Illinois Subcontractor Agreement Template | Statutory Compliant
Generate a construction subcontract tailored to Illinois law — with statutory prompt payment deadlines, retainage caps, lien waiver rules, and anti-indemnification protections built in.
Contract Parties
Subcontractor
Project & Schedule
Payment Terms
Total subcontract price for your scope of work.
Illinois rules: Illinois does not cap retainage by statute on private construction; retainage is negotiable.
Days after GC receives owner payment.
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Download a clean, print-ready PDF with all Illinois statutory clauses included — prompt payment, retainage, lien waiver, and indemnification.
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Subcontractor Agreement
Construction Subcontract — State of Illinois
This Subcontractor Agreement (the “Agreement”) is made and entered into as of October 5, 2026 by and between [General Contractor Name] (“General Contractor”) and [Subcontractor Name] (“Subcontractor”), governed by 770 ILCS 60/0.01 et seq. and the laws of the State of Illinois.
General Contractor
[General Contractor Name]
Subcontractor
[Subcontractor Name]
Project Owner
—
Project Address
—
Contract Price
[Contract Price]
License #
—
1. Scope of Work
Subcontractor shall furnish all labor, tools, equipment, and materials necessary to complete the agreed scope of work in a good and workmanlike manner, in compliance with all applicable building codes.
2. Payment
GC shall pay Subcontractor within 10 days after receiving payment from the Project Owner. On public works under 50 ILCS 50/1, the general contractor must pay subcontractors within 15 days after receiving payment from the owner. On private jobs, Illinois does not have a mandatory payment deadline statute, but pay-if-paid clauses are generally unenforceable under Dover v. Cuyler.
3. Retainage
GC may withhold 10% retainage from each progress payment. Illinois does not cap retainage by statute on private construction; retainage is negotiable. On public works under 50 ILCS 50/1, retainage cannot exceed 10% and must be reduced by 5% at 50% completion if progress is satisfactory.
4. Lien Waivers
Illinois does not require statutory lien waiver forms; waivers are enforceable if they clearly identify the project, amount, and date. Under 770 ILCS 60/21, waivers executed before payment are effective only to the extent of payment actually received.
5. Mechanics Lien Rights Preserved
Illinois requires filing a lien within 4 months (for buildings) or 2 years (for lots) after the last work or materials were furnished, followed by a lawsuit within 2 years of filing. Illinois requires second-tier subcontractors and material suppliers to send a 90-day Notice to the owner and GC within 90 days of first furnishing labor or materials (or after a 60-day GC notice, whichever is earlier) to preserve lien rights.
6. Indemnification
Illinois under 740 ILCS 35/3 (Construction Contract Indemnification Act) voids provisions requiring a subcontractor to indemnify another for the other’s sole negligence or willful misconduct in construction contracts. Broad indemnity for joint negligence is otherwise permissible.
7. Governing Law
This Agreement is governed by the laws of the State of Illinois, including 770 ILCS 60/0.01 et seq. (Illinois Mechanics Lien Act) and Prompt Pay Act at 50 ILCS 50/1 (public) and 770 ILCS 60/28 (private, implied good faith).
[General Contractor Name] — General Contractor
Print Name / Title
[Subcontractor Name] — Subcontractor
Print Name / Title
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Illinois Payment & Retainage Rules
On public works under 50 ILCS 50/1, the general contractor must pay subcontractors within 15 days after receiving payment from the owner. On private jobs, Illinois does not have a mandatory payment deadline statute, but pay-if-paid clauses are generally unenforceable under Dover v. Cuyler.
Retainage Cap
Illinois does not cap retainage by statute on private construction; retainage is negotiable. On public works under 50 ILCS 50/1, retainage cannot exceed 10% and must be reduced by 5% at 50% completion if progress is satisfactory.
Pay-When-Paid
Your agreement states that owner payment is a timing mechanism, not an absolute condition precedent — preserving your right to payment and statutory remedies under 770 ILCS 60/0.01 et seq..
Lien Waivers
Illinois does not require statutory lien waiver forms; waivers are enforceable if they clearly identify the project, amount, and date. Under 770 ILCS 60/21, waivers executed before payment are effective only to the extent of payment actually received.
Your Mechanics Lien Rights in Illinois
This agreement expressly preserves your right to record a mechanics lien and serve statutory preliminary notices — no pay-if-paid, pay-when-paid, or lien waiver clause in the document can waive your lien rights beyond payment actually received.
Illinois requires filing a lien within 4 months (for buildings) or 2 years (for lots) after the last work or materials were furnished, followed by a lawsuit within 2 years of filing.
Illinois requires second-tier subcontractors and material suppliers to send a 90-day Notice to the owner and GC within 90 days of first furnishing labor or materials (or after a 60-day GC notice, whichever is earlier) to preserve lien rights.
Deadlines matter: missing a Illinois lien or notice deadline can permanently waive your security interest in the project. Calendar both dates the day you mobilize on site.
Indemnification Limits Under Illinois Law
Illinois under 740 ILCS 35/3 (Construction Contract Indemnification Act) voids provisions requiring a subcontractor to indemnify another for the other’s sole negligence or willful misconduct in construction contracts. Broad indemnity for joint negligence is otherwise permissible.
Illinois Subcontractor Agreement FAQs
When must a general contractor pay me under Illinois prompt payment law?
On public works under 50 ILCS 50/1, the general contractor must pay subcontractors within 15 days after receiving payment from the owner. On private jobs, Illinois does not have a mandatory payment deadline statute, but pay-if-paid clauses are generally unenforceable under Dover v. Cuyler. Your subcontract should mirror these statutory deadlines so that late payments automatically trigger the statutory interest and remedies without negotiation.
How much retainage can a GC legally withhold in Illinois?
Illinois does not cap retainage by statute on private construction; retainage is negotiable. On public works under 50 ILCS 50/1, retainage cannot exceed 10% and must be reduced by 5% at 50% completion if progress is satisfactory. Your agreement should specify the exact retainage percentage, the release schedule (typically at substantial completion and final completion), and payment of statutory interest on withheld retainage.
Are pay-if-paid clauses enforceable in Illinois subcontracts?
Your state restricts pay-if-paid clauses as described above.
What lien waiver rules apply in Illinois?
Illinois does not require statutory lien waiver forms; waivers are enforceable if they clearly identify the project, amount, and date. Under 770 ILCS 60/21, waivers executed before payment are effective only to the extent of payment actually received. Never sign an unconditional waiver until payment has actually cleared your bank account, and make sure your waiver identifies the specific billing period and amounts to avoid losing lien rights on future work.
Can a Illinois subcontract require me to indemnify the GC for the GC’s own negligence?
Illinois under 740 ILCS 35/3 (Construction Contract Indemnification Act) voids provisions requiring a subcontractor to indemnify another for the other’s sole negligence or willful misconduct in construction contracts. Broad indemnity for joint negligence is otherwise permissible. Always read the indemnification clause carefully — even in states with anti-indemnity statutes, "broad form" indemnity for joint negligence is typically still enforceable.
How do I preserve my mechanics lien rights in Illinois?
Illinois requires filing a lien within 4 months (for buildings) or 2 years (for lots) after the last work or materials were furnished, followed by a lawsuit within 2 years of filing. Illinois requires second-tier subcontractors and material suppliers to send a 90-day Notice to the owner and GC within 90 days of first furnishing labor or materials (or after a 60-day GC notice, whichever is earlier) to preserve lien rights. Send statutory notices by certified mail or another trackable method, keep copies of everything, and calendar the deadlines immediately upon each project’s completion.