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.
North Carolina Home Improvement or Remodeling Construction Contract — Cost Plus Basis of Payment is a legal agreement between a homeowner and a contractor that outlines the terms and conditions for a home improvement or remodeling project in North Carolina. This type of contract allows for payment of the contractor based on the actual costs of labor, materials, and other expenses, plus an agreed-upon percentage or fixed fee for overhead and profit. Keywords: North Carolina, home improvement, remodeling, construction contract, cost plus basis of payment, legal agreement, homeowner, contractor, terms and conditions, payment, labor, materials, expenses, overhead, profit. There are two notable types of North Carolina Home Improvement or Remodeling Construction Contracts — Cost Plus Basis of Payment: 1. Fixed Percentage Markup: In this type of contract, the contractor charges a specific percentage markup on all costs incurred during the project. For example, if the contractor has a 15% markup and the total expenses for labor and materials amount to $10,000, the homeowner would pay an additional $1,500 (15% of $10,000) as overhead and profit to the contractor. 2. Fixed Fee: In this type of contract, the contractor charges a predetermined fixed fee for their overhead and profit, regardless of the actual project costs. This fee is agreed upon before the commencement of the project and remains constant throughout. For instance, if the fixed fee is set at $5,000, the homeowner would pay this amount in addition to the actual costs of labor, materials, and other expenses incurred during the project. It is crucial for both the homeowner and the contractor to thoroughly review and understand the terms specified in the North Carolina Home Improvement or Remodeling Construction Contract — Cost Plus Basis of Payment. This contract should include detailed provisions for payment schedules, change orders, warranties, dispute resolution, insurance, permits, and any specific requirements set forth by North Carolina state law. By utilizing this type of contract, homeowners can have greater transparency and control over their home improvement or remodeling projects, as they only pay for the actual costs involved, while allowing contractors to receive fair compensation for their services and overhead.
