In Episode 10 Jon and Joe discuss 3 types of construction contracts that are commonly used in the construction industry. The contract types include Negotiated Contracts, Cost-Plus Contracts, and Lump-Sum Contracts. Negotiated contracts are contracts that are agreed upon by both the project owner and the contractor early on in the process, many times as early as the conceptual and design phase. Secondly there are Cost-Plus Contracts, most commonly used when the scope of work can not be easily defined or construction drawings are minimal. Lastly, are Lump-Sum Contracts, probably the most common type of contract in the industry where there is a stated price and the contractor agrees to complete the scope of work for the stated amount.
Chapters
00:00 3 Types of construction Contracts
00:36 Introduction to 3 Types of Contracts
04:24 Deep Dive-Negotiated Contracts
09:48 Deep Dive-Cost-Plus Contracts
16:45 Deep Dive-Lump-Sum Contracts
21:22 Recap and Outro
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Keywords
commercial construction, business strategy, business, start a business, start your own company, start a construction company, builder insights, contractor insights, contracting business, entrepreneur, entrepreneurship, commercial construction industry, architecture, commercial real estate, commercial lending, brand building
Takeaways
* Introduction to the 3 most common types of contracts in the construction industry.
* Learn about Negotiated contracts, the pros and cons and when to use them and when not to.
*Learn about Cost-Plus contracts, the pros and cons and when to use them and when not to.
* Learn about Lump-Sum contracts, the pros and cons and when to use them and when not to.
* Understand why there are three types contracts and how they serve a specific purpose.