Cost Plus Contract Meaning With Example In Wayne
Category:
State:
Multi-State
County:
Wayne
Control #:
US-00462
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Word;
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Description
A cost plus contract is an agreement where the owner agrees to pay the contractor for actual construction costs, plus an additional sum for their services. In Wayne, this type of contract means that if the project's costs exceed initial estimates due to unanticipated expenses, the owner is still responsible for these additional costs. For example, if a contractor incurs unexpected costs for materials, the owner will cover these added expenses. Key features of this construction contract include a clearly defined scope of work, obligations for obtaining necessary permits, and provisions concerning soil conditions at the work site. The contractor holds responsibility for maintaining insurance and will require a boundary survey prior to starting work. This contract also enables owners to make changes during construction through written change orders, which may affect the overall project cost. The cost plus structure benefits attorneys, partners, owners, associates, paralegals, and legal assistants by providing flexibility in project budgeting and adapting to changes, while ensuring clear financial accountability and risk management throughout the construction process.
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FAQ
As a general rule, if the owner hired whoever drafted the construction plans, or if whoever drafted the faulty plans is an employee or agent of the owner, it is the owner who will be liable for defective plans.
