The Cost Plus Construction Agreement is designed for Canadian construction projects where the exact scope or costs cannot be precisely determined at the project's outset. This contract type is particularly useful for complex, rushed, or emergency projects where waiting for detailed fixed-price quotes would be impractical. It provides flexibility while maintaining cost transparency and control through detailed cost reporting requirements. The agreement complies with Canadian federal and provincial construction laws, including the Construction Act, and includes provisions for liens, holdbacks, and prompt payment requirements. It's structured to protect both owner and contractor interests while facilitating project execution with fair risk allocation and clear administrative procedures. This type of agreement is commonly used in commercial, industrial, and institutional projects where scope changes are likely or where fast-tracking is required.
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1. Parties: Identification of the Owner and Contractor, including full legal names and addresses
2. Background: Context of the agreement, project overview, and relationship of the parties
3. Definitions: Defined terms used throughout the agreement, including specific cost-plus related terms
4. Scope of Work: Detailed description of the construction work to be performed
5. Cost Plus Structure: Definition of costs, contractor's fee/markup, and allowable expenses
6. Payment Terms: Billing procedures, payment schedules, and documentation requirements for costs and markup
7. Project Schedule: Timeline, milestones, and completion requirements
8. Contractor's Obligations: Specific responsibilities including labor, materials, supervision, and compliance
9. Owner's Obligations: Access to site, permits, approvals, and owner-supplied items
10. Changes and Extra Work: Process for handling change orders and additional work
11. Quality Control: Standards, inspections, and acceptance criteria
12. Insurance and Indemnity: Required insurance coverage and indemnification provisions
13. Termination: Grounds and procedures for contract termination
14. Dispute Resolution: Process for resolving disputes between parties
15. General Provisions: Standard contract clauses including notices, assignment, and governing law
1. Performance Security: Requirements for bonds or other security, used for larger projects
2. Subcontractors: Rules for subcontracting, needed when subcontractors will be used
3. Liquidated Damages: Predetermined damages for delays, used when specific completion dates are critical
4. Environmental Requirements: Special environmental obligations, needed for environmentally sensitive projects
5. Health and Safety: Specific health and safety requirements, detailed section needed for complex/hazardous work
6. Equipment and Materials Storage: Storage requirements and responsibilities, needed for projects with significant materials storage needs
7. Value Engineering: Process for cost-saving proposals, useful for larger complex projects
8. Site Security: Security requirements, needed for sensitive or high-risk locations
9. Warranty: Extended warranty provisions beyond standard requirements
1. Schedule A - Scope of Work: Detailed specifications, drawings, and work requirements
2. Schedule B - Cost Schedule: Breakdown of cost categories, markup rates, and allowable expenses
3. Schedule C - Project Schedule: Detailed timeline, milestones, and completion dates
4. Schedule D - Key Personnel: List of key project team members and their roles
5. Schedule E - Required Insurance: Specific insurance types and coverage amounts
6. Schedule F - Forms: Standard forms for progress claims, change orders, and cost reporting
7. Schedule G - Site Rules: Site-specific regulations and procedures
8. Schedule H - Equipment and Materials: List of owner-supplied items and contractor's equipment
9. Appendix 1 - Technical Specifications: Detailed technical requirements and standards
10. Appendix 2 - Drawings: Construction drawings and plans
Relevant legal definitions
Clauses
Relevant Industries
Commercial Real Estate
Residential Construction
Industrial Construction
Infrastructure Development
Healthcare Facilities
Educational Institutions
Retail Development
Hospitality
Manufacturing
Energy and Resources
Public Sector
Transportation
Relevant Teams
Legal
Finance
Operations
Procurement
Risk Management
Project Management
Construction Management
Commercial
Development
Contract Administration
Executive Leadership
Relevant Roles
Construction Manager
Project Manager
Contract Administrator
Chief Financial Officer
Legal Counsel
Quantity Surveyor
Cost Controller
Procurement Manager
Risk Manager
Operations Director
Site Superintendent
Commercial Director
Executive Director
Development Manager
Finance Manager
General Counsel
Senior Project Manager
Construction Director
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