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 North Dakota Construction Contract for a Home refers to a legally binding agreement between a homeowner (referred to as the "Owner") and a construction contractor (referred to as the "Contractor"), which outlines the terms and conditions for the construction or renovation of a residential property in the state of North Dakota. The contract specifies the type of fee structure that will be used for the project, either a Fixed Fee or Cost Plus. In a Fixed Fee contract, the Contractor agrees to complete the construction project for a predetermined, fixed amount, which is agreed upon by both parties prior to commencing the work. This type of contract provides homeowners with a clearer understanding of the overall cost of the project, as they only have to pay the agreed-upon fee, regardless of any unexpected additional expenses that may arise during construction. On the other hand, a Cost Plus contract, also known as a Cost Reimbursement contract, determines the expenses based on the actual costs incurred by the Contractor, including labor, materials, and overhead, and adds a predetermined percentage or fixed fee on top as profit for the Contractor. This type of contract allows for more flexibility, as it enables the homeowner to have more involvement in decision-making throughout the construction process and allows for potential changes to the project scope. Both types of contracts have their advantages and disadvantages and should be carefully considered by the homeowner before signing. Fixed Fee contracts provide budget certainty, while Cost Plus contracts allow for more customization and adaptability during the construction process. It is worth noting that within the North Dakota Construction Contract for a Home, there could be additional clauses or specifications that cater to specific requirements or circumstances. These may include provisions for project completion deadlines, payment schedules, dispute resolution mechanisms, and change order procedures. The contract may also include details about the quality standards the Contractor must adhere to, insurance requirements, and licensing and permit obligations. In summary, a North Dakota Construction Contract for a Home — Fixed Fee or Cost Plus provides a legally binding agreement between a homeowner and a construction contractor, outlining the terms and conditions for the construction or renovation of a residential property. It specifies the chosen fee structure, either a Fixed Fee or Cost Plus, and may include additional clauses and provisions to address specific project requirements.
