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A construction contract is established between a client and a general contractor for building or remodeling homes. This video aims to clarify the complexities of construction agreements and discuss how to create one. There are four main types of construction contracts: 1. **Fixed Price**: A predetermined price covers all services, materials, and labor; clients pay for actual costs plus profit.2. **Cost-Plus**: Clients pay for materials and labor, with contractors earning a profit based on a percentage of total costs or a fixed fee, often with a cap on total costs.3. **Time and Material**: Clients are billed for materials and labor at negotiated rates, allowing contractors to profit from the markup.4. **Unit Pricing**: Contracts can be based on a per square foot rate for construction.