Illinois Construction Contract Cost Plus or Fixed Fee
What is this form?
The Construction Contract Cost Plus or Fixed Fee is a legal document that outlines the agreement between a property owner and a contractor for construction projects. This form includes provisions for payment arrangements based on either the actual cost of construction plus a fee or a fixed fee, depending on the agreement reached. It's essential to use this specific contract to define project terms clearly, ensuring that both parties understand their obligations and the scope of work, while also complying with Illinois law.
Main sections of this form
- Scope of work detailing the project requirements and specifications
- Work site location and conditions related to soil and permits
- Insurance requirements for general liability and workers' compensation
- Change order process for adjustments to the project scope
- Late payment and default provisions outlining consequences for non-payment
- A warranty covering defects in workmanship for one year from completion
When this form is needed
This form should be utilized when entering into a construction agreement where the payment structure is either based on actual costs plus a contractor fee or a fixed contract price. It is suitable for residential or commercial construction projects in Illinois, where clear terms and conditions are necessary to minimize disputes and ensure compliance with local regulations.
Who this form is for
- Property owners planning to undertake construction projects
- Contractors seeking a formal agreement with clients
- Developers managing multiple construction projects
Instructions for completing this form
- Identify the parties involved: specify the owner and contractor details.
- Describe the work: outline the scope and specifications of the project.
- Specify the work site: include the physical address of the construction location.
- Enter the terms: clarify whether the payment arrangement is cost plus or a fixed fee.
- Include signatures from both parties to validate the contract.
Is notarization required?
This form does not typically require notarization unless specified by local law.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Typical mistakes to avoid
- Failing to clearly define the scope of work, leading to misunderstandings.
- Neglecting to obtain necessary permits before starting the project.
- Not documenting changes to the scope of work properly through change orders.
Advantages of online completion
- Quick and easy download for immediate use in your construction project.
- Editable to customize terms based on specific project needs.
- Reliable legal protection backed by licensed attorneys.
Legal use & context
- This contract provides clear guidelines for project execution, reducing potential disputes.
- Enforceable in the State of Illinois, subject to local construction laws.
- Includes terms that protect both contractor and owner in case of changes or disputes.
Main things to remember
- Use this form to clearly outline the terms of your construction project.
- Ensure you understand the payment structure before signing.
- Document all changes to the project scope to avoid disputes.
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FAQ
A fixed-price contract is a type of contract where the payment amount does not depend on resources used or time expended. This is opposed to a cost-plus contract, which is intended to cover the costs with additional profit made.
A fixed price contract sets a total price for all construction-related activities during a project. Many fixed price contracts include benefits for early termination and penalties for a late termination to give the contractors incentives to ensure the project is completed on time and within scope.
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.
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 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.
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.
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.
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.
