ask010708
On the homepage
Vikings
Out There
Artcetera
Table Talk
Ask a consultant
Print this story
E-mail this story
Save to del.icio.us
Share on Facebook
Share on Digg
Minnesota business by the numbers
See Minnesota's top earning companies, CEOs and non-profits
More from Business
Q I am new in the business field and would like information concerning subcontracting. What information do I need to create a contract with the individuals or companies with whom I'd subcontract?
MARY SOBOTA
ANOTHER SUN NURSERY
A Subcontracting or teaming with another contractor can be a growth opportunity for your business, as well as a profitable experience. However, special care must be given to the relationship. Every situation is different and there is no substitute for good legal advice, so you should first consult an attorney to prevent running into legal problems.
There are some areas in which issues may arise, such as method of compensation, quality-control measures and the specific expertise you expect the subcontractor to bring to your project.
You should also work with an attorney to determine whether to use a contractual indemnification clause.
Some courts have recognized that parties to a services contract can agree on who will bear the risk of loss. Similarly, each state imposes its own licensing laws and regulations on subcontractors to help protect the public from substandard work caused by unlicensed and incompetent contractors.
Over the past few years, several laws regarding subcontracting with the federal government have been passed and are now incorporated into the Small Business Act (Public Law 85-536, as amended). Consult a professional to determine whether you'll need a specific license before subcontracting.
Finally, you can get information from the U.S. Small Business Administration at www.sba.gov and the Minnesota Small Business Development Center at www.mnsbdc.com.
JOHN T. WENDT, J.D., M.A.
ASSISTANT PROFESSOR
ETHICS AND BUSINESS LAW
UNIVERSITY OF ST. THOMAS
OPUS COLLEGE OF BUSINESS
Recent Business stories
State auditor moving ahead with performance audit at Ohio Lottery - January 6, 2008
State auditor moving ahead with performance audit at Ohio Lottery - The state auditor has ordered a performance audit of the Ohio Lottery over the uncertainties of gambling revenue, but the lottery has balked at the idea and asked that the idea be reconsidered. More
Blog: Patent Pending
Lights out at U energy conference. Irony police notified.
Just as Lawrence Kazmerski, a top official at the National Renewable Energy Laboratory, was about to give the keynote address at the University of Minnesota's annual E3 conference at the RiverCentre in St. Paul, the lights went out, bathing the audience in darkness and a deep sense of irony.
Comment on this story | Be the first to comment | Hide reader comments