Cost Plus Construction Agreement Template for Canada

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Key Requirements PROMPT example:

Cost Plus Construction Agreement

I need a Cost Plus Construction Agreement for a large hospital renovation project in Ontario, with specific provisions for medical facility compliance and staged completion requirements, where work needs to begin by March 2025 while keeping parts of the hospital operational.

Document background

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.

Suggested Sections

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

Optional Sections

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

Suggested Schedules

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

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co

Relevant legal definitions

Actual Cost
Agreement
Allowable Costs
Applicable Laws
Architect
As-Built Drawings
Background IP
Base Fee
Business Day
Certificate of Completion
Change Directive
Change Order
Commencement Date
Completion Date
Construction Equipment
Construction Schedule
Consultant
Contractor
Contractor's Fee
Contractor's Personnel
Cost Plus Fee
Deficiency
Deliverables
Direct Costs
Drawings
Effective Date
Emergency
Environmental Requirements
Extras
Final Completion
Force Majeure
General Conditions
Good Industry Practice
Governmental Authority
Hazardous Materials
Health and Safety Plan
Holdback
Indirect Costs
Insurance Requirements
Intellectual Property Rights
Invoice
Key Personnel
Lien
Markup
Material
Milestone
Non-Allowable Costs
Notice
Owner
Owner's Representative
Payment Certificate
Payment Period
Permits
Project
Project Manager
Project Schedule
Quality Management Plan
Reimbursable Expenses
Schedule of Values
Scope of Work
Site
Specifications
Subcontractor
Substantial Completion
Supplier
Supporting Documentation
Taxes
Time for Completion
Variation
Warranty Period
Work
Work Product

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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Authors

Alex Denne

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