Construction Contracts are a highly specialized subcategory of contract with substantially deals with the construction sector. Usually construction projects involve many parties with each party having different expectation and responsibilities associated with project for which they going under the contract. In simpler words construction contracts are the contracts which are mutually negotiated and agreed between the developers and the construction contractors for the specific project construction or set of projects.The construction contracts are usually divided in two generic types which are widely used in the construction industry.Fixed Price ContractsIn fixed price contracts, price of the contract is fixed in advance which remains independent of cost incurred in respect of the construction contract. The construction cost of the entire project or the construction cost of per unit is fixed for the project in fixed price contracts of the constructions. Some cases may have the escalation clause or some cases may not have the escalation clause. In fixed price contract, contract revenue can be reliably measured only if it is specified in the contract. Stage of completion of contract can also be measured reliably to know the stage of completion of construction contract to estimate the future cost extent so that future output can be estimated. The fixed price contracts have the advantage that all the parties involved in the contract can budget the cost of the project and rely on it throughout the construction.Cost Plus ContractsIn Cost plus contracts, the allowable construction expenses are reimbursed with a predetermined percentage of profit and it is paid to the contractors. The predetermined profit margin over and above the costs will be paid to the contractor accordingly. The outcome of a cost plus contracts can be reliably measured if the inflow of economic benefits is probable in the project. Cost over runs is very common in the construction of projects as it has various reasons behind it such as delay in construction, escalation in prices of construction material and labor costs. In this type of contracts, developers get the benefit due to accurate budgeting of the project but it does not always work to the benefits like fixed price contracts.Features of Construction ContractsConstruction Contracts usually have various features which may result in benefits for the developers as well as contractors.Cost Escalation Clauses – Construction industry is very unpredictable, hence there are strong chances that you will observe significant cost escalation in the life cycle of projects. Contractor can be entitled to claim any unexpected increase in the construction costs than the defined level in the construction clause. Such clauses are usually added in the fixed price contracts to protect against any abnormal rise in the prices which may result into a big loss for the associated contractors and developers.Contract Variations– Terms and conditions specified in the contract may subsequently varied through the mutual consent between contractor and developers due to relevant causes. Such variation may be mandatory so that unforeseen factors can be accommodated in the construction of projects. These variations may differ accordingly and the factors for which such variation can be done are change in customer requirements, change in approval process etc. займ на карту без отказов круглосуточновзять кредит онлайн