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 construction contract is a legally binding agreement between a homeowner and a construction contractor that outlines the terms and conditions of the project. In San Antonio, Texas, there are two common types of construction contracts for home projects — Fixed Fee and Cost Plus contracts. 1. San Antonio Texas Construction Contract for Home — Fixed Fee: A Fixed Fee construction contract in San Antonio sets a predetermined and fixed price for the entire home construction project. This type of contract is suitable when the scope of work, materials, and labor costs can be accurately estimated before the project begins. Here are some key features of a Fixed Fee contract: — Predetermined Price: The contract clearly states the fixed amount that the homeowner will pay for the entire project, regardless of any changes or unforeseen circumstances that may arise during construction. — Detailed Project Scope: The agreement includes a detailed description of the work to be performed, including specific materials, finishes, and desired outcomes agreed upon by both parties. — Change Orders: Changes to the project scope, materials, or finishes may require change orders. These changes are typically addressed separately with additional costs discussed and agreed upon by both parties before implementation. — Payment Schedule: The contract establishes a payment schedule, including a down payment, progress payments at specific project milestones, and a final payment upon completion and inspection. — Completion Timeline: The contract specifies the project's expected start and completion dates, ensuring clarity and accountability for both parties involved. 2. San Antonio Texas Construction Contract for Home — Cost Plus: A Cost Plus construction contract in San Antonio involves the homeowner paying the actual cost of construction materials, labor, and additional expenses, plus a markup or fee to cover the contractor's overhead and profit. Here are some key features of a Cost Plus contract: — Transparent Cost Breakdown: The homeowner has full visibility into the actual costs incurred throughout the project, including materials, labor, permits, and subcontractor fees. The contractor provides detailed invoices and receipts to support these costs. — Markup or Fee: In addition to reimbursing the contractor for the actual costs incurred, the homeowner pays a predetermined percentage or fixed fee as compensation for the contractor's services and profit. — Flexibility for Changes: A Cost Plus contract allows for more flexibility in accommodating changes and unforeseen circumstances during construction. Changes to the project scope, materials, or finishes are addressed within the contract through formal change orders. — Progressive Billing: The homeowner is invoiced on a regular basis, typically monthly, for the actual costs incurred and the agreed-upon markup or fee. — Detailed Documentation: The contract requires the contractor to maintain meticulous records of all expenses related to the project. These records serve as evidence of the actual costs incurred by the contractor. — Estimated Maximum Cost: While a Cost Plus contract may not have a predetermined fixed price, it usually includes an estimated maximum cost to provide the homeowner with an idea of the project's potential total cost. In conclusion, San Antonio, Texas, offers homeowners two common types of construction contracts for home projects: Fixed Fee and Cost Plus. Both contracts have their advantages, and choosing the most suitable one depends on the homeowner's preferences, budget, and the complexity of the project. It's crucial for homeowners to carefully review and understand the terms and conditions of any construction contract before signing to ensure a successful and satisfactory outcome.
