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.
The Michigan Construction Contract for Home — Fixed Fee or Cost Plus is a legal agreement between a homeowner and a construction contractor in the state of Michigan. This contract outlines the terms and conditions for a construction project and defines the payment structure between the parties involved. The Fixed Fee contract is one of the common types of construction contracts in Michigan. In this agreement, the contractor provides the homeowner with a fixed price for the entirety of the project. This means that regardless of any changes or unexpected costs that may arise during the construction process, the contractor is responsible for covering them. The homeowner will pay the agreed-upon fixed fee to the contractor upon completion of the project. On the other hand, the Cost Plus contract is another type of construction contract used in Michigan. In this arrangement, the homeowner agrees to pay the contractor for the actual costs incurred during the construction, including materials, labor, and overhead expenses. Additionally, the contractor is entitled to a predetermined percentage or fee on top of the total cost as profit. This type of contract can be useful when there is uncertainty about the exact scope of work or when the project involves numerous unpredictable factors. It is important to note that Michigan Construction Contract for Home — Fixed Fee or Cost Plus contracts can also include supplementary clauses to address specific aspects of the project. These clauses may cover topics such as project timelines, warranty provisions, change order procedures, dispute resolution methods, and licensing requirements. Including such clauses helps protect both parties' interests and establishes clear expectations. When entering into a Michigan Construction Contract for Home — Fixed Fee or Cost Plus, it is advised to seek legal counsel to ensure all requirements and regulations are met. The contract should include detailed descriptions of the project scope, specifications, and any relevant plans or blueprints. It is also important to clearly outline the payment schedule, including deadlines and methods of payment. By selecting the appropriate type of Michigan Construction Contract for Home — Fixed Fee or Cost Plus and thoroughly understanding its terms and conditions, homeowners can establish a solid foundation for a successful construction project while providing essential protections for both parties involved.The Michigan Construction Contract for Home — Fixed Fee or Cost Plus is a legal agreement between a homeowner and a construction contractor in the state of Michigan. This contract outlines the terms and conditions for a construction project and defines the payment structure between the parties involved. The Fixed Fee contract is one of the common types of construction contracts in Michigan. In this agreement, the contractor provides the homeowner with a fixed price for the entirety of the project. This means that regardless of any changes or unexpected costs that may arise during the construction process, the contractor is responsible for covering them. The homeowner will pay the agreed-upon fixed fee to the contractor upon completion of the project. On the other hand, the Cost Plus contract is another type of construction contract used in Michigan. In this arrangement, the homeowner agrees to pay the contractor for the actual costs incurred during the construction, including materials, labor, and overhead expenses. Additionally, the contractor is entitled to a predetermined percentage or fee on top of the total cost as profit. This type of contract can be useful when there is uncertainty about the exact scope of work or when the project involves numerous unpredictable factors. It is important to note that Michigan Construction Contract for Home — Fixed Fee or Cost Plus contracts can also include supplementary clauses to address specific aspects of the project. These clauses may cover topics such as project timelines, warranty provisions, change order procedures, dispute resolution methods, and licensing requirements. Including such clauses helps protect both parties' interests and establishes clear expectations. When entering into a Michigan Construction Contract for Home — Fixed Fee or Cost Plus, it is advised to seek legal counsel to ensure all requirements and regulations are met. The contract should include detailed descriptions of the project scope, specifications, and any relevant plans or blueprints. It is also important to clearly outline the payment schedule, including deadlines and methods of payment. By selecting the appropriate type of Michigan Construction Contract for Home — Fixed Fee or Cost Plus and thoroughly understanding its terms and conditions, homeowners can establish a solid foundation for a successful construction project while providing essential protections for both parties involved.
