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Construction developers and types of contracts

Construction projects can be handled by both owners and private contractors. They are also called construction developers. Developers have certain responsibilities that must be fulfilled to ensure the project is successful. Failure to follow the correct protocol might lead to complications and delays in the project.

There are different types of developers in the construction business. Some choose to start their own construction company and become owners of the land. They can later sell it for a profit. Other developers start their own construction companies and accept work from different clients that offer a good price. Developers may also take on a task and subcontract all the work to other vendors to make profits.

Contracts in the construction industry are different from other industries. The prices of different services and commodities keep changing during the course of the contract. Thus it becomes difficult to estimate the cost of construction accurately. Different types of contracts are drafted in order to deal with this problem. A lump sum contract is a fixed price contract in which the price remains fixed. If such a contract has been signed, the contractor must finish the project within the provided budget. Under this contract, the developer must pay the contractor and give them complete access to the work site. This is the most widely used contract within the construction industry.

Another type of contract being used is the cost-plus-fee contract. In this contract, the owner must provide all costs of the construction. On top of that, an overhead profit must also be paid to the contractor. This type of contract is riskier for the owner and easier for the contractor. It is the exact opposite of the lump sum contract.

Developers may choose either way to work on the project. But any complications could lead to lawsuits and severe litigation. If you are stuck in a construction litigation battle, it is advisable to contact an experienced attorney. The attorney will go through the case and try to get the best outcome for you.

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