A building and construction contract must fulfill the same requirements as any other type of contract in regard to the following necessary elements:
" an agreement;
" between competent parties;
" based upon the genuine assent of the parties;
" supported by consideration;
" made for a lawful objective; and
" and in the form required by law.
Such a contract generally provides not only for the construction of the project, but also for many matters that are incidental to the project. Thus, it may provide for the carrying of liability, workers' compensation, and fire insurance policies, designating which party is responsible for obtaining particular insurance. A building and construction contract will typically specify the duties, responsibilities, and liabilities of each of the parties, as well as those of any employed architect or engineer. The amount and method of compensation is, of course, an important part of such a contract.
Title: Understanding the New Mexico Basic Building and Construction Contract between Owner and Contractor Keywords: New Mexico, Basic Building and Construction Contract, Owner, Contractor, types Introduction: The New Mexico Basic Building and Construction Contract between Owner and Contractor is a legally binding agreement that outlines the rights, responsibilities, and obligations of both parties involved in a construction project. This contract serves as a crucial tool in ensuring a smooth and successful project completion. In New Mexico, there are different types of contracts available for owners and contractors to choose from, depending on their specific needs and project requirements. 1. Lump Sum Contract: The Lump Sum Contract is one of the most common types used in New Mexico. It specifies a fixed price for the entire project, which the contractor agrees to complete without exceeding the agreed-upon cost. This contract shift most of the financial risks to the contractor, as any cost overruns are their responsibility. 2. Cost-Plus Contract: The Cost-Plus Contract allows for reimbursement of the contractor's actual costs incurred during the construction process, including labor, materials, and overhead expenses. In addition to the actual costs, the contractor receives a predetermined percentage or fixed fee as compensation for their services. This type of contract provides more flexibility, but the owner bears the risk of cost overruns. 3. Time and Materials Contract: The Time and Materials Contract is commonly used when the scope of work and its duration are uncertain. The owner agrees to pay the contractor based on the actual time spent on the project and the cost of materials used. This type of contract provides more flexibility but can be challenging to control costs, as the contractor's incentive may be towards maximizing billable hours. 4. Unit Price Contract: The Unit Price Contract involves pricing construction items on a unit basis. The contract defines the specific quantities of individual items involved in the project and their corresponding unit prices. This type of contract is suitable when the project involves repetitive or standardized work, and it simplifies cost calculations. Conclusion: Understanding the various types of New Mexico Basic Building and Construction Contracts between Owner and Contractor is essential to ensure that construction projects proceed smoothly, within budget, and according to the agreed-upon specifications. It is crucial for parties involved to carefully review, negotiate, and select the most appropriate type of contract for their specific needs, considering factors such as cost predictability, project complexity, and scope clarity. Complying with the chosen contract's terms and conditions is paramount to maintain a transparent and cooperative relationship between owners and contractors.
