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.
Louisiana Home Improvement or Remodeling Construction Contract — Cost Plus Basis of Payment is a legally binding agreement entered into between a homeowner or property owner and a contractor. This contract outlines the terms and conditions of a construction project where the total cost of the project is determined by the actual expenses incurred, plus an agreed-upon percentage or fee. Here is a detailed description of the Louisiana Home Improvement or Remodeling Construction Contract — Cost Plus Basis of Payment. Keywords: Louisiana, home improvement, remodeling, construction contract, cost plus basis of payment, types, terms and conditions, contractor, homeowner, property owner, legally binding, expenses, percentage, fee. Description: 1. Definition: The Louisiana Home Improvement or Remodeling Construction Contract — Cost Plus Basis of Payment is an agreement designed to govern construction projects where the total cost of the project is calculated based on the actual expenses incurred, including materials, labor, and other associated costs, plus an agreed-upon percentage or fee. 2. Parties Involved: The contract involves two primary parties, the homeowner or property owner seeking improvement or remodeling services and the contractor responsible for executing the project. The homeowner is referred to as the "Owner," and the contractor is referred to as the "Contractor" in the agreement. 3. Detailed Scope of Work: The contract includes a detailed description of the scope of work to be performed. This may encompass various tasks such as demolition, construction, renovation, installation, and other associated activities. It specifies the specific areas or aspects of the property to be improved or remodeled, including any specific materials, fixtures, or finishes. 4. Cost Calculation: Under this contract, the cost of the project is calculated on a cost-plus basis. This means that the homeowner will reimburse the contractor for the actual expenses incurred, including labor, materials, equipment, permits, and subcontractor fees, as supported by detailed invoices and receipts. Additionally, the agreement specifies an agreed-upon percentage, typically known as the contractor's fee, which includes the contractor's overhead and profit. 5. Payment Schedule: The contract outlines the payment schedule agreed upon by both parties. Typically, the homeowner is required to pay an initial deposit upfront, followed by periodic payments based on the completion of specific milestones or time frames. The agreement may also specify a final payment upon project completion, subject to any approved change orders or adjustments. 6. Change Orders: Any changes requested by the homeowner during the course of the project that may impact the overall cost are documented as change orders. These changes are typically approved in writing and may require an adjustment to the original contract amount or timeline. 7. Termination and Dispute Resolution: The contract provides provisions for termination, detailing the conditions under which either party can terminate the agreement. It also outlines the procedures for resolving disputes, which may involve mediation, arbitration, or litigation, depending on the preferences and obligations of the parties involved. Types of Louisiana Home Improvement or Remodeling Construction Contract — Cost Plus Basis of Payment: 1. Residential Home Improvement Contract: This type of contract applies to home improvement or remodeling projects involving residential properties, such as houses, apartments, or condominiums. It covers a wide range of projects, from small renovations to extensive additions or major remodels. 2. Commercial Remodeling Construction Contract: This variation of the contract is tailored for remodeling projects in commercial properties, such as offices, retail stores, restaurants, or warehouses. It may include specialized considerations, such as compliance with commercial building codes, ADA accessibility requirements, or specific industry regulations. In summary, the Louisiana Home Improvement or Remodeling Construction Contract — Cost Plus Basis of Payment is a comprehensive agreement that governs construction projects in Louisiana where the homeowner agrees to reimburse the contractor for actual expenses incurred, plus an agreed-upon percentage or fee. It provides clarity on the scope of work, payment structure, change orders, termination, and dispute resolution. Different types include residential home improvement contracts and commercial remodeling construction contracts.
