What is a Unit Price Contract?

A Unit Price Contract is a flexible agreement in construction where the client pays the contractor based on the actual quantities of work completed, at set unit prices.

This contract is ideal for projects where the total scope of work is uncertain or expected to change. For example, if you're paying for road construction, you'd pay per mile of road laid or per cubic yard of asphalt used.

The Importance of Unit Price Contracts

Unit Price Contracts are beneficial because they provide a fair and transparent way to handle changes in project scope.

They reduce the risk for both parties: the client pays only for the work done, and the contractor is ensured payment for any additional work required.

This arrangement encourages accurate record-keeping and efficient work practices.

Managing Unit Price Contracts

Effective management of Unit Price Contracts requires accurate estimation of unit costs and close monitoring of work quantities.

Contractors must keep detailed records of the materials used and the work completed.

Regular communication with the client about project progress and adjustments to the scope is essential to ensure that both parties are aligned and satisfied with the work and payments.


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