Scribd Logo
Upload

Welcome to Scribd!

  • 94 views

    Construction Contract

    Uploaded by

    Alexandra Lorenzo
    A construction contract is a legally binding agreement between a property owner and contractor that outlines the scope of work, risks, duties, and legal rights of both parties. There are different types of construction contracts, including unit pricing contracts where the final price depends on the actual quantities used and lump sum contracts where the contractor agrees to complete the work for a fixed total price. Unit pricing contracts allow for flexibility in quantities but the total cost is unknown until completion, while lump sum contracts require accurate estimation but provide a set payment amount. Construction contracts help define the roles and responsibilities of those involved in building projects.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Construction Contract

    Uploaded by

    Alexandra Lorenzo
    94 views1 page
    A construction contract is a legally binding agreement between a property owner and contractor that outlines the scope of work, risks, duties, and legal rights of both parties. There are different types of construction contracts, including unit pricing contracts where the final price depends on the actual quantities used and lump sum contracts where the contractor agrees to complete the work for a fixed total price. Unit pricing contracts allow for flexibility in quantities but the total cost is unknown until completion, while lump sum contracts require accurate estimation but provide a set payment amount. Construction contracts help define the roles and responsibilities of those involved in building projects.

    Original Title

    Construction contract

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    A construction contract is a legally binding agreement between a property owner and contractor that outlines the scope of work, risks, duties, and legal rights of both parties. There are different types of construction contracts, including unit pricing contracts where the final price depends on the actual quantities used and lump sum contracts where the contractor agrees to complete the work for a fixed total price. Unit pricing contracts allow for flexibility in quantities but the total cost is unknown until completion, while lump sum contracts require accurate estimation but provide a set payment amount. Construction contracts help define the roles and responsibilities of those involved in building projects.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    94 views1 page

    Construction Contract

    Uploaded by

    Alexandra Lorenzo
    A construction contract is a legally binding agreement between a property owner and contractor that outlines the scope of work, risks, duties, and legal rights of both parties. There are different types of construction contracts, including unit pricing contracts where the final price depends on the actual quantities used and lump sum contracts where the contractor agrees to complete the work for a fixed total price. Unit pricing contracts allow for flexibility in quantities but the total cost is unknown until completion, while lump sum contracts require accurate estimation but provide a set payment amount. Construction contracts help define the roles and responsibilities of those involved in building projects.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 1

    Construction contract

    A construction contract is a mutual or legally binding agreement between two parties based on policies
    and conditions recorded in document form. The two parties involved are one or more property owners
    and one or more contractors. The owner, often referred to as the 'employer' or the 'client'. The owner
    has the freedom to choose whichever contract is felt suitable for a specific project keeping in mind the
    specifications and regulations involved. Apart from this, any type of work is mainly transferred via the
    site engineer to the owner as the site engineer has the ability to make the points clear to the owner
    which the contractors may lack. A construction contract is an important document as it outlines the
    scope of work, risks, duties and legal rights of both the contractor and the owner.

    TYPES OF CONTRACT

    There are different types of contracts which vary in terms of cost, time of completion, suitability, etc.
    They are –

    1. Unit pricing contract – This type of contract is used mostly by builders and engineers. Here, bidding is
    facilitated in a written form without informing the scope of work. Moreover, the work is based on rates
    and the final price is dependent on the total quantity of contracted parts that are necessary for the
    project. Contractor has the freedom to give the cost per unit item while the quantity of items is given by
    the owner.

    Its disadvantage is that the total cost will only be known after the finishing of the project as it is based
    on the actual work done and not on theoretical ground. In addition to this, if the quantity is increased,
    then the cost shall also increase, hence it is difficult to ascertain the scope of work.

    2. Lump sum contract – Here the contractor commits to execute the work as per drawings and
    specifications for a lump sum amount of money. There will be no unit cost system and so the estimation
    for the whole work is somewhat difficult. An experience is required for the contractors to accurately
    estimate the amount of money that will be involved and so amateur contractors are not preferred for
    this type of contract. However, in bigger projects, payments can be made partially on mutually agreed
    terms.

    You might also like