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Commonly Asked Questions about Building Industry Contracts

Contract Types Comparison Party 1 offers Bilateral Services or goods that are of value to the other party Unilateral Services or goods that the other party requested, usually in an open request Implied Services or goods Express Anything9 more rows Jan 26, 2022
Basic types of construction The four main types of construction are: residential construction, commercial construction, industrial construction, and infrastructure construction.
Here are four main construction contracts to choose from, plus their pros and cons: Lump-Sum Contracts. Cost-Plus-Fee Contracts. Guaranteed Maximum Price Contracts. Unit-Price Contracts.
2.1 A construction contract is a contract specifically negotiated for the construction of an asset or a combination of assets that are closely interrelated or interdependent in terms of their design, technology and function or their ultimate purpose or use.
There are five common types of construction contracts: lump sum (or fixed price), time and materials (TM), unit price, guaranteed maximum price (GMP), and cost-plus.
A well-crafted building contract should provide comprehensive details such as the scope of work, payment terms, timelines, warranties, and procedures for resolving conflicts. Hence, both parties must carefully examine and comprehend the terms and conditions of the building contract before signing.
The basic elements required for the agreement to be a legally enforceable contract are: mutual assent, expressed by a valid offer and acceptance; adequate consideration; capacity; and legality.