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.
A Salt Lake Utah construction contract for home can be categorized into two main types: Fixed Fee and Cost Plus contracts. Both these types have their own advantages and considerations, and it is essential to understand the differences to determine the most suitable option for your construction project. 1. Fixed Fee Construction Contract: A fixed fee contract, also known as a lump-sum contract, is a commonly used agreement in the construction industry. In this type of contract, the contractor provides a fixed price for the entire project, regardless of the actual costs incurred during construction. The homeowner pays the contractor the predetermined amount, which covers all materials, labor, and overhead costs involved in the project. The contractor is responsible for managing the project within the given budget, ensuring that it is completed on time and meets the agreed-upon specifications. Benefits of Fixed Fee Contracts: — Predictability: With a fixed fee contract, homeowners have a clear understanding of project costs from the start, allowing for better budget planning. — Cost Control: Contractors assume the risk of any cost overruns, making them responsible for managing and controlling project expenses. — Simplicity: Fixed fee contracts provide both homeowners and contractors with a straightforward agreement, reducing the potential for disputes. 2. Cost Plus Construction Contract: A cost-plus contract, as the name suggests, involves payment of all construction costs incurred, plus an additional agreed-upon fee or percentage for the contractor's profit. This type of contract is based on actual project costs, including labor, materials, equipment, permits, and subcontractor fees. The homeowner reimburses the contractor for these costs along with the predetermined percentage, which represents the contractor's profit. Benefits of Cost Plus Contracts: — Full Cost Transparency: Homeowners can closely track all project expenses, ensuring that they are getting fair pricing on materials and subcontractor services. — Flexibility: Changes and modifications can be easily incorporated into the project without significant legal or contractual issues. — Collaboration: Cost plus contracts foster strong collaboration between homeowners and contractors, as both parties work closely together to manage project costs effectively. In conclusion, a Salt Lake Utah construction contract for home can either be a fixed fee or cost-plus contract. While fixed fee contracts provide predictability and cost control, cost-plus contracts offer transparency and flexibility. Homeowners should carefully consider their project requirements, budget, and desired level of involvement when determining the most appropriate contract type.A Salt Lake Utah construction contract for home can be categorized into two main types: Fixed Fee and Cost Plus contracts. Both these types have their own advantages and considerations, and it is essential to understand the differences to determine the most suitable option for your construction project. 1. Fixed Fee Construction Contract: A fixed fee contract, also known as a lump-sum contract, is a commonly used agreement in the construction industry. In this type of contract, the contractor provides a fixed price for the entire project, regardless of the actual costs incurred during construction. The homeowner pays the contractor the predetermined amount, which covers all materials, labor, and overhead costs involved in the project. The contractor is responsible for managing the project within the given budget, ensuring that it is completed on time and meets the agreed-upon specifications. Benefits of Fixed Fee Contracts: — Predictability: With a fixed fee contract, homeowners have a clear understanding of project costs from the start, allowing for better budget planning. — Cost Control: Contractors assume the risk of any cost overruns, making them responsible for managing and controlling project expenses. — Simplicity: Fixed fee contracts provide both homeowners and contractors with a straightforward agreement, reducing the potential for disputes. 2. Cost Plus Construction Contract: A cost-plus contract, as the name suggests, involves payment of all construction costs incurred, plus an additional agreed-upon fee or percentage for the contractor's profit. This type of contract is based on actual project costs, including labor, materials, equipment, permits, and subcontractor fees. The homeowner reimburses the contractor for these costs along with the predetermined percentage, which represents the contractor's profit. Benefits of Cost Plus Contracts: — Full Cost Transparency: Homeowners can closely track all project expenses, ensuring that they are getting fair pricing on materials and subcontractor services. — Flexibility: Changes and modifications can be easily incorporated into the project without significant legal or contractual issues. — Collaboration: Cost plus contracts foster strong collaboration between homeowners and contractors, as both parties work closely together to manage project costs effectively. In conclusion, a Salt Lake Utah construction contract for home can either be a fixed fee or cost-plus contract. While fixed fee contracts provide predictability and cost control, cost-plus contracts offer transparency and flexibility. Homeowners should carefully consider their project requirements, budget, and desired level of involvement when determining the most appropriate contract type.
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.
