This form is a Construction Contract that may be executed with either a cost plus or fixed fee payment arrangement. The form contains the following additional subject matters and complies with the laws of the State of Washington: scope of work, work site, warranty and insurance.
Everett Washington Construction Contract: Cost Plus or Fixed Fee When entering into a construction contract in Everett, Washington, there are two common types of agreements that are widely used: Cost Plus and Fixed Fee contracts. These contracts outline the terms and conditions of the construction project, specifically related to the payment structure between the owner or client and the contractor. Let's delve into the details of each type: 1. Cost Plus Contract: A Cost Plus contract is an agreement where the client agrees to pay the contractor for the actual costs incurred during the construction process. In addition to the actual costs, a predetermined fee is added to cover the contractor's overheads and profit. This type of contract provides transparency as all expenses are accounted for and openly shared with the client. Keywords: Construction contract, Everett Washington, Cost Plus, payment structure, actual costs, predetermined fee, transparency, expenses, contractor's overheads, profit. 2. Fixed Fee Contract: A Fixed Fee contract, also referred to as a Lump Sum contract, is an agreement where the client and contractor agree upon a fixed sum for the entire construction project. The contractor is responsible for completing the project within the agreed budget, regardless of the actual costs incurred. This type of contract protects the client from unexpected cost overruns, offering financial stability. Keywords: Construction contract, Everett Washington, Fixed Fee, Lump Sum, fixed sum, construction project, agreed budget, cost overruns, financial stability. There are also variations or combinations of these two primary types, such as: — Cost Plus a Fixed Fee Contract: This contract structure combines the transparency of the Cost Plus contract with a predetermined fixed fee, providing an added level of financial security for both parties involved. — Cost Plus a Percentage Fee Contract: In this type of contract, the contractor charges a percentage of the total costs as a fee, instead of a fixed fee, ensuring that the contractor's profit scales with the project's expenses. Keywords: Cost Plus a Fixed Fee, Cost Plus a Percentage Fee, transparency, financial security, contractor's profit, project's expenses. In summary, when establishing a construction contract in Everett, Washington, both Cost Plus and Fixed Fee contracts are viable options. The choice between them depends on the client's preferences, risk tolerance, and project requirements. It is crucial for both parties to thoroughly review the contract terms and ensure mutual understanding and agreement on the selected payment structure to avoid any potential conflicts during the construction process.
