As a business owner, agreements with subcontractors are vital for clarity, legal protection, quality assurance, risk mitigation, and relationship management. Clear and comprehensive agreements establish expectations, reduce ambiguity, and outline rights and responsibilities, serving as legal safeguards in case of disputes. By incorporating quality control measures and risk mitigation strategies, business owners can ensure standards are met and liabilities are minimized. Effective communication facilitated by these agreements fosters productive relationships with subcontractors, contributing to the long-term success and sustainability of the business. North Carolina Law 22C-2 entitled Performance by subcontractor states: “Performance by a subcontractor in accordance with the provisions of its contract shall entitle it to payment from the party with whom it contracts. Payment by the owner to a contractor is not a condition precedent for payment to a subcontractor and payment by a contractor to a subcontractor is not a condition precedent for payment to any other subcontractor, and an agreement to the contrary is unenforceable.” If your agreement doesn’t define what “Performance” looks like, you could be on the hook for work that wasn’t fully completed.