Charleston Home + Design Magazine - Spring 2015

Page 70



Building Contracts

Made Simple

Unit-Price Contract “In a unit-price construction contract, the client or owner pays a fixed sum for each completed unit of work.”

Lump-Sum Contract

Tom Martin | Tom Martin and Son

(843) 559-3823 •

“A lump-sum contract is also referred to as a fixed-price contract. The contractor agrees that, for a set price, he or she will construct a home according to the set of plans and specifications described in the contract.” Kara Crowell | Cinder Creek Construction (843) 768-0784 •

Guaranteed-MaximumPrice Contract

“For a cost-plus contract, the contractor agrees to invoice the owner as he incurs labor and material costs and adds a percentage for overhead and profit that is set in the original agreement.”

“A guaranteed-maximum-price contract is an open-book agreement between the homeowner and the contractor. The contractor is paid for the actual cost of the work plus a fixed fee to manage the project, which is guaranteed not to exceed an estimated price included in the contract. In this type of contract, any savings from the estimate are passed on to the owner, and the contractor is responsible for cost overruns unless the scope of the work changes.”

Alan Wheeler | Coastal Design Builders

Amy Hill | Verdi

Cost-Plus Contract

(843) 300-9383 •


CH+D • Spring 2015

(843) 475-3317 •