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A construction contract is established between a client wanting to build or remodel a home and a general contractor. While these agreements can be lengthy, this video aims to simplify them. There are four main types of construction contracts: 1. **Fixed Price** - A set price is agreed upon, covering all materials and labor. The client may include a clause to limit total costs.2. **Cost Plus** - The client pays for materials and labor at cost, with the contractor earning a profit margin, either as a percentage of total costs or a fixed fee.3. **Time and Materials** - The client pays a negotiated rate for materials and labor, allowing the contractor to profit by charging more than their expenses.4. **Unit Pricing** - Contracts can also be structured on a per square foot basis.
