Cost Plus Contracts

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Cost plus contracts are prohibited under the DBCA unless certain strict criteria are satisfied. An example of when a cost plus contract may be permitted is when the cost of a substantial part of the work cannot reasonably be calculated without some of the work actually being carried out e.g. rectification of termite damage where the extent of the damage cannot be accurately determined until after work has started.

WARNING: Because cost plus contracts involve considerable legal and financial risks for both contractors and homeowners, and are a common source of disputes, you are strongly advised to get formal legal advice before using a cost plus contract.