Home Improvement Construction Contract

Home Improvement Construction Contract (Cost Plus Basis of Payment)

Home improvement contract made on this day of , 20,

between of , hereinafter called Owner, and , a corporation organized and existing under the laws of the state of , with its principal office located at , referred to herein as Contractor, Contractor's License No. .

1. Scope and Description of Work

Contractor agrees to perform for Owner certain alterations and improvements in and upon the home of Owner located at , in accordance with the following specifications:

(Detailed description of work)

Contractor shall furnish all labor and materials for such work.

2. Contract Price

A. Owner will pay the cost of all materials necessary to do the above-described work and actually used in the construction and will pay the wages of all carpenters and other workers for actual time spent on the job and will pay Contractor % of the cost of the materials, labor, and other expenditures necessary for the completion of the work such as workers' compensation. In consideration of this %, Contractor agrees to execute close supervision over the work at all times and will devote whatever time he can to actually working on the job, all for the specified %. The amount of wages paid the workers on the job shall not be more than the usual wage scale paid such workers in the vicinity of the project to do this type of work. At each payday, the wages of the workers will be paid by Owner and a receipt taken from each worker. These payments will be made on behalf of Contractor and at the same time Owner will pay to Contractor the amount of withholding taxes, social security, and similar items that is deducted from each worker's wages. Owner will likewise pay all material bills and invoices, paying the exact cost of such material less any and all discounts that contractor will be able to obtain on all materials used on the job.

B. Contractor will at all times keep Owner informed of the details of the amount of materials purchased and the amount used on the job, as well as keeping Owner informed of the wages being paid the various workers on the job. The bills and invoices of all subcontractors will be paid directly by Owner on the same basis as set forth in this Agreement on the wages of the workers.

C. Compensation to Contractor shall not include:

1. Salaries of Contractor's executive officers.

2. Salary of any person employed during the execution of the work in the main or branch office of Contractor whose time is devoted to the general conduct of Contractor's business, such as supervisors, secretaries, plan clerks, file clerks, checkers, drafters, and other such persons.

3. Cost of capital employed or money borrowed.

4. Overhead or general expense of any kind, except any such specifically mentioned elsewhere in this Agreement.

5. Services and expenses of Contractor's home office estimating, purchasing, and cost and accounting departments.

6. Costs incurred by Contractor due to any error, fault, or negligence on the part of Contractor, its subcontractors, agents, or employees, or due to their failure to comply in all respects with the provisions of this Agreement and with the plans.

D. Billing on cost-plus work

Cost-plus billings shall be supported with proper bills and invoices for labor, materials, subcontracts, and other items.

3. Start and Completion of Work

The work shall commence not later than , and shall be completed within calendar days following such date. Contractor shall not be liable for any delay or nonperformance caused by an act of God, strikes, unavailability of materials, or any other contingency beyond his or her control. In the event of delay or nonperformance by Contractor for causes other than those mentioned above, Contractor shall pay to Owner liquidated damages of $ for each day of delay or nonperformance, but in no event shall the amount of such liquidated damages exceed the Contract Price provided in this Agreement.

4. Cancellation

A. This Agreement may be cancelled by Owner within business days following the date of the execution of this Agreement by giving written notice of rescission to Contractor at the address given in this Agreement, in which event Owner shall be entitled to a complete refund of the down payment given to Contractor at the time of the execution of this Agreement.

B. After the period expressed in Paragraph A, but before the actual commencement of work by Contractor, Owner may cancel this Agreement, in which event Owner shall forfeit to Contractor the down payment given at the time of the execution of this Agreement.

C. If Owner cancels this Agreement after the Contractor has commenced the work, then Owner shall forfeit the amount of the down payment given to Contractor at the time of the execution of this Agreement and, in addition, shall pay to the Contractor such proportion of the Contract Price as the amount of labor and materials furnished bears to the total amount of labor and materials agreed upon to be furnished under this Agreement, which amount is to be paid within days from the date of such cancellation.

D. If Contractor is unable to complete the performance of its obligations under this Agreement due to acts of God, strikes, unavailability of supplies or material, or any other contingency beyond his or her control, then Owner may at his or her option cancel this Agreement, in which event Owner shall only be liable to pay Contractor the amount of labor and material already furnished. Such payment is to be made within days after the date of such cancellation.

E. If Owner's home is destroyed by fire, earthquake, or any other cause not attributable to Owner, this Agreement shall automatically be cancelled with the parties having no further obligation to each other, and the down payment given by Owner at the time of the execution of this Agreement shall be retained by Contractor.

5. Alterations

Any alterations or modifications initiated by Owner or Contractor must be agreed upon between the parties and the price fixed by them before work on such alteration or modification shall commence. Payment for such alteration or modification shall be made at the time of the final completion of the work.

6. Permits and Licenses

Contractor shall be responsible for securing the necessary permits and licenses for the work at his or her own cost and expense.

7. Warranty

Contractor guarantees that the work will be constructed in accordance with accepted home improvement practices, and it will guarantee against defects in the quality of work and materials for a period of years from the date of its completion. This warranty does not cover damage or defects that are the result of characteristics common to the materials used or conditions resulting from condensation, expansion, or contraction of such materials. Warranty work must be completed within days from the date of receipt of written request from Owner.

8. No Waiver

The failure of either party to this Agreement to insist upon the performance of any of the terms and conditions of this Agreement, or the waiver of any breach of any of the terms and conditions of this Agreement, shall not be construed as subsequently waiving any such terms and conditions, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred.

9. Governing Law

This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of .

10. Mandatory Arbitration

Notwithstanding the foregoing, and anything herein to the contrary, any dispute under this Agreement shall be required to be resolved by binding arbitration of the parties hereto. If the parties cannot agree on an arbitrator, each party shall select one arbitrator and both arbitrators shall then select a third. The third arbitrator so selected shall arbitrate said dispute. The arbitration shall be governed by the rules of the American Arbitration Association then in force and effect.

11. Entire Agreement

This Agreement shall constitute the entire agreement between the parties and any prior understanding or representation of any kind preceding the date of this Agreement shall not be binding upon either party except to the extent incorporated in this Agreement.

12. Modification of Agreement

Any modification of this Agreement or additional obligation assumed by either party in connection with this Agreement shall be binding only if placed in writing and signed by each party or an authorized representative of each party.

13. Assignment of Rights

The rights of each party under this Agreement are personal to that party and may not be assigned or transferred to any other person, firm, corporation, or other entity without the prior, express, and written consent of the other party.

14. Counterparts

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument.

15. In this contract, any reference to a party includes that party's heirs, executors, administrators, successors and assigns, singular includes plural and masculine includes feminine.

WITNESS our signatures as of the day and date first above stated.