TL;DR
A cost-plus contract is a construction agreement in which the owner pays the contractor's actual documented costs, labor, materials, subcontracts, plus a fee that is either a fixed amount or a percentage. It suits projects whose scope cannot be pinned down up front, like old-house renovations, and entitles the owner to see invoices and payroll backup.
What it means
A cost-plus contract is a construction agreement in which the owner pays the contractor's actual documented costs, labor, materials, subcontracts, plus a fee that is either a fixed amount or a percentage. It suits projects whose scope cannot be pinned down up front, like old-house renovations, and entitles the owner to see invoices and payroll backup. The known weakness is that a percentage fee rewards spending, so many owners negotiate a guaranteed maximum price (GMP) cap or convert to fixed price once unknowns resolve.
Where it sits in the glossary
Cost-plus contract is part of the Legal group inside the ProFix Directory glossary. Browse every term in this category from the glossary index.
Why Ohio homeowners should know it
This is a term Ohio homeowners encounter when reading contractor quotes, hiring paperwork, or inspection reports. Understanding it well enough to ask one good follow-up question is usually all the protection a homeowner needs.
ProFix Directory keeps definitions short on the index page and saves the longer context — Ohio-specific rules, where the term comes from, and which ProFix tools touch it — for these per-term pages so the term is easy to cite and easy to share.
ProFix tools that touch this term
See also
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