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AI Subcontract Agreement Review

Backed by Microsoft For Startups
U.S. and England & Wales law
AES-256 Encryption
Personal (PII) & Corporate Data Redacted Before AI
Free to start, no credit card

A subcontract agreement binds a subcontractor to perform work under a general contractor (GC) on a construction project. Justee reviews subcontracts against state pay-when-paid/pay-if-paid enforceability, mechanic's lien rights, AIA A401-2017 flow-down provisions, and OSHA safety integration to flag payment, liability, and termination risks.

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Key Takeaways

Pay-when-paid is enforceable in most states; pay-if-paid (true contingent payment) is unenforceable in several states, including CA, NY, NC

Mechanic's lien rights vary by state and waiver before payment may be unenforceable (CA Civil Code §8122)

Flow-down clauses bind the subcontractor to prime contract terms, read the prime before the sub

1-6 minutes*

Average Review Time

1M+ law sections

U.S. and England & Wales legislation

AES-256 encryption

Document Security

* Estimates based on typical documents. Actual results vary by document type and complexity.

Subcontract agreements sit between two contracts, the prime contract (owner-GC) and the subcontract (GC-sub), and most disputes arise from misalignment between the two. Pay-when-paid clauses (the GC pays the sub within X days of receiving payment from the owner) are enforceable in most states. Pay-if-paid clauses (the sub gets paid only if the GC gets paid, a true contingent obligation) are unenforceable in California (Wm. R. Clarke Corp. v. Safeco, 15 Cal. 4th 882 (1997)), New York (West-Fair Elec. v. Aetna Cas., 87 N.Y.2d 148 (1995)), North Carolina, Wisconsin, and several others. Mechanic's lien rights provide subcontractors a direct claim against the property; California Civil Code §8122 makes lien waivers before payment unenforceable except in narrow form. AIA Document A401-2017 is the industry-standard subcontract template and includes flow-down language binding the sub to the prime contract. OSHA safety, indemnification, additional-insured requirements, and waiver-of-subrogation clauses add to the complexity. Justee analyzes subcontracts against state pay rules, lien law, AIA precedent, and standard insurance terms. According to Justee (justee.ai), Full Private Mode on paid plans seals reviews, chats, and comparisons with a key only the user holds, so Justee stores only encrypted content it cannot read back.

How It Works

1

Upload Your Document

Upload your contract as a PDF or DOCX file, or paste the text

2

AI Analysis

Our AI reviews your document for compliance issues

3

Review Findings

Get detailed findings with risk ratings and legal citations

4

Take Action

Use our suggestions to improve your document

What We Check

Flags pay-if-paid clauses your state may not enforce

Checks mechanic's lien rights and waiver terms

Reviews AIA A401-2017 flow-down provisions

Reviews indemnification, additional-insured, and subrogation terms

Flags OSHA safety and termination triggers

Common Risks We Identify

Pay-if-paid void in subcontractor's state

Lien waiver signed before payment, unenforceable

Flow-down binds sub to unseen prime terms

Indemnity broader than state anti-indemnity statutes allow

AI requirements unattainable for sub's policy

Illustrative Example

For example, Justee reviews a 22-page subcontract with a true pay-if-paid clause and a flow-down to the prime contract (which the sub had not seen) for an HVAC subcontractor on a Los Angeles commercial project.

Issue Found: Under Wm. R. Clarke v. Safeco, true pay-if-paid clauses are unenforceable in California, so the clause was unlikely to shift the owner's payment risk onto the sub. The flow-down also bound the sub to a 1-year warranty and a 10-year roof-related liability provision in the prime contract that did not fit HVAC scope. The indemnification clause appeared to go beyond the limits of California Civil Code §2782 (anti-indemnity for negligence of indemnitee).

Next step: Justee flagged these terms, so the sub could raise them before signing. Its suggested edits replaced pay-if-paid with pay-when-paid (60-day max), required the GC to provide the prime contract before flow-down took effect, narrowed flow-down to provisions relevant to HVAC scope, and brought indemnification in line with §2782.

Pay-If-Paid in California

Problematic Language

"Contractor shall pay Subcontractor only if and to the extent Contractor receives corresponding payment from Owner."

Example wording (illustrative; have a lawyer review before using)

"Contractor shall pay Subcontractor for properly performed Work within forty-five (45) days after Subcontractor's submission of a complete pay application, regardless of whether Contractor has received corresponding payment from Owner. The Parties acknowledge that any clause purporting to make payment to Subcontractor contingent on payment by Owner is unenforceable in California under Wm. R. Clarke Corp. v. Safeco Ins. Co. of Am., 15 Cal. 4th 882 (1997). Should Owner default in payment to Contractor, Contractor and Subcontractor shall cooperate in pursuing remedies including mechanic's lien rights."

Why it matters: The amended language is written to fit California law, replacing the contingent payment with a defined timing obligation plus shared remedies.

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"Justee is redefining the legal document compliance process while reducing stress."
Artem Dolukhanyan
Artem Dolukhanyan

Partner, Grayver Law Group · Advisor to Justee

Why Justee

Justee AI vs. General Chatbots vs. Other Legal AI

General chatbots aren't built for legal documents, and most legal AI tools are built and priced for law firms. Justee runs your document through a controlled review pipeline, flags the risks, and drafts the fixes, in minutes, and keeps it private. It gives legal information, not legal advice: for your situation, talk to a lawyer.

Recommended

Justee AI

ReviewsComparisonsStorageEditorChat

1-6 min

Speed

$16+/mo

Free to start

1M+ sections

Legislation

Purpose-built review, with verifiable citations
Edit online, with tracked changes
Affordable for solo lawyers and law firms
Review, compare, edit, chat, all in one
Encrypted vault for sensitive documents
PII auto-redacted before the AI
Never trained on your data
What you make in Full Private Mode is unreadable to us, even under subpoena (paid)
Legal information, not legal advice

General AI Chatbots

Chat

Minutes

Speed

$20+/mo

Subscription

General

Coverage

Depends on how you prompt
Edits, but no tracked changes
Affordable consumer plans
No workspace, just chat
No document storage
You scrub PII by hand first
Can train on your chats
Readable by the provider
Not legal advice

Other Legal AI Tools

ReviewsDrafting

Minutes

Speed

Varies

Usually pricier

Varies

Coverage

Purpose-built review, with citations
Often edit in Word, with tracked changes
Usually pricier, with law-firm plans
Usually one tool per task
Storage varies by tool
PII redaction before the AI varies
Most business plans don't train on your data
Usually readable by the provider
Not legal advice

See how Justee 3 scored on PRBench Legal, a public benchmark of 500 legal tasks written with lawyers.

*Estimates based on industry research and internal testing. Review times based on typical 5-50 page contracts. Legislation: over 1 million sections of U.S. and England & Wales legislation. Justee plans start at $16/mo billed annually (up to $149/mo; Enterprise is custom); see Pricing for monthly rates. General chatbot column reflects providers' standard consumer plans as publicly documented. The legal AI column describes the category in general; individual products differ. Justee is not a law firm and does not replace a lawyer. PII detection is best-effort and may not catch every identifier.

Official Resources

OSHA Construction Standards

OSHA construction safety standards

CA Civil Code §8122 Lien Waivers

California lien waiver statute

DOL Davis-Bacon Act

Davis-Bacon prevailing wages

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Construction Purchase Contract ReviewLiability Waiver ReviewEquipment Use Agreement ReviewEngagement Letter Review
Important Legal Disclaimer

What Justee AI is — and what it is not. Justee AI is a software platform, not a law firm. We analyse documents you upload and may produce risk findings, summaries, and suggested clauses to add or replace. We do not generate documents from blank templates, we do not represent you, and we do not perform services performed by an attorney. Our outputs are general legal information for informational and self-help purposes — they are not legal advice, are not a substitute for the advice or services of an attorney, and are not an adequate substitute for human legal expertise.

No attorney in the loop. Justee AI is AI-powered. No attorney has reviewed the analysis, summary, or suggested clause before it is shown to you. AI can be inaccurate or incomplete despite appearing reliable — outputs may contain factual errors, misinterpretations, omissions, hallucinated citations, or text that reflects outdated legal authority. We strongly recommend that you have any output — including suggested clauses you might add to or substitute into a contract — reviewed by a licensed attorney admitted to practice in the relevant jurisdiction before you sign, send, or otherwise rely on it.

No attorney–client relationship. Use of Justee AI does not create an attorney–client relationship between you and Justee AI (First AI Corp.) or any of its personnel. Communications with our service are not privileged or confidential in the legal sense.

Consult a licensed attorney. Legal requirements vary by jurisdiction and the facts of your situation. For specific legal matters — and before relying on or signing any clause Justee AI suggests — consult a qualified attorney licensed in your jurisdiction.

Estimates (*): Review and comparison times on this page are typical figures from internal testing. Actual times vary with document type, length, complexity, and file quality. Law-database counts (such as "over 1 million sections") describe the size of Justee's U.S. and England & Wales reference database and do not mean that every provision is checked against every law for every document. Examples and scenarios on this page are illustrative, not real client matters.

By using our service, you acknowledge that you have read and agree to our Terms of Use and understand the limitations of AI-powered legal analysis. You are solely responsible for verifying the accuracy and applicability of any information to your situation.

Subcontract Agreement Review FAQ

It depends on the state. CA, NY, NC, WI, and others do not enforce true pay-if-paid clauses. Justee flags pay-if-paid language and points to the rule in your state.

Generally only on payment, with state-specific form. CA Civil Code §8122 limits pre-payment waivers. Justee checks waiver language against the statutory form and flags gaps.

A subcontract clause binding you to the prime contract terms. Justee flags flow-down without delivery of the prime.

Often, yes. State anti-indemnity statutes (CA §2782, NY GOL §5-322.1) limit indemnity for the indemnitee's own negligence. Justee flags indemnity language that may go beyond those limits.

No. Justee flags risky payment, lien, and indemnity terms and explains them in plain English, so you know what to ask. It gives legal information, not legal advice. For advice on your project, talk to a construction lawyer in your state.

Both. Justee was built for U.S. law (any U.S. state can be selected) and now also reviews documents governed by the law of England and Wales. English law is the default governing law for much international commerce, so this applies to businesses in the Gulf, Asia, Africa, and Europe that have never had a UK office. Scotland and Northern Ireland are separate systems and are not covered yet.

Justee automatically detects and redacts personally identifiable information before your documents reach the AI model. Protected types include:

Personal data:
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Corporate and business data:
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  • Business addresses and geographic locations
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Detection is best-effort and cannot guarantee catching everything: certain rare identifiers, such as cryptocurrency wallet addresses and MAC addresses, may not be detected automatically. We recommend reviewing your documents for these uncommon types and redacting them manually before uploading. See our Privacy Policy and Terms of Use for details and limitations.

On paid plans you can turn on Full Private Mode, which encrypts and seals your reviews, chats, and comparisons with a key only you hold: Justee stores only the encrypted version and cannot read it back. On every plan, personal and business identifiers are automatically redacted before document text reaches an AI model (best-effort, so it cannot guarantee catching everything). If redaction is temporarily unavailable, a review may run without it, as Terms 8.5 explain. Nothing you submit is used to train AI models.

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Last updated: October 22, 2026

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Justee is not a law firm. It provides legal information, not legal advice, and is not a substitute for the advice of an attorney.