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What is the major difference between a subcontract, a material contract, and a purchase orders

New YorkConstruction Contract

low rise residential building

1 reply

Apr 7, 2020
A subcontract is an agreement between a contractor and a subcontractor. Generally, it's when a contractor hires another construction business to perform specific work - like a specialty trade. A material contract is a contract between one party and a material supplier. Contractors and subcontractors regularly enter into material contracts with a supplier so that they can obtain the materials they need for the job they're working on. Purchase orders are sort-of like preliminary material contracts. A purchase order is essentially just an order that's made between someone and a material supplier. Once accepted, a purchase order will generally form a contract - but they're generally a little less formal than your traditional construction contract. You can learn more about them here: Understanding the Construction Purchase Order | Construction Documents. For more relevant info, I think the resources below will be useful: - Construction Contracts Overview, FAQs & Resources - Construction Payment and Lien Law Learning Center
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