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A cost plus contract is becoming a popular form of building contract in today’s busy building environment. Essentially it’s a contract where a builder, using its best endeavours, obtains materials and services at each stage of the building process, passing the actual costs on to the owner and adding an agreed margin to cover overheads and profit. Usually there are agreed hourly rates for the supply of a builder’s own labour.The builder makes claims, including the its margin, at agreed intervals and may present the client with supplier invoices if required.Cost plus contracts are allowable under the Home Building Contracts Act (1991), but the contract must be expressly titled as that.

2 responses to “Cost Plus Contracts”

  1. steve says:

    Its my impression that when using a cost-plus contract the builder invoices a client for works with the fee say 10% or can the builder get the client to pay all invoices and charge the client a 10% percent fee only?

  2. global barrumundi says:

    hi, good advice but I would prefer it written rather than spoken. thankyou I will go to M.B.A. . com. regards have a good crissy