This form is a Construction Contract. The form contains the following subjects: scope of work, work site, and insurance. The contractor's warranty is limited to defects in workmanship within the scope of the work performed by the contractor.
What is a Construction contract agreement?
If you’re planning to build, renovate or reconstruct your house, you will need to enter into a contract for home construction with the building contractor, defining your mutual rights and responsibilities. This agreement contains project specifics, the contractor’s license and insurance details, the requested scope of work, etc. It may also determine the potential lien on the property should the work not be paid in full.
Types of construction contracts
Depending on the payment arrangements determined by parties, there are four basic types of home builders’ contracts:
1. Fixed price (or lump-sum) agreements set the price for the completed job right from the start. Although fixed, the document may also include provisions defining penalties (for example, if the constructor fails to finish the work on schedule).
2. Cost plus construction agreements set the price for the finished work based on building materials and labor with additionally mentioned “plus” (a percentage of the total costs or a fixed fee).
3. Time and material agreements set the price for the work without a “plus,” but the client pays the contractor a daily or hourly rate while they are under contract.
4. Unit-price agreements are standard in bidding, particularly for federal building projects. Both owner and contractor define the price that the contractor charges for a standard unit without any specific extra fees for other units.
The first two types of contract for home construction mentioned are the most popular ones. Let’s take a closer look at them.
Fixed price vs. cost-plus contract benefits
The fixed price agreement benefits owners more than builders, as it determines at the moment the parties seal the deal the exact price the contractor will get after they complete all the work. Builders risk not getting the estimated profits they initially anticipated, as expenses may increase significantly but remain the constructor’s responsibility.
The cost-plus construction deal contains the evaluation of the final project cost; however, it doesn’t determine the final contract price until the contractor completes all the work. Unlike the fixed-price agreement, it separates expenses and sets the profit rate (as a percentage of the final project cost or as a flat amount), so contractors prefer this type of agreement; it is riskier for homeowners.
Information you should provide in the construction contract agreement
The presented Construction Contract for Home is a universal multi-state construction contract template. This sample describes typical terms for a home building contract. Download a printable document version from our website or amend and fill it out online. Make sure to provide the following information:
• Name and contact details of the contractor and their license number;
• Name and contact details of the homeowner;
• Property legal description from county clerk’s records;
• Project description with blueprints and building specifications;
• Scope, description of work, and its estimated final dates;
• Costs of work and responsibilities of parties for any breach of contract.
An Arizona Construction Contract for Home — Fixed Fee or Cost Plus is a legal agreement between a homeowner and a construction contractor in the state of Arizona. This contract outlines the terms and conditions under which the contractor will provide construction services for the home project. In a Fixed Fee contract, the contractor agrees to complete the construction project for a predetermined fixed amount. This fixed fee is determined through negotiations between the homeowner and the contractor before the project commences. The contractor is responsible for managing costs within the agreed-upon fee, including materials, labor, and other necessary expenses. This type of contract is often preferred by homeowners who prefer a clear understanding of the total cost upfront. On the other hand, a Cost Plus contract, also known as a Cost-Reimbursement contract, involves the homeowner reimbursing the contractor for all project-related expenses, such as materials, labor, and other costs incurred during construction. In this type of contract, the contractor charges the actual cost of each item used in the construction project, along with an agreed-upon fee or percentage of the total cost as compensation for their services. The homeowner usually retains more control over the project and has increased transparency into the costs involved. In both types of contracts, key elements that need to be included and clearly defined are: 1. Scope of work: A detailed description of the project, including plans, specifications, and any other relevant documents outlining what work needs to be performed. 2. Cost estimation: An estimate of the total project cost, including the fixed fee in the Fixed Fee contract or an estimate of costs, including labor rates, material costs, and an agreed-upon fee, in the Cost Plus contract. 3. Payment terms: The agreed-upon schedule and method of payment, including the frequency and amount of payments, as well as any milestones or progress payments. 4. Duration and timeline: The anticipated start and completion dates of the construction project, including any provisions for extensions due to unforeseen circumstances. 5. Change orders: A provision outlining the process for making changes to the original scope of work or specifications, including the cost and timeline implications of any changes. 6. Dispute resolution: A mechanism for resolving any potential disputes that may arise during the project, such as mediation or arbitration. 7. Indemnification and insurance: A clause that specifies the respective responsibilities of the homeowner and the contractor regarding liability and insurance coverage during the construction project. It is important for both parties to carefully review and understand the terms of the Arizona Construction Contract for Home — Fixed Fee or Cost Plus before signing, as it serves as a legally binding agreement that outlines the rights and obligations of each party involved in the construction project.An Arizona Construction Contract for Home — Fixed Fee or Cost Plus is a legal agreement between a homeowner and a construction contractor in the state of Arizona. This contract outlines the terms and conditions under which the contractor will provide construction services for the home project. In a Fixed Fee contract, the contractor agrees to complete the construction project for a predetermined fixed amount. This fixed fee is determined through negotiations between the homeowner and the contractor before the project commences. The contractor is responsible for managing costs within the agreed-upon fee, including materials, labor, and other necessary expenses. This type of contract is often preferred by homeowners who prefer a clear understanding of the total cost upfront. On the other hand, a Cost Plus contract, also known as a Cost-Reimbursement contract, involves the homeowner reimbursing the contractor for all project-related expenses, such as materials, labor, and other costs incurred during construction. In this type of contract, the contractor charges the actual cost of each item used in the construction project, along with an agreed-upon fee or percentage of the total cost as compensation for their services. The homeowner usually retains more control over the project and has increased transparency into the costs involved. In both types of contracts, key elements that need to be included and clearly defined are: 1. Scope of work: A detailed description of the project, including plans, specifications, and any other relevant documents outlining what work needs to be performed. 2. Cost estimation: An estimate of the total project cost, including the fixed fee in the Fixed Fee contract or an estimate of costs, including labor rates, material costs, and an agreed-upon fee, in the Cost Plus contract. 3. Payment terms: The agreed-upon schedule and method of payment, including the frequency and amount of payments, as well as any milestones or progress payments. 4. Duration and timeline: The anticipated start and completion dates of the construction project, including any provisions for extensions due to unforeseen circumstances. 5. Change orders: A provision outlining the process for making changes to the original scope of work or specifications, including the cost and timeline implications of any changes. 6. Dispute resolution: A mechanism for resolving any potential disputes that may arise during the project, such as mediation or arbitration. 7. Indemnification and insurance: A clause that specifies the respective responsibilities of the homeowner and the contractor regarding liability and insurance coverage during the construction project. It is important for both parties to carefully review and understand the terms of the Arizona Construction Contract for Home — Fixed Fee or Cost Plus before signing, as it serves as a legally binding agreement that outlines the rights and obligations of each party involved in the construction project.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés. For your convenience, the complete English version of this form is attached below the Spanish version.