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A construction contract is established between a client and a general contractor for building or remodeling a home. There are four types of construction contracts: fixed price, time and material, unit pricing, and cost plus. Fixed price involves a set price covering all materials and labor, with the client agreeing to pay at cost for any additional expenses. Time and material contract pays for materials and labor at a negotiated rate. Unit pricing is based on a per square foot basis. Cost plus involves paying the contractor more than what they pay their staff.