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 without contract is a payment arrangement often used in the construction industry, where the contractor is reimbursed for the actual costs incurred during the project, in addition to a predetermined percentage or fee. This form of construction agreement does not involve a fixed contract sum but rather allows for flexibility in managing unexpected costs and changes throughout the construction process. Keywords: construction, cost plus, without contract, payment arrangement, reimbursement, actual costs, predetermined percentage, fee, flexibility, unexpected costs, changes, construction process. There are two main types of cost plus construction without contract: 1. Cost plus percentage fee: Under this type of cost plus construction, the contractor is entitled to a predetermined percentage fee in addition to the actual costs incurred. For example, if the project costs $100,000 and the agreed-upon percentage fee is 10%, the total payment to the contractor would be $100,000 + ($100,000 x 10% = $10,000) = $110,000. This payment structure incentivizes the contractor to keep costs low while still being compensated for their services. 2. Cost plus fixed fee: In this variation of cost plus construction, the contractor receives a fixed fee instead of a percentage fee. The fixed fee is predetermined and agreed upon before the project commences, regardless of the actual costs incurred. For instance, if the agreed fixed fee is $20,000, the total payment to the contractor would be $100,000 (actual costs) + $20,000 (fixed fee) = $120,000. This type of arrangement offers more certainty for cost planning. In both types of cost plus construction without contract, the contractor is responsible for providing detailed invoices and supporting documentation to justify the actual costs incurred. This transparency helps ensure that the client only pays for legitimate expenses. Additionally, since there is no fixed contract sum, clients should closely monitor project progress and costs to avoid any misuse or overspending. Overall, cost plus construction without contract is a flexible payment arrangement that allows for more fluidity in managing project costs while providing adequate compensation for the contractor's services. It is essential for both parties to have a clear understanding of the payment structure and establish effective communication channels throughout the construction process to ensure transparency and successful project completion.
