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.
Montana Construction Contract for Home — Fixed Fee or Cost Plus refers to a legally binding agreement between a homeowner (client) and a contractor (service provider) in the state of Montana for the construction or remodeling of a residential property. This contract outlines the terms, specifications, and conditions under which the project will be undertaken. A fixed fee contract, also known as a lump sum contract, establishes a predetermined amount that the contractor will be paid for completing the project. This amount is agreed upon between the homeowner and the contractor before the construction work begins. The fixed fee includes all costs associated with labor, materials, permits, and any additional expenses. This type of contract provides the homeowner with a clear expectation of the total project cost. On the other hand, a cost-plus contract is a more flexible agreement that allows the contractor to be reimbursed for both the direct costs and an additional percentage or fee for overhead and profit. In a cost-plus contract, the client pays for the actual expenses incurred during construction, such as materials, labor, permits, equipment, and subcontractor fees. The contractor then adds a predetermined fee or percentage to cover their indirect expenses and profit. There are typically two types of cost-plus contracts: cost-plus percentage fee and cost-plus fixed fee. In a cost-plus percentage fee contract, the contractor charges the client a percentage fee on top of the actual costs incurred. This percentage fee is often based on the contractor's overhead costs and desired profit margin. In a cost-plus fixed fee contract, the contractor charges the client a fixed fee that covers their overhead costs and profit, regardless of the total project cost. Unlike the cost-plus percentage fee contract, there is no percentage fluctuation based on the actual costs incurred. Both the fixed fee and cost-plus contracts should explicitly outline the scope of work, project timeline, payment schedule, change order procedures, and provisions for dispute resolution. It is crucial for homeowners to carefully review and understand the terms and conditions of the contract before signing, ensuring that the agreement meets their specific needs and budget. It is important to note that Montana construction contracts may also be subject to specific state regulations, including licensing requirements, insurance coverage, and lien laws. Therefore, it is recommended to consult with legal professionals or construction experts familiar with Montana's construction laws when drafting or entering into such contracts.Montana Construction Contract for Home — Fixed Fee or Cost Plus refers to a legally binding agreement between a homeowner (client) and a contractor (service provider) in the state of Montana for the construction or remodeling of a residential property. This contract outlines the terms, specifications, and conditions under which the project will be undertaken. A fixed fee contract, also known as a lump sum contract, establishes a predetermined amount that the contractor will be paid for completing the project. This amount is agreed upon between the homeowner and the contractor before the construction work begins. The fixed fee includes all costs associated with labor, materials, permits, and any additional expenses. This type of contract provides the homeowner with a clear expectation of the total project cost. On the other hand, a cost-plus contract is a more flexible agreement that allows the contractor to be reimbursed for both the direct costs and an additional percentage or fee for overhead and profit. In a cost-plus contract, the client pays for the actual expenses incurred during construction, such as materials, labor, permits, equipment, and subcontractor fees. The contractor then adds a predetermined fee or percentage to cover their indirect expenses and profit. There are typically two types of cost-plus contracts: cost-plus percentage fee and cost-plus fixed fee. In a cost-plus percentage fee contract, the contractor charges the client a percentage fee on top of the actual costs incurred. This percentage fee is often based on the contractor's overhead costs and desired profit margin. In a cost-plus fixed fee contract, the contractor charges the client a fixed fee that covers their overhead costs and profit, regardless of the total project cost. Unlike the cost-plus percentage fee contract, there is no percentage fluctuation based on the actual costs incurred. Both the fixed fee and cost-plus contracts should explicitly outline the scope of work, project timeline, payment schedule, change order procedures, and provisions for dispute resolution. It is crucial for homeowners to carefully review and understand the terms and conditions of the contract before signing, ensuring that the agreement meets their specific needs and budget. It is important to note that Montana construction contracts may also be subject to specific state regulations, including licensing requirements, insurance coverage, and lien laws. Therefore, it is recommended to consult with legal professionals or construction experts familiar with Montana's construction laws when drafting or entering into such contracts.
