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  • Writer's pictureTanya S Osensky

The Key Clause That Prevents Subcontractor Surprises

Randy thought he had everything figured out when he hired a business brokerage firm to help him sell his business. A few weeks in, he found out that the people reviewing his confidential financial records were actually subcontractors from another firm.

Needless to say, Randy was not pleased. He felt angry because he had hired a specific company for a reason, and he expected them to be the ones doing the work.

Unfortunately, Randy’s contract didn’t have a key provision that could have prevented this headache. That provision is an assignment/subcontracting clause. This clause outlines whether the company you're working with can transfer or subcontract parts of the contract to another party. If there is no such clause, then it's presumed that the company can do so.

Had Randy’s contract included a clause prohibiting assignment and subcontracting, it would have ensured that the firm he hired was the only one doing the work. Of course, he could still consent to a subcontractor, but without his consent, the firm would be in breach of contract.

If it's important to you that the company you're contracting with is the one doing the work, make sure to include an assignment/subcontracting clause in your contract. It'll save you from the headache that Randy experienced!

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