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1. Subcontracting means that you contract with another company to perform a portion of the work that the client has contracted you to do. If there is a problem YOU are responsible to the client because you were contracted to perform the work. The fact that you hired someone else to do it is not the clients problem. If you have a properly worded subcontract with your sub then THEY are should be responsible TO YOU for the work they did and for any problems that they cause. So if there were a legal issue the client would sue you and you would have to go after your sub. Ultimately you are responsible to the client. You can also just refer the client to the person you want to do the work. They can then contract on thier own. You don't get any of the money but you don't have the responsibility either.
2. I was about to start typing about T&M contracts (instead I will just say that T&M is okay for some circumstances but you will want to learn to bid jobs on a lump sum basis as soon as you can) but I really think you need to do some reading about this stuff or take a class. For everything you think you don't know about this right now there are twenty things that you are going to find out that you actually don't know when people start answering your questions. Every answer is going to leave you with a lot more questions.
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