Time and Material Building and Construction Contract (Owner to Supply Materials)
About this form
The Time and Material Building and Construction Contract (Owner to Supply Materials) is a legal agreement used in construction projects. This contract outlines the terms under which a contractor will perform work while the owner supplies the necessary materials. Unlike fixed-price contracts, this agreement allows the owner to pay based on actual costs incurred for labor and materials, making it flexible for projects with variable scopes. It provides clear expectations and obligations for both parties involved in the building process.
Key components of this form
- Agreement details including names, addresses, and effective date.
- Description of the work to be completed along with the specific location.
- Contract price structure based on hourly labor costs and provisions for progress payments.
- Timelines for project start and completion dates.
- Responsibilities and obligations of both the owner and contractor.
- Insurance requirements and safety responsibilities.
When to use this document
This form should be used when an owner wants to enter into a construction contract with a contractor while supplying the materials for the project. It is particularly useful in scenarios where the scope of work may change, making it difficult to estimate a fixed price. The time and material approach protects the owner from unforeseen costs while ensuring that the contractor is fairly compensated for their efforts. This contract is applicable in residential, commercial, and industrial projects.
Who should use this form
This form is suitable for:
- Homeowners looking to renovate or build while managing material costs directly.
- Contractors who want to establish clear payment structures based on actual work done.
- Project managers overseeing construction projects that require flexibility in scope and cost.
- Property developers coordinating multiple contractors and subcontractors.
How to prepare this document
- Identify the parties involved: Include the names and addresses of both the owner and the contractor.
- Describe the work: Clearly specify the work to be done and its location.
- Enter payment details: Specify the hourly rate for labor and outline how progress payments will be made.
- Set timelines: Indicate the start and completion dates for the project.
- Review responsibilities: Ensure both parties understand their obligations regarding inspections, permits, and payment schedules.
- Sign and date the contract: Both the owner and contractor should sign to make the agreement legally binding.
Notarization requirements for this form
This form usually doesn’t need to be notarized. However, local laws or specific transactions may require it. Our online notarization service, powered by Notarize, lets you complete it remotely through a secure video session, available 24/7.
Typical mistakes to avoid
- Failing to clearly define the scope of work.
- Not detailing payment schedules which can lead to disputes.
- Neglecting to include insurance requirements.
- Forgetting to specify timelines for project completion.
- Using outdated or incorrect state-specific materials.
Why complete this form online
- Convenient access to a legally drafted contract that saves time.
- Editable templates allow for easy customization based on project needs.
- Secure storage and retrieval options for future reference or updates.
- Availability of additional legal resources and support for questions.
Legal use & context
- This contract is legally binding upon signing by both parties.
- Ensure that all changes to the contract are documented through written amendments or change orders.
- Review local construction laws for compliance with licensing and safety regulations.
- Understand that failure to adhere to the terms may result in disputes or legal action.
What to keep in mind
- The Time and Material Building and Construction Contract allows flexibility in construction payments based on actual labor and materials used.
- Clearly defining responsibilities and payment terms can prevent disputes.
- This form is suitable for various construction projects where the scope may evolve.
- Consulting legal experts can ensure compliance with specific state laws.
Form popularity
FAQ
What is an example of a time and materials contract? An example of a time and materials contract is a contract that stipulates a $30 hourly rate plus an additional 10% on any items purchased. It also states that buyers will not pay more than $1,000 in materials and in excess of 80 hours of labor.
The main advantage of a time and materials contract is that it allows for flexibility, since the contractor can adjust the amount of time and materials used as needed.
A time and materials contract requires a client to pay for a contractor's time and money spent on materials. They usually specify an hourly rate plus a markup for materials. While many of these contracts are based on an estimate, the estimate may not be the full price required at the end of the project.
The industry-standard markup for time and materials contracts ranges between 15% and 35%. That means, if a subcontractor paid $1,000 to their vendor for lumber, the price for materials billed to the project budget could range between $1,150 and $1,350.
Disadvantages: Clients often prefer a fixed price contract because their risk is lower and budgeting is easier. When bidding against a fixed price contract, the contractor with a time and materials contract may lose the bid. Tracking materials costs and labor hours is extra work for the contractor.
