Florida Construction Contract Cost Plus or Fixed Fee
Overview of this form
This Construction Contract allows for a payment arrangement based on either a cost-plus or fixed fee structure. It is specifically designed for use in Florida and establishes key agreements between the homeowner and contractor, such as the scope of work, site details, warranties, and insurance provisions. Unlike other contracts, this form provides flexibility in payment terms based on project costs or a predetermined fee, catering to different project management preferences.
Key parts of this document
- Payment arrangement options: cost-plus or fixed fee.
- Detailed scope of work and work site specifications.
- Warranties and insurance requirements.
- Provisions for permit acquisition and soil condition liabilities.
- Change order procedures for modifying project scope.
- Conditions regarding late payments and project damages.
When to use this document
This Construction Contract is ideal for homeowners planning to undertake a construction project where payment terms need to be flexible. Use this form when hiring a contractor for renovations, new builds, or major repairs, especially when the total project cost is uncertain. It helps to ensure clear agreements regarding financial obligations and project expectations between both parties.
Intended users of this form
- Homeowners engaging a contractor for construction projects.
- Contractors looking for a comprehensive agreement with clients in Florida.
- Individuals seeking clarity on payment structures for their construction work.
- Property owners needing legal protection against contractor disputes.
Completing this form step by step
- Identify the parties involved, including homeowner and contractor details.
- Clearly outline the scope of work and specify the work site address.
- Choose the payment structure: cost-plus or fixed fee, and detail the contract price.
- Include terms related to insurance coverage and warranties.
- Have both parties sign the contract to signify agreement.
Does this form need to be notarized?
Notarization is not commonly needed for this form. However, certain documents or local rules may make it necessary. Our notarization service, powered by Notarize, allows you to finalize it securely online anytime, day or night.
Avoid these common issues
- Failing to clearly define the scope of work, leading to misunderstandings.
- Not addressing soil condition liabilities in the contract terms.
- Neglecting to specify insurance requirements, resulting in potential coverage gaps.
- Omitting signatures, making the contract unenforceable.
Why complete this form online
- Immediate access to a legally vetted contract tailored for Florida.
- Editable format that allows users to customize terms according to project needs.
- Convenience of downloading and printing the form at any time.
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FAQ
A cost-plus contract is an agreement to reimburse a company for expenses incurred plus a specific amount of profit, usually stated as a percentage of the contract's full price.
A Cost-Based Pricing Example Suppose that a company sells a product for $1, and that $1 includes all the costs that go into making and marketing the product. The company may then add a percentage on top of that $1 as the "plus" part of cost-plus pricing. That portion of the price is the company's profit.
Cost Plus Contract Disadvantages For the buyer, the major disadvantage of this type of contract is the risk for paying much more than expected on materials. The contractor also has less incentive to be efficient since they will profit either way.
In the cost plus a percentage arrangement, the contractor bills the client for his direct costs for labor, materials, and subs, plus a percentage to cover his overhead and profit. Markups might range anywhere from 10% to 25%.
A cost plus percentage of cost contract or CPPC is a cost reimbursement contract containing some element that obligates the non-state entity to pay the contractor an amount, undetermined at the time the contract was made and to be incurred in the future, based on a percentage of future costs.
Determine your COGS (cost of goods sold). For example $40 . Find out your gross profit by subtracting the cost from the revenue. Divide profit by COGS. Express it as a percentage: 0.25 100 = 25% . This is how to find markup... or simply use our markup calculator!
Cost-plus-fixed-fee tends to me more advantageous to the buyer as opposed to the seller as it caps the fee and the fee will not swell or grow based on the future expansion or fluctuations of the budget. However, it also can protect the seller because, in the event the budget tightens, it provides a fixed fee.
A cost-plus contract, also known as a cost-reimbursement contract, is a form of contract wherein the contractor is paid for all of their construction-related expenses. Plus, the contractor is paid a specific agreed-upon amount for profit.
