What is a cost plus contract in construction and how does it work?

[houseura]

A cost plus contract is a construction agreement where the client agrees to pay the contractor for the actual costs incurred during construction plus an additional fee or percentage for profit. Unlike fixed-price contracts, cost plus contracts offer more flexibility for changes and unforeseen expenses. They are particularly useful for complex or custom projects where scope and costs may evolve. However, it requires detailed tracking of expenses and clear documentation.
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