Though many North Carolina construction projects have specific goals and timelines, that is not always the case. It is possible for a project to have an unclear timeline or undefined goals. In such cases, construction company owners may have concerns about how to best create an agreement for conducting the work, but time and material contracts may be of use.
A T&M contract involves creating a set rate for hours and materials used for a project. Some specifics for such contracts include the following:
- Material markup, which accounts for possible market changes and material pricing
- Labor rate, which addresses the rates of pay for the individuals involved
- Not-to-exceed clauses, which can address maximum costs for materials
- Maximum labor hours, which can indicate that the customer does not have to pay for any hours worked over this limit
While various types of construction contracts exist, a T&M contract may be useful for companies that are new to contract work or when working on a project that does not have the usual specifics, such as a set deadline or set project goals. This type of contract is often easier to modify than others and can provide more flexible scheduling. Of course, it could also mean greater variances in costs and risks.
Whenever a contract is needed, it is important for construction company owners utilize the best type for the situation. If North Carolina company owners are new to the industry or are unfamiliar with time and material contracts, they may wish to gain additional information on this option. Discussing the details with experienced contract law attorneys could better ensure that the contract meets necessary legal stipulations.