Different Types Construction Contract That You Need to Know
Have you ever heard of a construction contract? This kind of contract is a legal agreement between the builder and the owner of a building that is being constructed. Construction contracts are made to describe the amount of compensation in the executed job. They are also made to explain the distribution of that compensation.
What you might not know is that there are several different types of construction contracts that you will be able to find. Here are the most common construction contracts that you will be able to find.
This kind of contract provides information about the fixed price for all construction activities. It may also include incentives and penalties for an early or late termination.
Cost Plus Contract
A cost-plus contract contains the actual costs of the construction activities. These costs are generated directly from the activities in the construction itself.
Time and Material Contract
The time and material contract is what you can make if there is no clear definition of the construction activities. You need to display an hourly or daily rate in this contract.
Sample of Construction Contract :
Unit Pricing Contract
You can commonly see a unit pricing contract used by builders and federal agencies. In this construction contract, the unit prices can be set during the bidding.
Construction Contract | word – download