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.
Georgia Construction Contract for Home — Fixed Fee or Cost Plus is a legally binding agreement between a contractor and a homeowner in the state of Georgia regarding the construction or renovation of a residential property. This contract establishes the terms and conditions under which the project will be carried out, including the payment structure, project scope, and responsibilities of both parties involved. In the context of residential construction projects, there are two common types of contracts: Fixed Fee and Cost Plus. 1. Fixed Fee Contract: — A Fixed Fee Contract specifies a predetermined, fixed amount that the homeowner will pay to the contractor for completing the project. — The contract will outline the scope of work that will be included within the fixed fee, ensuring that both parties have a clear understanding of the services to be rendered. — This type of contract provides homeowners with a sense of financial security, as they know the total cost of the project upfront. — Any changes or additions to the original scope of work may require a change order and may result in additional costs. 2. Cost Plus Contract: — A Cost Plus Contract, also known as a Cost Reimbursement Contract, involves the homeowner reimbursing the contractor for the actual costs incurred during the project, including materials, labor, and overhead expenses. — In a Cost Plus Contract, the contractor's fee is typically calculated as a percentage of the total cost of the project. — The contract will specify the basis for reimbursement, such as actual cost plus a percentage or a fixed fee on top of the actual costs. — A detailed breakdown of costs, including receipts and invoices, should be provided to the homeowner throughout the project. Regardless of the type of contract, both parties should carefully review and negotiate the terms and conditions to ensure fair and satisfactory project delivery. It is essential to have a clear understanding of project timelines, payment schedules, warranties, termination clauses, and dispute resolution mechanisms. Seeking legal advice before signing the contract is advisable to protect the rights and interests of both parties.Georgia Construction Contract for Home — Fixed Fee or Cost Plus is a legally binding agreement between a contractor and a homeowner in the state of Georgia regarding the construction or renovation of a residential property. This contract establishes the terms and conditions under which the project will be carried out, including the payment structure, project scope, and responsibilities of both parties involved. In the context of residential construction projects, there are two common types of contracts: Fixed Fee and Cost Plus. 1. Fixed Fee Contract: — A Fixed Fee Contract specifies a predetermined, fixed amount that the homeowner will pay to the contractor for completing the project. — The contract will outline the scope of work that will be included within the fixed fee, ensuring that both parties have a clear understanding of the services to be rendered. — This type of contract provides homeowners with a sense of financial security, as they know the total cost of the project upfront. — Any changes or additions to the original scope of work may require a change order and may result in additional costs. 2. Cost Plus Contract: — A Cost Plus Contract, also known as a Cost Reimbursement Contract, involves the homeowner reimbursing the contractor for the actual costs incurred during the project, including materials, labor, and overhead expenses. — In a Cost Plus Contract, the contractor's fee is typically calculated as a percentage of the total cost of the project. — The contract will specify the basis for reimbursement, such as actual cost plus a percentage or a fixed fee on top of the actual costs. — A detailed breakdown of costs, including receipts and invoices, should be provided to the homeowner throughout the project. Regardless of the type of contract, both parties should carefully review and negotiate the terms and conditions to ensure fair and satisfactory project delivery. It is essential to have a clear understanding of project timelines, payment schedules, warranties, termination clauses, and dispute resolution mechanisms. Seeking legal advice before signing the contract is advisable to protect the rights and interests of both parties.
