Cost Plus Contract Meaning With Example In San Diego

• Category: Construction - Contractors
• State: Multi-State
• County: San Diego
• Control #: US-00462
• Format: Word; Rich Text

Description

A Cost Plus Contract is an agreement where the Owner pays the Contractor for the actual costs incurred, plus a fee for the Contractor's services. For example, in San Diego, if a Contractor spends $200,000 on materials and labor for a home, the Owner might pay an additional $50,000 as a fee, totaling $250,000. This type of contract is beneficial when project costs are uncertain, allowing flexibility for adjustments. Key features include defining the scope of work, permitting processes, and protocols for changes via written Change Orders. Users should first complete the relevant sections regarding scope, costs, and payment terms. Attorneys, partners, owners, associates, paralegals, and legal assistants will find this form useful for ensuring accountability and clarity in construction contracts, as it also delineates responsibilities and warranties. It is also essential for managing unforeseen expenses that may arise during the construction process.