Cost Plus Contract Meaning With Example In Kings
Category:
State:
Multi-State
County:
Kings
Control #:
US-00462
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Word;
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Description
A Cost Plus Contract is a type of construction contract where the owner agrees to pay the contractor for the actual costs of materials plus an additional fee. This contract allows for flexibility in project costs, as it accommodates unforeseen expenses that may arise during construction. For example, in Kings, if the actual costs of materials reach $50,000 and the agreed fee is $10,000, the total payment to the contractor would be $60,000. Key features of this contract include clearly defined scope of work, responsibilities for permits, and provisions for changes through written change orders. Filling out the contract requires accurate details regarding the project, including work site location, insurance obligations, and conditions regarding late payments. This type of contract is particularly beneficial for contractors and owners who want to manage variable expenses effectively. Attorneys, partners, and legal professionals will find this document useful for ensuring legal compliance and protecting their client's interests. Paralegals and legal assistants can aid in preparation and review, ensuring all necessary details are captured to facilitate smooth contract execution.
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FAQ
Examples of Contract Costing A bridge is needed over a river at a particular site, and a client gives a contractor this assignment. A contractor opens separate accounts for each contract and numbers them separately to identify any profit or loss made at each contract.
Examples: Direct Labor Costs: Wages of employees working directly on the contract. Direct Materials: Supplies used specifically for the contract. Allocated Costs: Costs of contract management, supervision, and depreciation of equipment used for the contract.
