Types of construction contracts pdf

At the early stages of any construction project, the owner with his engineer or consultant prepares necessary documents for the tender process, which will be included in the contract. These documents are called contract documents. See full list on theconstructor. The different types of documents in a construction contract are as follows- 1. General conditions 2. Special conditions 3. Drawings and specifications 4. Q (bill of quantity) 5. Letter of acceptance 6. The conditions of contract are terms that rule the relationships between the owner and the contractor, define each party’s rights and obligations, specify the method of payment and determine actions required when existing any disputes between the owner and the contractor.

One of the characteristics of construction projects is uniqueness. Every project has its particular circumstances, so it’s crucial to select the contract type which suits the project. The owner develops the process of selecting the type of contract. There are many types of contracts used in construction. Each type has its advantages and disadvantages concerning the owner and the contractor.

They are categorized into two major groups as per the method of payment to the contractor. The following are the types of construction contracts generally used in construction projects: 1. Unit price contract 3. Cost-plus contract 4. In this type, the contractor bids a single fixed price for overall activities in the project scope. All risks are assigned to the contractor, and there isn’t any risk carried by the owner.

This contract is ideal when the. The total price of the project in the unit price contract is based on the price of each item’s unit. The risk is shared with the contractor and the owner. The contractor is paid as per the rates of items specified in the bill of quantity.

The construction of the project can be started before finishing the designs, so the total cost of the project will be uncertain at the early stages of the project. Target cost contract has common features of the lump sum and cost-plus contracts. There is a risk carried by the contractor in case of an increase in the cost of construction projects.

The agreement of how the owner will pay the contractor for work performed such as a lump-sum or cost-plus payment. These types of contracts are generally not favored for road construction , but elements of such contracts may be incorporated in a lump sum contract for a better allocation of risk. Is there a fixed time frame for completion and how is completion determined? Once properly conclude a contract is binding on each party. Construction contracts often include a substantial completion date.

What is the construction “contract documents”? What are the different types of construction contracts? Contract Types : Legal Overview Congressional Research Service his report provides an overview of the various contract types (e.g., fixed-price, cost-reimbursement) used in federal procurement and the legal requirements pertaining to each. After familiarizing the reader with the meaning, scope, types and parties of construction contracts , the material deals with the ever-evolving construction law theories including the different international and national legal regimes as well as policy considerations that are applicable to construction contracts. All Major Categories Covered.

Instantly Find and Download Legal Forms Drafted by Attorneys for Your State. Different Contract Types 1. Lump sum contracts 2. Among the various types , the lump sum, commercial, and percentage rate contract are the most common. It is also known as a “fixed price” contract. A lump sum contract is the most common pricing arrangement for construction contracts. In a lump sum contract , the parties agree to one price based on the contractor ’s estimate of the total costs of the project.

These are mostly used construction contracts based on the nature of construction projects. Ownership of Materials. Under lump sum contract agreement, a contactor agreed to work on a project or part of the project with a fixed price.

The client will pay a set of amounts after completing the works as described in the specification. The most common types under English law are (1) contracts of record (2) contracts under seal and (3) simple contracts. The Roman Dutch law that applies in Sri Lanka, does not recognize the above distinctions and all contracts are treated as simple contracts.