This form is a Construction Contract. The form contains the following subjects: scope of work, work site, and insurance. The contractor's warranty is limited to defects in workmanship within the scope of the work performed by the contractor.
What is a Construction contract agreement?
If you’re planning to build, renovate or reconstruct your house, you will need to enter into a contract for home construction with the building contractor, defining your mutual rights and responsibilities. This agreement contains project specifics, the contractor’s license and insurance details, the requested scope of work, etc. It may also determine the potential lien on the property should the work not be paid in full.
Types of construction contracts
Depending on the payment arrangements determined by parties, there are four basic types of home builders’ contracts:
1. Fixed price (or lump-sum) agreements set the price for the completed job right from the start. Although fixed, the document may also include provisions defining penalties (for example, if the constructor fails to finish the work on schedule).
2. Cost plus construction agreements set the price for the finished work based on building materials and labor with additionally mentioned “plus” (a percentage of the total costs or a fixed fee).
3. Time and material agreements set the price for the work without a “plus,” but the client pays the contractor a daily or hourly rate while they are under contract.
4. Unit-price agreements are standard in bidding, particularly for federal building projects. Both owner and contractor define the price that the contractor charges for a standard unit without any specific extra fees for other units.
The first two types of contract for home construction mentioned are the most popular ones. Let’s take a closer look at them.
Fixed price vs. cost-plus contract benefits
The fixed price agreement benefits owners more than builders, as it determines at the moment the parties seal the deal the exact price the contractor will get after they complete all the work. Builders risk not getting the estimated profits they initially anticipated, as expenses may increase significantly but remain the constructor’s responsibility.
The cost-plus construction deal contains the evaluation of the final project cost; however, it doesn’t determine the final contract price until the contractor completes all the work. Unlike the fixed-price agreement, it separates expenses and sets the profit rate (as a percentage of the final project cost or as a flat amount), so contractors prefer this type of agreement; it is riskier for homeowners.
Information you should provide in the construction contract agreement
The presented Construction Contract for Home is a universal multi-state construction contract template. This sample describes typical terms for a home building contract. Download a printable document version from our website or amend and fill it out online. Make sure to provide the following information:
• Name and contact details of the contractor and their license number;
• Name and contact details of the homeowner;
• Property legal description from county clerk’s records;
• Project description with blueprints and building specifications;
• Scope, description of work, and its estimated final dates;
• Costs of work and responsibilities of parties for any breach of contract.
A Guam Construction Contract for Home refers to a legally binding agreement between a homeowner and a construction contractor in Guam. This contract outlines the terms and conditions for the construction or renovation project, including the scope of work, payment method, duration, and other relevant details. There are two main types of Guam Construction Contract for Home: Fixed Fee and Cost Plus contracts. 1. Fixed Fee Contract: This contract involves the contractor agreeing to complete the project for a predetermined fixed fee. The total cost is agreed upon before the project begins, and any changes or additional work requested by the homeowner may incur extra charges. The contractor assumes the risk of any cost overruns, ensuring that the homeowner pays only the agreed-upon price. Keywords: Guam Construction Contract, Fixed Fee, predetermined cost, changes, additional work, cost overruns, predetermined price. 2. Cost Plus Contract: In this type of contract, the contractor is reimbursed for the actual costs incurred during the construction project, along with an agreed-upon percentage or fee for their services. The homeowner typically pays for the costs of materials, labor, subcontractors, and overhead expenses, and the contractor provides detailed records of all expenses. This type of contract offers more flexibility in terms of modifications or changes during the project but may carry a higher degree of financial risk for the homeowner. Keywords: Guam Construction Contract, Cost Plus, reimbursement, actual costs, agreed-upon percentage, materials, labor, subcontractors, overhead expenses, modifications, financial risk. It is important to note that within each of these types of contracts, there may be variations and specific clauses that can be customized based on the specific needs and requirements of the construction project. These additional clauses may include provisions for warranties, dispute resolution, termination, insurance, and other relevant aspects. Keywords: Guam Construction Contract, variations, specific clauses, customized, specific needs, requirements, warranties, dispute resolution, termination, insurance. To ensure a valid and enforceable contract, both parties must carefully review and negotiate the terms before signing the agreement. It is also advisable to seek legal advice from professionals familiar with construction contracts in Guam to ensure compliance with local laws and regulations. Keywords: valid, enforceable contract, review, negotiate, signing agreement, legal advice, professionals, compliance, local laws, regulations.
