This form is a Construction Contract that may be executed with either a cost plus or fixed fee payment arrangement. The form contains the following additional subject matters and complies with the laws of the State of Florida: scope of work, work site, warranty and insurance.
Cost plus construction with maximum is a type of contract commonly used in the construction industry. Under this arrangement, the client agrees to pay for the actual cost of the project, including all materials, labor, and overhead, plus an additional fee or profit margin, up to a predetermined maximum limit. This method provides transparency to both the client and the contractor, ensuring that the project is completed within budget while allowing for any unforeseen expenses that may arise during construction. One of the main advantages of cost plus construction with maximum is that it provides a flexible and collaborative approach to the construction process. This type of contract enables the client to actively participate in decision-making, allowing for changes and customization as the project progresses. By having a predefined maximum limit, the client has a clear understanding of the potential costs, helping them to make informed decisions regarding project modifications. There are different types of cost plus construction with maximum contracts, depending on the terms and conditions agreed upon between the client and the contractor. Some common variations of this contract include: 1. Guaranteed Maximum Price (GMP): This type of cost plus construction comes with a guaranteed maximum limit that the contractor will not exceed. If the actual cost of the project is lower than the maximum limit, the client benefits from the savings. However, any cost overruns are absorbed by the contractor. 2. Cost Plus Percentage Fee: In this arrangement, the contractor charges a percentage fee on top of the actual project cost. The fee is often fixed, allowing for predictable profit margins. However, this type of contract may encourage the contractor to increase costs to maximize their fees, potentially affecting project efficiency. 3. Cost Plus Fixed Fee: Here, the contractor charges a fixed fee instead of a percentage fee. This type of contract provides more clarity for the client in terms of profit margins and can be beneficial when client involvement and decision-making are expected throughout the process. In summary, cost plus construction with maximum is a construction contract that allows the client to pay for the actual cost of the project, plus a predetermined fee, up to a predefined maximum limit. This approach promotes transparency and collaboration, enabling clients to make informed decisions and customize their projects as they progress. Different variations of this contract, such as Guaranteed Maximum Price, Cost Plus Percentage Fee, and Cost Plus Fixed Fee, offer flexibility and choices to both clients and contractors.
