Carr Law Firm, P.A.
Serving All Of Florida
407-426-9300 888-351-0905

When dealing with a cost-plus contract, cover your bases

In the business world, contracts are common. Because of the costly consequences that a poorly written contract can have on a company, it is extremely important that all business owners in Orlando protect themselves by scouring every word of any contract they sign. Even better is to have someone familiar with contract law read it over as well.

As many businesspeople in Orlando know, however, not all contracts are the same. One particular contract to be cautious of is the cost-plus contract. Most commonly, cost-plus contracts are used in remodeling projects, but may be used in other instances as well. What makes a cost-plus contract unique is that the individual who signs agrees to not only pay for the remodel work but also for other overhead costs that can sometimes arise during a remodel. If you are not careful upon signing the contract, you could end up being liable for much more than you anticipated. Fortunately, there are ways to protect yourself.

First, you must ask the contractor to provide you with the maximum amount you will be expected to pay. Next, you should receive from the contractor a timeline of when certain parts of the project will be completed and a detailed list of the expected cost of materials and time. On top of these things, include in the contract that the contractor must provide you with a cost report each month. Your job is to review these carefully to ensure the contractor is staying within the bounds of the agreement.

Cost-plus contracts are fairly common, but that does not mean they don't get confusing. Making sure every detail of the contract makes sense is not always easy -- especially if you have no experience with cost-plus contracts. Those who stand to lose something if a contract is not followed should consider having an attorney review it before signing.

 

Source: Florida Today, "As a Business Expert: Cost-plus contracts require close attention to the deal's details," Ed Kinberg, Oct. 1, 2013

No Comments

Leave a comment
Comment Information
| Email Us For A Response

What Clients Say About Carr Law Firm

  • Pete Carr has represented my companies for the past several years. He has handled all of the companies litigation needs along with providing legal counsel and legal documents as needed. Pete is always extremely professional but the thing that I like the most about Pete is how responsive he is when needed.
    Danny Quinn, President
    Quinn Commercial, Inc and Quinn Contractors, Inc.
    read more
  • Peter Carr of the Carr Law Firm, P.A., has represented various companies I owned since 2009. Mr. Carr is a great talent in landlord/tenant disputes and general corporate litigation. In every case he has represented me in, he researched and advised me of the best solutions to either settle the case or to fight.
    Abdul Mathin
    Blackmine Property Management
    read more
  • Pete has been my attorney for many years. I previously worked with other attorneys and what I like about Pete is that he looks at all angles of the situation and gives me advice that is in my best interests, even if it’s not what I want to hear. When necessary, he litigates aggressively.
    Vincent F. Wolle, CCIM, SIOR
    Broker-Investment Partner
    Results Real Estate Partners, LLC
    read more

Carr Law Firm, P.A.
203 E. Livingston Street
Orlando, FL 32801

Toll Free: 888-351-0905
Phone: 407-426-9300
Fax: 407-426-9304
Map & Directions