The Benefits and Best Uses of Lump Sum Contracts Part 2
In our last article, we introduce contractors to the benefits of lump sum contracts. This second article will continue our discussion but segue into the best types of projects contractors should use lump sum projects for. Finally, we’ll briefly touch on what could go wrong with a lump sum contract.
Complete Projects Faster
In the construction world, time is money. The goal is to complete projects more faster and more efficiently but within budget. An increased profit margin is enough to ensure that contractors will strive to for optimum performance while completing work under project timelines.
Best Types of Projects
The magic word for lump sum contracting is “simple.” These contracts work best for straightforward projects, or else, they can cause major issues and disputes as the operation progresses. The projects that work best with lump sum contracts include projects with a low risk of unforeseen conditions, projects that will require little to no change, and projects with a well-defined scope of work that is understood and agreed upon by all parties.
What Could Go Wrong
In conclusion, our Tallahassee construction law attorneys are very familiar with the types of contracts professionals should use on their projects. We must reiterate that these contracts can be risky for contractors especially where liens and engineering cost are concerned. However, these can be addressed with the help of an attorney if necessary. Furthermore, drawings and specifications must be detailed and complete, and the scope of work must well-defined in order to properly estimated the costs of the project. If not, changes can be difficult and costly.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.