What are the various types of contracts used in the construction industry?

Construction law in Washington covers a variety of different contract types used in the construction industry. The two most common forms of construction contracts are lump sum contracts and cost plus contracts. A lump sum contract is an agreement where the contractor agrees to complete the project for a set amount of money. The contractor is given a fixed price for the work, and the owner is responsible for any additional costs. The scope of work to be completed under the contract must be clearly defined and agreed upon by both parties. In comparison, a cost plus contract is an agreement where the contractor agrees to complete the project for a set amount of money plus any additional costs incurred. The contractor is paid a sum of money based on the actual costs of completing the project, plus a negotiated fee. This contract type is typically used in cases where a project’s scope is not clearly defined or where the scope may change during the project. Other contract types used in the construction industry include unit price contracts, design-build contracts, and fixed-price contracts. Unit price contracts are agreements based on a per-unit cost of the work specified, while design-build contracts are agreements in which the contractor is responsible for both the design and construction of the project. Lastly, fixed-price contracts are agreements in which the contractor is responsible for completing the project for a predetermined fee. In conclusion, there are a variety of different contract types used in the construction industry. Each type of contract has its own advantages and disadvantages, and it is important for each party to understand the details of the contract before signing.

Related FAQs

What is the role of a mediator in a construction dispute?
What are the legal requirements for construction workers?
What should be included in a construction contract?
What happens in the event of a defective construction product?
What entities are liable when construction defects occur?
What are the legal requirements for subcontractors?
What are the legal consequences of false advertising in construction?
What are the rights of a contractor against unpaid contractors?
What is the legal process for contract disputes between parties in the construction industry?
What are the legal remedies for breach of contract claims in construction?

What are the various types of contracts used in the construction industry?

Related FAQs

Related Blog Posts