Free Cost Plus Construction Contract Template
COST PLUS CONSTRUCTION CONTRACT
This construction contract ("Contract") is entered into this day of [Effective Date] by and between [Your Company Name], of [Your Company Address], [Your Company Number] ("Party A" or "Owner") and [Party B's Name], of [Party B's Address], [Party B's Number] ("Party B" or "Contractor").
1. TERMS AND CONDITIONS
Party A is a property owner and Party B is a construction contractor. Party B agrees to provide all tools, labor, materials, and other services necessary to complete the construction under the provisions of this Contract.
2. SCOPE OF WORK
Party B, as the contractor, undertakes to execute all construction activities outlined in this Contract, including but not limited to procurement of materials, deployment of labor, and adherence to agreed-upon timelines. Party A, as the property owner, agrees to provide necessary access to the construction site and ensure compliance with local regulations.
3. COMPENSATION
Party B will be reimbursed by Party A for direct construction costs, both for labor and materials and management overhead, plus a profit calculated as a percentage of the total actual cost incurred. The actual cost and the percentage of profit will be mutually decided and documented before the commencement of any work.
4. PAYMENT TERMS
Party A agrees to compensate Party B for completed work according to the terms specified in this Contract. Payment shall be made in installments based on mutually agreed milestones, with final payment contingent upon satisfactory completion of the construction project and any post-construction inspections.
5. COMMENCEMENT AND COMPLETION
5.1 Commencement of Work: The Contractor shall commence work upon receipt of a Notice to Proceed from the Owner. The Notice to Proceed shall be issued within 30 days from the Effective Date of this Contract.
5.2 Completion Date: The Contractor agrees to complete all work under this Contract within 180 days from the Commencement Date unless extended by mutual agreement between the Owner and the Contractor in writing.
5.3 Progress Reports: The Contractor shall provide the Owner with progress reports monthly, detailing the status of the work and any anticipated delays or changes to the Completion Date.
5.4 Extension of Time: The Completion Date may be extended due to delays caused by unforeseen circumstances, changes in the scope of work, or other reasons beyond the Contractor's control. Any request for an extension of time must be submitted in writing to the Owner, detailing the reasons for the delay and the proposed revised Completion Date.
5.5 Liquidated Damages: In the event the Contractor fails to complete the work within the agreed-upon timeframe, the Contractor shall pay liquidated damages to the Owner of $500 per day for each day beyond the Completion Date, as outlined in the Contract.
5.6 Substantial Completion: The work shall be deemed substantially complete when the Contractor has finished all major components of the project, as determined by the Owner. Upon substantial completion, the Owner shall have access to the premises for inspection and any necessary corrective work.
5.7 Final Completion: Completion shall occur when all work outlined in the Contract, including any punch list items, has been completed to the satisfaction of the Owner and all required permits, certificates, and warranties have been obtained and delivered to the Owner.
5.8 Acceptance: The Owner shall have 14 days from the date of Final Completion to inspect the work and notify the Contractor of any deficiencies. Upon acceptance of the work by the Owner, the Contractor shall receive final payment as outlined in the Contract.
6. OTHER PROVISIONS
Other special provisions if any, consistent with the terms of this Contract, are to be mentioned here.
6.1 Additional Terms: This section outlines any supplementary Contract or conditions that are not explicitly addressed in the main body of the Contract but are still pertinent to the overall understanding and execution of the contract.
6.2 Modifications and Amendments: Any proposed changes or modifications to the agreement, beyond what is stated here, must be formally documented and agreed upon by all relevant parties under the procedures outlined in this subsection.
6.3 Governing Law: This subsection specifies the jurisdiction and legal framework under which the agreement is governed, ensuring clarity on the applicable laws and regulations that govern the interpretation and enforcement of the contract.
6.4 Severability: If any provision of this agreement is deemed invalid or unenforceable by a court of law, the remaining provisions shall remain in full force and effect, ensuring that the overall intent and purpose of the agreement are preserved to the extent possible.
6.5 Entire Contract: This subsection confirms that the Contract constitutes the entire understanding between the parties involved and supersedes any prior agreements, negotiations, or representations, providing clarity and certainty regarding the scope and extent of the contractual relationship.
7. BINDING EFFECT AND GOVERNING LAW
This Contract shall be binding, and the benefits shall inure, to the Parties hereto, their respective heirs, legal representatives, successors, and assigns. The laws of the state of [JURISDICTION] shall govern this Contract.
8. AMENDMENTS
An amendment to or modification of this Contract will not be considered as valid or effectual unless it is expressed in a written form and bears the signatures of both Parties involved in this Contract.
9. TERMINATION
In the event of a breach of contract or failure to meet agreed-upon obligations, either Party A or Party B reserves the right to terminate this Contract with written notice. Upon termination, both parties shall settle any outstanding payments or liabilities under the terms outlined herein.
IN WITNESS WHEREOF, this Contract has been executed on the day and year first above written.
[OWNER'S NAME]
[DATE SIGNED]
[CONTRACTOR'S NAME]
[DATE SIGNED]
