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.
A New York Construction Contract for Home, specifically referring to the options of Fixed Fee or Cost Plus, is a legal agreement between a homeowner (the client) and a construction contractor (the builder) for the construction or renovation of a residential property in the state of New York. The Fixed Fee construction contract is a type of agreement where the contractor agrees to complete the project at a pre-determined fixed price. This fixed price includes labor, materials, subcontractors, and other project-related expenses. The contractor bears the risk of any unforeseen costs or delays, and the client pays the agreed-upon price upon completion of the project. This type of contract is suitable for homeowners who have a well-defined project scope and budget and prefer a predictable cost for the construction or renovation work. On the other hand, the Cost Plus construction contract is a type of agreement where the contractor is reimbursed for the actual costs incurred during the project, along with a predetermined percentage fee or markup. The actual costs encompass labor, materials, subcontractors, and other project-related expenses. In addition to the costs, the client pays the contractor a mutually agreed-upon percentage fee or markup for their services. This type of contract is suitable for homeowners who want a higher level of control and transparency over the project's costs and are comfortable with potential cost fluctuations. Both types of contracts have their advantages and considerations. The Fixed Fee contract provides homeowners with a clear budget and can incentivize the contractor to complete the project efficiently. However, it may not account for unexpected costs or changes in project specifications. The Cost Plus contract offers more flexibility and transparency in terms of cost-tracking, allowing the homeowner to have greater control over the project. However, it may require the client to closely monitor the budget and may lead to higher costs if not managed effectively. When entering into a New York Construction Contract for Home — Fixed Fee or Cost Plus, it is essential to include key elements such as a detailed project description, timeline, payment terms, change order procedures, insurance requirements, warranties, dispute resolution mechanisms, and any other specific terms and conditions agreed upon between the parties. By considering the specific needs and preferences of the homeowner, along with the nature and complexity of the construction or renovation project, the appropriate contract type can be chosen to ensure a successful and satisfactory outcome.A New York Construction Contract for Home, specifically referring to the options of Fixed Fee or Cost Plus, is a legal agreement between a homeowner (the client) and a construction contractor (the builder) for the construction or renovation of a residential property in the state of New York. The Fixed Fee construction contract is a type of agreement where the contractor agrees to complete the project at a pre-determined fixed price. This fixed price includes labor, materials, subcontractors, and other project-related expenses. The contractor bears the risk of any unforeseen costs or delays, and the client pays the agreed-upon price upon completion of the project. This type of contract is suitable for homeowners who have a well-defined project scope and budget and prefer a predictable cost for the construction or renovation work. On the other hand, the Cost Plus construction contract is a type of agreement where the contractor is reimbursed for the actual costs incurred during the project, along with a predetermined percentage fee or markup. The actual costs encompass labor, materials, subcontractors, and other project-related expenses. In addition to the costs, the client pays the contractor a mutually agreed-upon percentage fee or markup for their services. This type of contract is suitable for homeowners who want a higher level of control and transparency over the project's costs and are comfortable with potential cost fluctuations. Both types of contracts have their advantages and considerations. The Fixed Fee contract provides homeowners with a clear budget and can incentivize the contractor to complete the project efficiently. However, it may not account for unexpected costs or changes in project specifications. The Cost Plus contract offers more flexibility and transparency in terms of cost-tracking, allowing the homeowner to have greater control over the project. However, it may require the client to closely monitor the budget and may lead to higher costs if not managed effectively. When entering into a New York Construction Contract for Home — Fixed Fee or Cost Plus, it is essential to include key elements such as a detailed project description, timeline, payment terms, change order procedures, insurance requirements, warranties, dispute resolution mechanisms, and any other specific terms and conditions agreed upon between the parties. By considering the specific needs and preferences of the homeowner, along with the nature and complexity of the construction or renovation project, the appropriate contract type can be chosen to ensure a successful and satisfactory outcome.
