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.
Maricopa Arizona Construction Contract for Home — Fixed Fee or Cost Plus: A construction contract is an essential document that establishes the terms and conditions agreed upon between a homeowner and a construction contractor in Maricopa, Arizona. It outlines the scope of work, payment terms, timelines, and other vital aspects of the construction project. In Maricopa, homeowners have the option to choose between two common types of construction contracts: fixed fee and cost-plus contracts. Fixed Fee Contract: A fixed fee contract is a commonly used agreement in construction projects. In this type of contract, the homeowner and contractor agree upon a predetermined fixed price for the entire construction project. This fixed fee includes the cost of materials, labor, overhead, and any applicable profit margins. The advantage of a fixed fee contract is that it provides a clear and predictable budget for the homeowner, with minimal chances of cost overruns. However, any unforeseen changes or deviations from the original scope of work may result in additional change orders and additional costs. Cost Plus Contract: A cost-plus contract is another widely used option for construction projects in Maricopa, Arizona. In this contract, the homeowner agrees to reimburse the contractor for the actual cost of materials, labor, and any other direct expenses incurred during the project. Additionally, a predetermined fee or percentage (often referred to as a "mark-up") is added to cover the contractor's overhead and profit. Cost-plus contracts offer more flexibility for changes and modifications during the construction process, as the homeowner has more control over decision-making. However, it also entails a certain level of uncertainty, as the final cost is not fixed from the beginning. It's important to note that within the two primary types of contracts mentioned above, there may be variations or hybrid options that can be tailored to suit the specific needs of the construction project. Some additional contract types seen in Maricopa, Arizona, may include: 1. Guaranteed Maximum Price (GMP) Contract: This contract combines the advantages of both fixed fee and cost-plus contracts. The homeowner pays a predetermined maximum price for the project, ensuring cost certainty, but the contract also allows the contractor to share any cost savings or bear additional costs if they exceed the guaranteed maximum. 2. Unit Price Contract: This contract defines the price for each unit of work (e.g., per square foot, per hour, per fixture) and quantifies the overall cost based on the actual quantity of work performed. Unit price contracts are commonly used when the scope of work cannot be precisely determined upfront. In conclusion, when embarking on a construction project in Maricopa, Arizona, homeowners have the option to choose between fixed fee and cost-plus contracts. Contract types can vary depending on the specific needs of the project, with variations such as GMP and unit price contracts also being options. Careful consideration should be given to selecting the most suitable contract type, ensuring a transparent and mutually beneficial agreement between the homeowner and the construction contractor.Maricopa Arizona Construction Contract for Home — Fixed Fee or Cost Plus: A construction contract is an essential document that establishes the terms and conditions agreed upon between a homeowner and a construction contractor in Maricopa, Arizona. It outlines the scope of work, payment terms, timelines, and other vital aspects of the construction project. In Maricopa, homeowners have the option to choose between two common types of construction contracts: fixed fee and cost-plus contracts. Fixed Fee Contract: A fixed fee contract is a commonly used agreement in construction projects. In this type of contract, the homeowner and contractor agree upon a predetermined fixed price for the entire construction project. This fixed fee includes the cost of materials, labor, overhead, and any applicable profit margins. The advantage of a fixed fee contract is that it provides a clear and predictable budget for the homeowner, with minimal chances of cost overruns. However, any unforeseen changes or deviations from the original scope of work may result in additional change orders and additional costs. Cost Plus Contract: A cost-plus contract is another widely used option for construction projects in Maricopa, Arizona. In this contract, the homeowner agrees to reimburse the contractor for the actual cost of materials, labor, and any other direct expenses incurred during the project. Additionally, a predetermined fee or percentage (often referred to as a "mark-up") is added to cover the contractor's overhead and profit. Cost-plus contracts offer more flexibility for changes and modifications during the construction process, as the homeowner has more control over decision-making. However, it also entails a certain level of uncertainty, as the final cost is not fixed from the beginning. It's important to note that within the two primary types of contracts mentioned above, there may be variations or hybrid options that can be tailored to suit the specific needs of the construction project. Some additional contract types seen in Maricopa, Arizona, may include: 1. Guaranteed Maximum Price (GMP) Contract: This contract combines the advantages of both fixed fee and cost-plus contracts. The homeowner pays a predetermined maximum price for the project, ensuring cost certainty, but the contract also allows the contractor to share any cost savings or bear additional costs if they exceed the guaranteed maximum. 2. Unit Price Contract: This contract defines the price for each unit of work (e.g., per square foot, per hour, per fixture) and quantifies the overall cost based on the actual quantity of work performed. Unit price contracts are commonly used when the scope of work cannot be precisely determined upfront. In conclusion, when embarking on a construction project in Maricopa, Arizona, homeowners have the option to choose between fixed fee and cost-plus contracts. Contract types can vary depending on the specific needs of the project, with variations such as GMP and unit price contracts also being options. Careful consideration should be given to selecting the most suitable contract type, ensuring a transparent and mutually beneficial agreement between the homeowner and the construction contractor.
