The Fixed Rate Contract With Allowances: a Stealthy Cost-Plus?
As a practicing construction law attorney in North Carolina, I have occasion to review all kinds of construction contracts. Typically, there are two main types: The first is the cost-plus contract, also known as “time and materials.” This contract requires the owner to pay the contractor for all labor and materials costs incurred on the project, plus a fee (typically 15%). It’s easy to see why contractors like this structure--if costs go up during the build, the contracto