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.
Tennessee Home Improvement or Remodeling Construction Contract — Cost Plus Basis of Payment is a legal agreement between a homeowner and a contractor for carrying out home improvement or remodeling projects. This type of contract is based on the cost plus basis of payment, wherein the contractor is compensated for the actual costs incurred in addition to a predetermined percentage or fee for their services. In this contract, various relevant terms and conditions are included to ensure clarity and transparency between both parties involved. Here is a detailed description of some important components typically found in Tennessee Home Improvement or Remodeling Construction Contract — Cost Plus Basis of Payment: 1. Contractor and homeowner information: The contract should clearly mention the full names, addresses, and contact details of the contractor and the homeowner. 2. Project description: The contract should define the scope of work in detail, including the specific improvements or remodeling to be undertaken, materials to be used, and any specific timeline or milestones. 3. Cost estimation: The contract should outline the estimated cost for the project, including labor, materials, permits, and any other applicable expenses. It may also mention that the final cost will be based on the actual expenses incurred. 4. Cost plus fee or percentage: The contract should specify the contractor's fee, either as a fixed percentage of the project cost or as a specific fee for their services. 5. Payment terms: The contract should outline the payment schedule, including any upfront payment, progress payments based on project milestones, and final payment upon completion. It should also state the acceptable payment methods. 6. Change orders: The contract should address any changes or additions requested by the homeowner during the project, stating that these will be considered as change orders and may result in adjustments to the project cost. 7. Permits and licenses: The contract should indicate that the contractor is responsible for obtaining any necessary permits or licenses required for the project. 8. Insurance and liability: The contract should include provisions for insurance coverage, including liability insurance to protect both the contractor and the homeowner in case of accidents or damages during the construction process. Types of Tennessee Home Improvement or Remodeling Construction Contract — Cost Plus Basis of Payment can include variations based on project size, complexity, and specific requirements. Some common types are: 1. Residential Remodeling Contract — Cost Plus Basis: This contract specifically caters to residential remodeling projects, such as kitchen renovations, bathroom upgrades, or basement finishing. 2. Commercial Improvement Contract — Cost Plus Basis: This contract is designed for commercial property owners or businesses seeking improvements or renovations to their establishments. 3. Major Renovation Contract — Cost Plus Basis: This type of contract covers extensive and substantial renovation projects, involving structural changes, room additions, or complete overhauls of existing spaces. 4. Interior Design Contract — Cost Plus Basis: This contract focuses on interior design projects, considering aesthetic improvements and material selection, while still following the cost plus basis of payment. Remember, it is crucial to consult with a legal professional while drafting or entering into any construction contract to ensure all local laws and regulations are followed and protect the interests of both parties involved.
