US Construction Subcontract (Jurisdiction-Specific)

Example Conversation

Below is an example of how a typical subcontract drafting session unfolds. The agent collects project parameters, selects jurisdiction-specific provisions, and generates the agreement with a compliance check.

You: We need a subcontract for Martinez Electrical — they’re doing the electrical rough-in and finish on a new public elementary school in Orlando, Florida. Contract value is about $1.8M. This is a state-funded project.

Agent: I’ll draft a Florida-specific subcontract for Martinez Electrical. Let me confirm a few details:

1. Is this a state/county-funded project subject to Florida’s Little Miller Act bond requirements?
2. Does the project require prevailing wages under Florida’s state prevailing wage law, or is there any federal funding that would trigger Davis-Bacon?
3. What prime contract form are you using — AIA A201/A401, ConsensusDocs 750, or a custom form?
4. What retainage percentage is in the prime contract?

You: County school board project, no federal funding, so no Davis-Bacon. We’re using AIA A201/A401. Prime contract has 10% retainage reducing to 5% at 50% completion.

Agent: Got it. Here’s what I’m building into the Florida subcontract:

Jurisdiction-specific provisions:

• Mechanics Lien: Martinez must serve a Notice to Owner (NTO) within 45 days of first furnishing labor or materials (Fla. Stat. § 713.06). Per the 2023 HB 7125 amendment, a late NTO doesn’t forfeit lien rights entirely — it limits protection to work from the date of service forward. I’ll include a reminder to serve NTO by day 40.
• Payment Bond: Florida Little Miller Act requires a payment bond on public projects. Martinez can file a bond claim if unpaid — I’ll include the bond claim preservation language.
• Prompt Payment: You must pay Martinez within 25 business days after receiving payment from the school board (Fla. Stat. § 218.735). Late payment penalty is 2% per month.
• Retainage: 10% reducing to 5% after 50% completion, consistent with Fla. Stat. § 255.078(6) for public works.
• Indemnification: Florida is a Type II anti-indemnity state (Fla. Stat. § 725.06) — I’ll use intermediate-form indemnity. Broad-form is void.
• Pay-if-Paid: Enforceable in Florida if clear and express (DEC Elec. v. Rafael Const.). I’ll draft it as a condition precedent with unambiguous language.
• Insurance: Electrical is Tier 2 (medium risk) — $1M/$2M CGL, statutory workers’ comp, $1M auto, $5M umbrella. Additional insured endorsements ISO CG 20 10 and CG 20 37.
• Contractor licensing: Martinez must hold a valid Florida electrical contractor license (Fla. Stat. Ch. 489) — unlicensed subs cannot enforce lien rights.
• E-Verify: Required for Florida public contracts (Fla. Stat. § 448.095).

I’ll also include the AIA A201/A401 prime contract flow-down exhibit. Let me generate the full subcontract now.

You: Looks good. Go ahead.

Agent: I’ve generated the complete subcontract. Running the jurisdiction compliance check…

Compliance check results:

• Indemnity clause: intermediate form — compliant with § 725.06
• Pay-if-paid: condition precedent language is clear and express — enforceable
• NTO reminder: included with 40-day deadline
• Retainage: 10%/5% — compliant with § 255.078(6)
• E-Verify: compliance clause included
• Contractor license: verification requirement included

No issues found. The subcontract is saved to output/FL-subcontract-agreement.md with a cover memo listing the 7 exhibits to attach. I recommend having your construction attorney review the indemnity clause and the pay-if-paid provision before execution — both are enforceable but fact-sensitive.

Sample Output Excerpt

Below is a representative excerpt from a generated subcontract, showing the Payment Terms, Indemnification, and Mechanics Lien articles — the three most jurisdiction-sensitive sections.

Article 5 — Payment Terms

5.1 Progress Payments. Contractor shall pay Subcontractor for Work performed during each billing period within twenty-five (25) business days after Contractor receives payment from Owner for the Work covered by Subcontractor’s approved payment application, in accordance with the Florida Prompt Payment Act, Fla. Stat. § 218.735.

5.2 Retainage. Contractor shall withhold retainage of ten percent (10%) of each progress payment until the Work is fifty percent (50%) complete, at which point retainage shall be reduced to five percent (5%) of each subsequent progress payment, in accordance with Fla. Stat. § 255.078(6). Retainage shall be released within thirty (30) days of final acceptance of Subcontractor’s Work by Owner, provided Subcontractor has submitted all required close-out documentation, lien waivers, and warranty materials.

5.3 Condition Precedent (Pay-If-Paid). Contractor’s receipt of payment from Owner for Subcontractor’s Work is an express condition precedent to Contractor’s obligation to pay Subcontractor. Subcontractor acknowledges and agrees that this provision creates a condition precedent to payment, not merely a timing mechanism, and that Contractor shall have no obligation to pay Subcontractor until and unless Contractor has received corresponding payment from Owner. This provision shall not apply if Contractor’s failure to receive payment from Owner is caused by Contractor’s own default, material breach, or failure to include Subcontractor’s Work in Contractor’s payment application to Owner.

5.4 Late Payment Interest. Interest on undisputed amounts not paid within the time periods specified herein shall accrue at the rate of two percent (2%) per month, as provided by Fla. Stat. § 218.735(9).

Article 8 — Indemnification

8.1 To the fullest extent permitted by law, Subcontractor shall indemnify, defend, and hold harmless Contractor, Owner, and their respective officers, directors, employees, and agents from and against all claims, damages, losses, and expenses (including reasonable attorneys’ fees) arising out of or resulting from the performance of the Work, to the extent caused by the negligent acts, errors, or omissions of Subcontractor, its employees, agents, or lower-tier subcontractors. This indemnification obligation shall not extend to claims, damages, losses, or expenses arising from the sole negligence of Contractor or Owner, in accordance with Fla. Stat. § 725.06.

8.2 The indemnification obligations of this Article shall not be construed to negate, abridge, or otherwise reduce any other rights or obligations of indemnity that would otherwise exist as to any party or person described herein. This Article shall survive completion or termination of this Subcontract.

Article 9 — Mechanics Lien and Bond Rights

9.1 Preservation of Lien Rights. Nothing in this Subcontract shall be construed to waive or impair Subcontractor’s statutory mechanics lien rights under Florida law. Subcontractor is solely responsible for timely serving any Notice to Owner (NTO) required under Fla. Stat. § 713.06(2)(c) within forty-five (45) days of first furnishing labor, services, or materials to the Project. Subcontractor is advised that under the 2023 amendment (HB 7125, effective October 1, 2023), an NTO served after the 45-day period does not extinguish lien rights but limits protection to labor, services, or materials furnished from the date of NTO service forward.

9.2 Payment Bond Claims. This Project is a Florida public works project requiring a payment bond under Fla. Stat. § 255.05. Subcontractor’s right to claim against the payment bond is preserved. Subcontractor shall provide Contractor with copies of any bond claim notices simultaneously with service on the surety.

9.3 Lien Waivers. Subcontractor shall provide conditional lien waivers with each progress payment application and an unconditional final lien waiver upon receipt of final payment. Lien waiver forms shall comply with Fla. Stat. § 713.20.

Key Jurisdictions Covered

The skill includes a detailed jurisdiction matrix with state-specific profiles for:

The matrix also covers anti-indemnity statute types (I, II, III, and state-specific variants), pay-if-paid enforceability by state, Miller Act and Little Miller Act thresholds, and Davis-Bacon / DBRA prevailing wage flow-down requirements for federal and federally assisted projects.