(Video) Construction Contract – EXPLAINED.How to Start a Construction Project (6 steps).If the client is seeking to have the contract set up in a per square foot ($/SF) or another unit of measurement. The contractor makes a profit by charging the client more than what they pay their staff. The client pays the contractor for materials and labor at a negotiated rate. The client may also add a clause stating the total construction costs may not breach a specific amount. The contractor will profit by being paid a percentage of the total costs or a fixed fee. The client agrees to pay “at cost” for the contractor’s materials, labor, and any other expenses. This is a lump sum that covers all materials and labor. 4 Types of Construction ContractsĪ price is given for the services provided. ![]() If there are any work orders or plans they should be attached in addition to any permits acquired from the local government to begin work. The agreement will detail the general contractor’s scope of work including, payment, and rights to subcontract any of the tasks involved in completing the construction.Īll details of the work should be included in the contractor’s agreement. A construction contract is used by a client seeking to build or remodel a property with the hired help of a general contractor.
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