Cost Plus Contract In Simple Words In Collin
Category:
State:
Multi-State
County:
Collin
Control #:
US-00462
Format:
Word;
Rich Text
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Description
A Cost Plus Contract is an agreement where the Owner pays the Contractor for actual construction costs along with a predetermined fee. This contract is useful for projects where costs are uncertain and provides flexibility in scope changes. The Contractor is responsible for delivering all labor and materials as detailed in the project specifications, while the Owner supplies the project location and necessary permits. The contract includes provisions for additional costs due to unforeseen soil conditions, changes in project scope, and outlines late payment terms. Additionally, the Contractor must maintain adequate insurance coverage. This contract is beneficial for attorneys, partners, owners, associates, paralegals, and legal assistants as it clearly delineates responsibilities, payment structures, and procedures for modifications, ensuring legal protection and clarity in the construction process.
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FAQ
Job costing is used for short-term, smaller-scale projects with distinct costs for each job, common in manufacturing or services. In contrast, contract costing is for larger, long-term projects, like construction or civil engineering, where costs are tracked over the life of an extensive contract.
Contract costing, also known as Terminal costing, is a form of specific order costing which applies where work is undertaken to customer's special requirements and each order is of long duration. It is a variant of job costing as each contract is nothing but a job completed.
