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A construction contract is established between a client and a general contractor for building or remodeling a home. While construction agreements can be lengthy, this video aims to clarify them. There are four main types of construction contracts: 1. **Fixed Price**: A set price covers all materials and labor, and clients may pay an agreed percentage for contractor profits. A clause may limit total costs. 2. **Cost Plus**: Clients pay contractors for materials and labor, plus a profit margin. 3. **Time and Materials**: Clients are charged negotiated rates for labor and materials, with contractors profiting by markup. 4. **Unit Pricing**: Contracts are based on a per square foot rate.Understanding these types can help clients make informed decisions.
