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.
Idaho Construction Contract for Home — Fixed Fee or Cost Plus is a legally binding document that outlines the terms and conditions of a construction project between a homeowner and a contractor in the state of Idaho. This contract specifies the agreed-upon payment method, either a fixed fee or cost-plus structure, for the construction services provided by the contractor. In a fixed fee contract, the homeowner agrees to pay a predetermined amount to the contractor for the completion of the construction project. This fixed fee is typically determined based on factors such as the scope of work, materials required, labor costs, and any additional services requested by the homeowner. This type of contract provides the homeowner with a clear understanding of the total cost of the project upfront, allowing for better budgeting and forecasting. On the other hand, a cost-plus contract involves the homeowner reimbursing the contractor for the actual costs incurred during the construction process. This includes the cost of materials, labor, overhead expenses, and any additional charges agreed upon in the contract. The contractor also receives a predetermined percentage as a fee, typically based on the total cost of the project or a fixed percentage of the costs. Cost-plus contracts provide more flexibility in terms of budget adjustments during construction, as the final cost may vary depending on unforeseen circumstances or changes requested by the homeowner. Both types of contracts typically include a detailed description of the construction project, including plans, specifications, permits, and any other necessary documentation. The contract may also outline a timeline for completion, payment terms, dispute resolution procedures, and any warranties or guarantees provided by the contractor. In Idaho, there may be additional variations or types of construction contracts, such as lump-sum contracts or time and materials contracts. Lump-sum contracts involve a fixed price for the entire project, regardless of the actual expenses incurred by the contractor. Time and materials contracts, meanwhile, involve the homeowner paying for the contractor's actual labor and materials costs, along with an agreed-upon fee or markup. When entering into an Idaho Construction Contract for Home — Fixed Fee or Cost Plus, it is crucial for both parties to carefully review and understand the terms and conditions stated in the agreement. Seeking legal advice or consulting with a construction professional may be beneficial to ensure that the contract is comprehensive, fair, and protects the rights and interests of both the homeowner and the contractor.
