A legal agreement between the homeowner and contractor that states the contractor's compensation for the job will be a percentage of the total cost of the project's labor and materials.
A construction contract in which the contract price is equal to the cost of construction plus a profit allowance to the builder; as opposed to a fixed bid contract.
A contract providing that the contractor's profit is fixed at a specific percentage of the actual cost of labor and materials.
Generally considered to be a separated contract, requires the complete accounting and invoicing of all costs separated into labor and materials.
A construction contract that has an allowance for the builder's profit (as distinct from a set- or fixed-price contract).
A construction contract that determines the builder's profit based on a percentage of the cost of labor and materials.
An agreement in which a construction contractor receives a fee based on a percentage of all costs paid for labor and materials.
An agreement or contract where a construction contractor receives a fee based on a percentage of all costs paid for labour and materials.
A Cost-plus contract is a contract framed in such a way that when the contractor finishes the agreed-upon work, they receive compensation equal to their expenses plus some bonus (which can be either a fixed amount or proportional to the expenses). Even if the contractor suffers cost overruns, they will still receive full compensation plus their expected profit. There is little or no direct financial incentive to minimize costs, since the contractor will always be fully reimbursed (plus profit) upon contract completion.