A cost-plus contract is one in which the purchaser agrees to pay the cost of all labor and materials plus an amount for contractor overhead and profit (usually as a percentage of the labor and material cost). This type of contract is often used when the scope of the work is undermined or highly uncertain and the kinds of labor, material and equipment needed are also uncertain. It is important that the contractor maintain complete records of all time and materials spent by the contractor on the work.
This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.
Illinois Home Improvement or Remodeling Construction Contract — Cost Plus Basis of Payment A Cost Plus Basis of Payment is one of the common types of contracts used for home improvement or remodeling construction projects in Illinois. This type of agreement allows homeowners and contractors to establish a transparent and flexible payment structure, ensuring that all costs associated with the project are adequately accounted for. In an Illinois Home Improvement or Remodeling Construction Contract — Cost Plus Basis of Payment, the contractor charges the homeowner for the actual cost of materials, labor, and any other expenses incurred during the construction process. Additionally, a percentage or fixed fee, known as the contractor's fee, is added to cover overhead costs and to provide the contractor with a profit. This type of contract offers several benefits for both homeowners and contractors. Firstly, it promotes transparency as all costs are itemized and documented throughout the project. This level of detail allows homeowners to have a clear understanding of how their money is being spent. Secondly, a Cost Plus contract provides flexibility, making it suitable for complex projects where there may be uncertainties in terms of the scope of work or unexpected circumstances. Under the Cost Plus Basis of Payment, there are two main types of contracts commonly used in Illinois: 1. Cost Plus Fixed Fee Contract: In this type of contract, the contractor charges the homeowners the actual cost of materials, labor, and expenses, and adds a fixed fee on top of the costs. The fixed fee is established at the beginning of the project and remains unchanged regardless of the project's progress or any unforeseen circumstances. 2. Cost Plus Percentage Contract: Unlike the fixed fee contract, the cost plus percentage contract involves the contractor charging the homeowner a percentage (e.g., 10%) of the total costs incurred during the project. This type of contract is suitable when the scope of work or project requirements may change or expand over time. In conclusion, an Illinois Home Improvement or Remodeling Construction Contract — Cost Plus Basis of Payment is an agreement that allows homeowners and contractors to establish a transparent and flexible payment structure for construction projects. The two main types of contracts under this basis of payment are the Cost Plus Fixed Fee Contract and the Cost Plus Percentage Contract. These contracts provide clarity and flexibility for both parties involved, ensuring that the project's costs are accounted for accurately.
