Subcontractor Agreement Template for Malaysia

A Subcontractor Agreement spells out the terms when one company hires another to handle part of a larger project. In Malaysia, these contracts are especially common in construction, IT, and manufacturing sectors, where specialized work often needs to be delegated to other firms.

The agreement protects both parties by clearly defining scope, payment terms, timelines, and quality standards. It must comply with Malaysian Contract Act 1950 requirements and typically includes key provisions for insurance coverage, confidentiality, and dispute resolution methods recognized under local law. Many Malaysian businesses use these agreements to maintain control over project quality while sharing workload efficiently.

Use a Subcontractor Agreement when your business needs specialized work done but lacks the internal expertise or capacity to handle it. This is particularly important in Malaysian construction projects, IT implementations, or manufacturing operations where you're delegating specific tasks to other companies while maintaining overall project responsibility.

The timing is crucial - put this agreement in place before any work begins, especially for projects valued over RM500,000 or those involving multiple parties. Malaysian law requires clear documentation of work arrangements, and having this agreement ready helps avoid disputes about scope, payment terms, and liability. It's essential when coordinating with foreign subcontractors or managing complex supply chains.

• Contractor Subcontractor Agreement: Standard master agreement for general business relationships, covering basic terms and conditions
• Subcontract Agreement For Construction Work: Specialized for building projects, includes site safety and material specifications
• Nominated Subcontractor Agreement: Used when clients specifically select the subcontractor, common in government projects
• Subcontractor Employment Contract: Focuses on individual contractors rather than companies, addressing personal service terms
• Non Disclosure Agreement For Subcontractor: Specifically protects confidential information when sharing sensitive project details

• Main Contractors: Usually large construction or project management companies who need specialized work done, responsible for overall project delivery and managing subcontractor relationships
• Subcontractors: Specialized firms or skilled professionals who perform specific tasks like electrical work, plumbing, or IT services under the main contract
• Project Owners: Government agencies, property developers, or businesses who approve subcontractor arrangements and sometimes nominate specific subcontractors
• Legal Teams: Corporate lawyers or legal consultants who draft and review agreements to ensure compliance with Malaysian law
• Contract Administrators: Staff who manage day-to-day contract implementation, monitor performance, and handle documentation

• Project Details: Gather precise scope of work, timelines, deliverables, and quality standards expected from the subcontractor
• Company Information: Collect registration numbers, business addresses, and authorized representatives from both parties
• Payment Terms: Define payment amounts, schedules, and conditions for milestone completions or progress payments
• Insurance Requirements: Document necessary coverage types and minimum amounts as per Malaysian regulations
• Compliance Check: Verify subcontractor's licenses, permits, and CIDB registration for construction work
• Safety Standards: List specific safety protocols and responsibilities, especially for high-risk work
• Document Generation: Use our platform to create a legally-sound agreement that includes all mandatory elements

• Party Details: Full legal names, registration numbers, and authorized signatories of both contractor and subcontractor
• Scope of Work: Detailed description of services, deliverables, and quality standards
• Payment Terms: Clear payment amounts, schedules, and conditions under Malaysian financial regulations
• Project Timeline: Start date, completion date, and key milestones with specific deadlines
• Liability Clauses: Insurance requirements, indemnification terms, and risk allocation
• Termination Rights: Conditions for contract ending, notice periods, and consequences
• Dispute Resolution: Malaysian jurisdiction choice, arbitration procedures, and governing law
• Confidentiality: Data protection obligations and trade secret safeguards

A Subcontractor Agreement differs significantly from an Agency Agreement, though both involve one party performing work for another. Let's explore the key differences that matter under Malaysian law.

• Legal Relationship: Subcontractors work independently on specific project tasks, while agents represent and act on behalf of the principal in dealings with third parties
• Scope of Authority: Agents can make binding decisions for their principal, while subcontractors must strictly follow predetermined project specifications
• Payment Structure: Subcontractors typically receive project-based payments or milestone fees, while agents often earn commissions or ongoing fees
• Liability Framework: Subcontractors bear direct responsibility for their work quality, while agents' actions legally bind their principal
• Duration: Subcontractor agreements usually end with project completion, while agency agreements often establish ongoing relationships