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WA HBCA Lump Sum Building Contract OWNERS: JOB: SITE:Leo & Wendy BURKE A1021 Lot 418, No 21 King Street KENSINGTON WA 6151To verify your builder is a HIA member call 1902 973 555 HIA Contracts.

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Lump sum contract advantages include: No unforeseen costs for the owners. Simple cash flow management. Opportunity for a larger profit margin for contractors. Easy access to financing.

Disadvantages of a Lump Sum Construction Contract A lump sum agreement presents a higher risk to a contractor. Measuring the number of changes is difficult. Such contracts require paperwork and records of change orders from each phase, and this means further documentation is needed.

Lump Sum. A lump sum contract is where the contractor performs an agreed scope of works for an agreed lump sum price. That is, a fixed amount. A lump sum contract may be appropriate where the design of the construction project has enough detail to allow the contractor to propose an appropriate lump sum price.

A remeasurement contract is where the work is measured and valued against agreed rates. There is therefore no agreement as to a lump sum, but there is agreement as to the basis upon which the work will be valued.

Contractors will carry much of the risk with a lump sum contract. With the exception of owner-initiated changes, if there are any cost overruns outside of the agreed fixed price, the contractor is responsible for those costs.

In a lump sum contract, the owner has essentially assigned all the risk to the contractor, who in turn can be expected to ask for a higher markup in order to take care of unforeseen contingencies.

Lump Sum Contract Pros & Cons Simplicity. Lump sum contracts are the simplest form of construction contract. ... Profitability. ... Financing is easier. ... Paperwork is straightforward. ... Cash flow is easier to manage. ... High contractor risk. ... Potentially more expensive. ... Projects can't be fluid.

A lump sum contract in construction is one type of construction contract, sometimes referred to as stipulated-sum, where a single price is quoted for an entire project based on plans and specifications and covers the entire project and the owner knows exactly how much the work will cost in advance.

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© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232
Form Packages
Adoption
Bankruptcy
Contractors
Divorce
Home Sales
Employment
Identity Theft
Incorporation
Landlord Tenant
Living Trust
Name Change
Personal Planning
Small Business
Wills & Estates
Packages A-Z
Form Categories
Affidavits
Bankruptcy
Bill of Sale
Corporate - LLC
Divorce
Employment
Identity Theft
Internet Technology
Landlord Tenant
Living Wills
Name Change
Power of Attorney
Real Estate
Small Estates
Wills
All Forms
Forms A-Z
Form Library
Customer Service
Terms of Service
DMCA Policy
About Us
Blog
Affiliates
Contact Us
Privacy Notice
Delete My Account
Site Map
All Forms
Search all Forms
Industries
Forms in Spanish
Localized Forms
Legal Guides
Real Estate Handbook
All Guides
Prepared for You
Notarize
Incorporation services
Our Customers
For Consumers
For Small Business
For Attorneys
Our Sites
US Legal Forms
USLegal
FormsPass
pdfFiller
signNow
airSlate workflows
DocHub
Instapage
Social Media
Call us now toll free:
1-877-389-0141
As seen in:
  • USA Today logo picture
  • CBC News logo picture
  • LA Times logo picture
  • The Washington Post logo picture
  • AP logo picture
  • Forbes logo picture
© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232