Explain the different types of building contracts?
- Fixed price or lump sum contracts- In this contract, the buyer agrees to pay a fixed amount and then the contractor agrees on that. There are no changes made in the amount and some allowances which gives the buyer some sort of certainty in it.
- Time and material contracts- Here time is the major factor which derives all the contract and decides the money. Material and time spent by the builder along with his subcontractors. It is not certain as time, and the cost of the materials keep on changing.
- Cost plus contracts- Actual construction cost is paid to the contractor along with a set percentage of an amount for constructing a building. There are several ways involved here such as the addition of cost with a fixed fee.