One of the most important early decisions in any building project is choosing the right contract structure.

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The two most common options are Fixed Price and Cost Plus. Each has advantages depending on the level of design detail, flexibility required and how defined the scope of works is.

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Understanding the difference can help you make the right choice for your renovation or extension.

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Fixed Price Contract

A fixed price contract sets an agreed price upfront based on the approved plans and defined scope of works. These are best suited to projects where selections, drawings and scope are clear before construction begins.

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Benefits:

• Greater upfront price certainty

• Easier budgeting

• Clear inclusions and scope

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Considerations:

• Variations may apply if scope changes

• Requires detailed planning early

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Cost Plus Contract

A cost plus contract is based on actual project costs plus an agreed builder’s margin. This contract is best suited to renovations or complex projects where hidden conditions or changing scope may arise.

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Benefits:

• Greater flexibility

• Transparent cost tracking

• Can commence earlier in some cases

 

Considerations:

• Final cost can vary depending on decisions and site conditions

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Not sure which contract suits your project?

We can explain the options clearly and recommend the right structure based on your renovation goals, timeline and budget. Get in touch today.