Construction Contract Cost Plus With Guaranteed Maximum Price In Phoenix

State:
Multi-State
City:
Phoenix
Control #:
US-00462
Format:
Word; 
Rich Text
Instant download

Description

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.

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FAQ

Maximum Contract Value means the amount specified in the "Limitation of Expenditure" clause set out in the Contract; and “Minimum Contract Value “means 10% of the Maximum Contract Value.

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More info

Guaranteed maximum pricing provides the benefit of certainty to buyers and provides flexibility when it is difficult to estimate the total cost of completing. A guaranteed maximum price contract is a contract with a hard cap on the costs that the customer will pay, regardless of what happens during the contract.With GMP contracts, the customer agrees to reimburse the contractor for materials, labor and the contractor's fee that covers profit. Cost-plus-fixed fee with guaranteed maximum price agreements are a hybrid of project reimbursement and lump-sum payments. A GMP contract is a contractual agreement between a contractor and project owner that sets a maximum cost for the construction work of a project. This post first discusses the differences between the Fixed Fee and CostPlus GMP approaches to contractor compensation. Guaranteed Maximum Price (GMP) the sum of the maximum Cost of Work including the CMAR's. Contract. III. CONTRACT PRICE. A costplus contract with a GMP is a great way for an owner to optimize the construction process with a lot of transparency. G4S is the world's leading integrated security company, providing security solutions to governments, businesses, and individuals in over 90 countries.

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Construction Contract Cost Plus With Guaranteed Maximum Price In Phoenix