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.
The Indiana Construction Contract for Home — Fixed Fee or Cost Plus is a legally binding agreement between a homeowner (referred to as the "Owner") and a contractor (referred to as the "Contractor") for the construction or remodeling of a home. This contract outlines the terms and conditions that govern the project and the obligations of both parties involved. There are two main types of construction contracts in Indiana — the Fixed Fee and Cost Plus contracts. 1. Fixed Fee Contract: This type of contract specifies a predetermined total cost for the project. The Contractor agrees to complete all the necessary work outlined in the contract for the agreed-upon fixed fee. In this type of contract, the risk of unforeseen costs or delays lies with the Contractor, as they are responsible for completing the project within the fixed fee. 2. Cost Plus Contract: In a Cost Plus contract, the homeowner agrees to pay the actual cost of the project, including materials and labor, along with an additional markup or fee as specified in the contract. The markup is typically a percentage of the total cost and covers the Contractor's overhead expenses and profit margin. This type of contract is ideal when there are uncertainties regarding the project scope or when the homeowner wants more control over the project. Regardless of the type of contract chosen, the Indiana Construction Contract for Home typically includes the following key elements: 1. Project Description: Detailed description of the work to be performed, including the scope of the project, architectural plans, and any specifications or drawings. 2. Contract Price: Total cost of the project (fixed fee or estimated cost plus markup), as well as payment terms, schedule, and methods. 3. Change Orders: Procedures and requirements for initiating and approving any changes or modifications to the original project scope, price, or timeline. 4. Permits and Approvals: Specifies the responsibility for obtaining necessary permits, inspections, and approvals required by local building authorities. 5. Insurance and Liability: Outlines the insurance coverage required by the Contractor, including general liability, worker's compensation, and property damage coverage. 6. Work Schedule: Specifies the estimated start and completion dates of the project, as well as any penalties for delays. 7. Warranties: Describes any warranties provided by the Contractor for the quality of the work performed or the materials used. 8. Dispute Resolution: Procedures for resolving disputes, including mediation, arbitration, or litigation. 9. Termination: Conditions and procedures for terminating the contract, including any penalties or fees in case of breach or termination. 10. Governing Law: Specifies that the contract shall be governed by the laws of the state of Indiana. It is essential for both homeowners and contractors to carefully review and understand all the terms and conditions mentioned in the Indiana Construction Contract for Home — Fixed Fee or Cost Plus before signing it to ensure a successful and legally compliant construction project.
