wishes to delegate specific portions of their contractual obligations to another party in the UAE. This agreement type is particularly important in the UAE's dynamic business environment, where complex projects often require specialized expertise and resources. The document must comply with UAE Federal Laws, including Labor Law No. 8 of 1980, Civil Code, and Commercial Transactions Law, while addressing specific emirate-level regulations where applicable. It typically includes detailed provisions for scope of work, payment terms, performance standards, worker protection, insurance requirements, and dispute resolution mechanisms. The agreement is essential for risk management and establishing clear accountability in project delivery, while ensuring compliance with local content requirements and business practices.

What sections should be included in a Subcontractor Agreement?

1. Parties: Identification of the main contractor and subcontractor, including their full legal names, addresses, and registration details as per UAE requirements

2. Background: Context of the agreement, reference to the main contract, and project overview

3. Definitions: Definitions of key terms used throughout the agreement, including project-specific terminology

4. Scope of Work: Detailed description of the subcontractor's obligations, deliverables, and work specifications

5. Duration and Timelines: Project schedule, milestones, completion dates, and any time-sensitive requirements

6. Payment Terms: Compensation details, payment schedule, invoicing requirements, and VAT considerations

7. Performance Standards: Quality requirements, applicable standards, and acceptance criteria

8. Subcontractor Obligations: Specific duties, responsibilities, and compliance requirements including labor law obligations

9. Main Contractor Obligations: Main contractor's responsibilities, including provision of access, materials, or information

10. Health and Safety: Safety requirements, procedures, and compliance with UAE health and safety regulations

11. Insurance and Liability: Required insurance coverage, indemnification provisions, and liability limitations

12. Confidentiality: Protection of confidential information and trade secrets

13. Termination: Grounds for termination, notice requirements, and consequences of termination

14. Dispute Resolution: Process for resolving disputes, including UAE court jurisdiction or arbitration provisions

15. Governing Law: Specification of UAE law as governing law and relevant jurisdiction

What sections are optional to include in a Subcontractor Agreement?

1. Performance Bond: Requirements for performance bonds or bank guarantees, optional based on project value and risk

2. Intellectual Property: IP rights and ownership provisions, needed when work involves creative or technical innovations

3. Force Majeure: Provisions for unforeseen circumstances, particularly relevant in long-term or high-risk projects

4. Environmental Compliance: Environmental protection requirements, necessary for construction or industrial projects

5. Local Content Requirements: Provisions regarding use of local resources and compliance with Emiratisation policies

6. Warranty: Extended warranty provisions beyond standard defect liability period

7. Step-in Rights: Main contractor's right to take over subcontractor's scope, relevant for critical project components

8. Anti-corruption: Specific anti-corruption and compliance provisions, particularly important for international parties

What schedules should be included in a Subcontractor Agreement?

1. Schedule 1 - Scope of Works: Detailed technical specifications and requirements of the subcontracted works

2. Schedule 2 - Bill of Quantities: Itemized list of works with quantities and rates

3. Schedule 3 - Payment Schedule: Detailed payment terms, milestones, and payment breakdown

4. Schedule 4 - Project Timeline: Detailed project schedule with milestones and completion dates

5. Schedule 5 - Key Personnel: List of key personnel and their qualifications

6. Schedule 6 - Required Insurances: Detailed insurance requirements and coverage levels

7. Schedule 7 - Forms and Procedures: Standard forms for notices, requests, and other project communications

8. Schedule 8 - HSE Requirements: Detailed health, safety, and environmental requirements

9. Appendix A - Main Contract Excerpts: Relevant portions of the main contract that apply to the subcontractor

10. Appendix B - Technical Drawings: Relevant technical drawings and specifications

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Construction

Engineering

Oil & Gas

Infrastructure

Real Estate Development

Technology

Manufacturing

Facilities Management

Energy

Telecommunications

Relevant Teams

Legal

Commercial

Procurement

Operations

Risk Management

Compliance

Project Management

Technical

Finance

Health Safety Environment

Quality Assurance

Relevant Roles

Contract Manager

Project Manager

Legal Counsel

Commercial Director

Procurement Manager

Operations Manager

Risk Manager

Technical Director

Construction Manager

Chief Operating Officer

Compliance Officer

Business Development Manager

Site Supervisor

Quality Assurance Manager

HSE Manager

Industries
UAE Federal Law No. 8 of 1980 (UAE Labor Law): Governs employment relationships, working conditions, and worker rights. Essential for defining subcontractor employment terms and ensuring compliance with local labor regulations.
UAE Civil Code (Federal Law No. 5 of 1985): Provides the fundamental principles of contract law, including formation, validity, and enforcement of contracts. Essential for structuring the basic contractual relationship.
UAE Commercial Transactions Law (Federal Law No. 18 of 1993): Regulates commercial transactions and business relationships, particularly relevant for payment terms and commercial obligations between parties.
UAE Federal Law No. 2 of 2015 (Commercial Companies Law): Governs company formations and operations, important for verifying subcontractor's legal status and compliance with local ownership requirements.
UAE Federal Law No. 7 of 1976 (Pension and Social Security Law): Establishes requirements for social security and pension contributions, relevant for ensuring proper coverage of workers under the subcontract.
Dubai Local Order 3 of 1999 (for Dubai-based contracts): Regulates construction activities and technical specifications in Dubai, crucial for construction-related subcontracts in Dubai emirate.
UAE Federal Law No. 6 of 2014 (Immigration Law): Governs visa and work permit requirements, essential for ensuring subcontractor compliance with employment of non-UAE nationals.
UAE VAT Law (Federal Decree-Law No. 8 of 2017): Establishes VAT obligations and requirements, important for financial aspects of the subcontract and proper tax compliance.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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