Subcontractors

Subcontractors

A client may agree to allow a service provider to use a subcontractor to perform some or all of the contracted services, provided that the service provider remains directly responsible and liable for the subcontractor’s acts and omissions:

Exemplar C68-1

Either party may engage subcontractors to perform part of its obligations under this Agreement; provided, however, that each party shall remain fully responsible and liable for the performance of its subcontractor. Each party shall ensure that the agreement with its subcontractors shall include terms and conditions necessary to ensure any subcontractor’s compliance with the duties and obligations herein of the party retaining said subcontractor, including but not limited to any waiver(s) of moral rights as applicable.

Exemplar C68-2

Either party may engage subcontractors to perform part of its obligations under this Agreement; provided, however, that each party shall remain fully responsible and liable for the performance of its subcontractor. Each party shall ensure that the agreement with its subcontractors shall include terms and conditions necessary to ensure any subcontractor’s compliance with the duties and obligations herein of the party retaining said subcontractor, including but not limited to including but not limited to the safeguarding and use of confidential information and any waiver(s) of moral rights as applicable.

The following exemplar contains a process for engaging subcontractors and a disclaimer of any relationship between the client and the subcontractor, and imposes on the service provider an obligation to classify workers properly as independent contractors (as opposed to employees):

Exemplar C68-3

Prior to performing the services, Supplier will furnish to Buyer in writing the names and addresses of its proposed Subcontractor, supplier or other third party (“Subcontractor”), of whatever tier, if any, who will perform any portion of the services described in the Order on Buyer’s property, or otherwise as requested by Buyer. Supplier will not engage or contract with any Subcontractor, of whatever tier, to the extent that Buyer has made an objection. Consent by Buyer, if given, will not relieve Supplier from any liability or obligation under this Agreement, and Supplier will be responsible for the acts and omissions of each Subcontractor as fully as if they were the acts, defaults or neglects of Supplier. The omission of a reference to a Subcontractor in connection with any of Supplier’s responsibilities or obligations in this Agreement will not be construed to diminish, abrogate or limit any responsibilities or obligations of Supplier. Nothing in this Agreement will create or be deemed to create any obligation on the part of Buyer to any Subcontractor, and nothing in this Agreement will create or be deemed to create any contractual relationship or any third-party beneficiary relationship between Buyer and any Subcontractor or any other party other than Buyer and Supplier. Supplier agrees, represents, and warrants that it has undertaken an evaluation and determination of the independent contractor status of all Subcontractors in compliance with all applicable state and federal legal requirements (including, but not limited to California law where applicable). Supplier understands and agrees that its defense and indemnity obligations of Buyer as required by the Indemnification Section of this Agreement apply, without limitation, to any demand, claim, charge, proceeding, litigation and/or penalties arising from or related to Supplier’s failure to properly classify an independently contracted Subcontractor.

In the following exemplar, the parties specify the contractual obligations owed by the subcontractor to the service provider (for the benefit of the client) and provide for right of the client to request removal of the subcontractor:

Exemplar C68-4

Contractor has entered into, or will enter into, a contract with each Subcontractor it utilizes in the performance of this Agreement (the “Subcontract Contract”). The Subcontractor Contract shall require the Subcontractor to: a) comply with all applicable federal, state, and local laws; b) defend, indemnify, and hold Contractor and Customer harmless from all damages, claims, or losses arising out of Subcontractor’s negligent performance under this Agreement, including damage to property (excluding cargo loss or damage) and personal injury or death; c) be liable for cargo loss or damage as provided for in 49 USC 14706, but such liability shall be limited to a maximum of $500,000 per shipment; d) have a “Satisfactory” or “Unrated” safety rating; and (e) maintain and provide the following forms of insurance: i) Automobile Liability with a minimum limit of One Million Dollars ($1,000,000) per occurrence; ii) Cargo Liability with a minimum limit of Five Hundred Thousand Dollars ($500,000); and iii) Workers’ Compensation insurance with limits not less than the statutory minimums. Customer will have the right to require the removal or reassignment of any Subcontractor performing the Services if in its reasonable judgment Customer is dissatisfied with the Subcontractor’s performance, competence, responsiveness, capabilities, cooperativeness, or fitness for a particular task. If Customer requests the replacement of a Subcontractor, Contractor shall remove such Subcontractor immediately and a temporary replacement subcontractor must be in place within one (1) week. Contractor shall be and remain liable for all acts and omissions of the replacement Subcontractor.