Illinois Construction Contract Cost Plus or Fixed Fee
About this form
The Construction Contract Cost Plus or Fixed Fee is a legal document that outlines an agreement between a property owner and a contractor. This form can be used for construction projects where payment may be based on either the actual costs incurred plus a fee (cost plus) or a predetermined fixed fee. It ensures that both parties understand their responsibilities, including scope of work, insurance requirements, and payment terms, and complies with Illinois state laws.
Main sections of this form
- Work Site: Specifies the location of the construction project.
- Permits: Details the contractor's obligation to secure necessary permits.
- Insurance: Outlines the types of insurance the contractor must maintain.
- Change Orders: Describes how changes to the scope of work are managed and compensated.
- Warranty: Details the warranty's limitations concerning workmanship and materials.
- Termination: Explains the conditions under which the contract can be terminated due to damage or destruction of the project.
- Attorneys' Fees: States that the prevailing party may recover legal fees in case of a dispute.
When to use this form
This form is needed when entering into a construction agreement for projects where costs may vary significantly, such as custom home builds or major renovations. It is particularly useful when the project scope may change, and it is crucial to clearly define responsibilities and payment terms to avoid disputes later on. If you prefer flexibility in payment arrangements based on actual expenses, this form suits your needs.
Who should use this form
This form is intended for:
- Property owners who need to hire a contractor for construction or renovation projects.
- Contractors seeking a structured agreement for cost-plus or fixed-fee contracts.
- Individuals or businesses involved in construction projects in Illinois.
Steps to complete this form
- Identify the parties: Fill in the full names and addresses of the property owner and contractor.
- Specify the property: Enter the location of the work site to clarify where the construction will take place.
- Detail project scope: Clearly outline the scope of work, including any specific materials or labor required.
- Attach permits and approvals: Ensure permits are listed as part of the project costs as required by local regulations.
- Enter dates and signatures: Complete the contract by entering the effective date and have both parties sign.
Does this form need to be notarized?
This form does not typically require notarization unless specified by local law. However, it is advisable to check local regulations or consult with a legal professional to ensure compliance.
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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.
Common mistakes to avoid
- Failing to specify the scope of work clearly, leading to disputes later.
- Not including all necessary permits or regulatory approvals in the initial contract.
- Neglecting to document change orders properly, which can lead to unexpected costs.
Why use this form online
- Convenience: Download and complete the form at your own pace from anywhere.
- Editability: Customize the template to suit specific project needs easily.
- Reliability: Forms are drafted by licensed attorneys, ensuring legal compliance and clarity.
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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.
