The American Institute of Architects series of construction documents and the Consensus Docs construction documents are the two most common standard contract forms for bidding on construction projects.
There are 5 types of Construction Contracts:
- Lump sum contract; the most common construction contract. It’s an agreement on a fixed price for a particular scope of work. No matter how much the work costs the contractor to perform, the customer pays only the fixed-price amount.
- Time and materials contracts; used on projects when the scope of work is not well defined. The contractor charges the customer for the actual cost of materials plus labor at a specified hourly rate.
- Cost plus contracts; also called cost reimbursement contracts, and they stipulate that the contractor will be paid for any costs incurred on the project plus a set amount for profit.
- Unit price contracts; also called measurement contracts, measure and pay contracts, or remeasurement contracts.
- Guaranteed maximum price (GMP) contract; where the contractor provides a cost cap that the project won’t go over.
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