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 West Virginia Construction Contract for Home refers to the legally binding agreement between a homeowner and a construction contractor in West Virginia, outlining the terms and conditions of the construction project. This contract is specifically designed for residential construction projects and can be categorized into two main types: Fixed Fee and Cost Plus. 1. Fixed Fee Contracts: A Fixed Fee Contract, also known as a lump sum contract, entails that the contractor agrees to complete the project for a predetermined, fixed amount of money. The homeowner and the contractor negotiate and agree upon the fixed fee before the commencement of the project. This type of contract is beneficial for homeowners who prefer absolute certainty in terms of project costs and want to avoid unexpected expenses that may arise throughout the construction process. Keywords associated with this type of contract include predetermined price, fixed cost, and lump sum agreement. 2. Cost Plus Contracts: On the other hand, Cost Plus Contracts, also referred to as a time and materials contract, involve the homeowner paying the contractor for the project costs as well as a certain percentage or fee for the contractor's services. In this type of contract, the homeowner agrees to reimburse the contractor for all the actual costs incurred during the construction process, such as materials, labor, equipment, and subcontractor fees. Additionally, the homeowner also pays the contractor a mutually agreed-upon fee or percentage of the total project cost for their services. This contract type allows for more flexibility in the construction process, as it adjusts to any unforeseen circumstances or changes in project scope. Keywords associated with this type of contract include reimbursement, actual costs, and fee percentage. Regardless of the type of contract, a West Virginia Construction Contract for Home typically includes several essential elements. These include: 1. Project Scope: The contract should outline a detailed description of the construction project, specifying the work to be performed, materials to be used, and any relevant drawings or plans. 2. Project Timeline: The contract should establish a clear timeline for the construction project, setting deadlines for different phases of construction and the overall completion date. 3. Payment Terms: The payment terms must be clearly defined, specifying the method and frequency of payments, as well as any required deposits or milestones. 4. Change Orders: The contract should address the process for handling changes or modifications to the scope of the project, including the procedure for approving and pricing change orders. 5. Termination Clause: This section outlines the conditions under which either party can terminate the contract before completion. 6. Insurance and Liability: The contract should address the insurance requirements for both the homeowner and the contractor, including general liability and workers' compensation. 7. Dispute Resolution: The contract may include a provision specifying the method for resolving any disputes that may arise during the construction process, such as mediation, arbitration, or litigation. It is important for both the homeowner and the contractor to carefully review and understand the terms of the contract before signing, ensuring that all parties have a clear understanding of their rights and obligations throughout the construction project.
