
Terms & Conditions
Cost Plus Contracts
I. PARTIES
This contract (hereinafter referred to as “Agreement”) is made and entered into on the date on the proposal, by and between the addressee of the proposal, (hereinafter referred to as “Owner”); and PNK Inc., (hereinafter referred to as “Contractor”). In consideration of the mutual promises contained herein, Contractor agrees to perform the following work subject to the terms and conditions below:
II. GENERAL SCOPE OF WORK DESCRIPTION
See scope of work section on the proposal.
III. GENERAL CONDITIONS FOR THE AGREEMENT ABOVE
A. CONTRACTOR’S DUTIES
Contractor acknowledges and accepts the relationship of trust implicit in this Construction Agreement. Contractor agrees to use best efforts, judgment, and skills to complete the work according to the terms and schedules contained in this Agreement. Contractor agrees to furnish competent construction management and administration and to adequately supervise the work in progress. Contractor agrees to complete the work in a timely and workmanlike manner.
Contractor represents and warrants the following to Owner:
Contractor is financially solvent.
Contractor can and will furnish the tools, materials, supplies, equipment, and labor required to complete the work and perform his obligations hereunder and has sufficient experience and skills to do so.
Contractor will employ only skilled and properly trained staff for the performance of the work. Contractor will submit a “Rate Schedule for Contractor’s Personnel” (see Section H below) which states the name and total rate charged for each of his employees who works on this project. Adjustments to the personnel on this list will be made by Contractor on an as-needed basis and Owner will be informed of all such changes.
B. CONTRACT DOCUMENTS
The Contract Documents consist of the following documents which are hereby incorporated by reference into this Agreement:
This Agreement.
Any plans, specifications, or addenda referred to in the General Scope of Work section above.
C. EXCLUSIONS
Exclusions section on the proposal.
D. DATE OF WORK COMMENCEMENT AND SUBSTANTIAL COMPLETION
Commence work: Generally within 2 - 4 weeks of the acceptance of this agreement. Actual start time to be arranged between the owner and contractor.
Project time through substantial completion: See substantial completion section of proposal, not including delays and adjustments for delays caused by: holidays; inclement weather; accidents; shortage of labor or material; additional time required for Change Order and Additional Work; delays caused by Owner, Owner’s design professionals, agents, and separate contractors; and other delays unavoidable or beyond the control of the Contractor.
DISCLAIMER: Contractor will use best efforts to have the project completed within the agreed upon timeline. However, due to the nature of the renovation/project/etc., the Contractor cannot guarantee a strict end date.
E. EXPIRATION OF THIS AGREEMENT
The Agreement will expire 30 days after the date of the proposal if not accepted in writing by Owner and returned to Contractor within that time unless otherwise stated on the proposal.
F. CONTRACTOR’S FEE
Owner will pay Contractor the Contract Sum consisting of the Cost of the Work as defined in Section H of this Agreement, plus a fixed percentage fee of 20% of the cost of all work as compensation for Contractor’s profit and overhead.
G. DEPOSIT AND PROGRESS PAYMENTS
The owner shall make initial deposit as noted on the proposal prior to the commencement of work. The deposit is designed to bridge the interval between progress payments and disbursements for subcontractors and material costs. The initial deposit and subsequent payments or deposits are non-refundable.
Based upon applications for payment and all supporting documentation submitted to Owner by Contractor on the last of every month, Owner shall make a progress payment to Contractor as provided below on the following first of every month (the next day). The amount of each progress payment shall be calculated as follows and paid on or before the first of the month following the date on which Contractor submitted the payment request/invoice:
Add up the total Cost of the Work as defined in Section H below, which has been performed during the payment period, add the appropriate percentage of Contractor’s Fee, and the total of these two amounts will be due each to Contractor.
Should expenditures surpass the allocated deposit, the contractor reserves may issue an invoice outside of the standard progress payment schedule, ensuring timely settlements with subcontractors and material vendors, thereby preventing potential disruptions in production.
H. COSTS TO BE REIMBURSED
Owner shall reimburse Contractor the Cost of the Work. The term “Cost of the Work” shall mean costs necessarily incurred by Contractor in good faith and in the proper performance of the work. The Cost of the Work shall include the items set forth in this section.
1. LABOUR COSTS: Construction workers directly employed by Contractor to perform the construction work (“In-House Labor”) will be paid as established by the Rate Schedule for Contractor’s Personnel set forth below. This rate schedule is the gross amount to be charged for each worker (any and all applicable labor burden, medical and retirement benefits, bonuses, etc. have been factored into these rates).
RATE SCHEDULE FOR CONTRACTOR’S PERSONNEL
WORKER POSITION HOURLY RATE
A. General labour: $80.00
B. Skilled labour: $95.00
C. Site Supervisor: $95.00
D. Project Management: $100.00
E. Administration: $85.00
2. CONTRACTOR’S SUPERVISORY PERSONNEL: When Contractor or Contractor’s employee is performing both carpentry work and supervisory work, there shall be no duplication of payment for such labour (i.e., payment for both carpentry work and supervisory work at the same time).
Owner will be billed for Contractor or Contractor’s project management performing off-site coordination activities or off-site job-related meetings directly related to the progress of the work. This off-site time billed to Owner shall not exceed 20 hours per week unless the off-site meeting is requested by Owner, or otherwise as agreed to in writing by Owner and Contractor.
All accounting work and documentation preparation in connection with payment applications is a direct job cost which will be performed at the rate of $65.00 per hour. Accounting and document preparation work is guaranteed not to exceed 8 hours per payment application.
3. COST OF TIME SPENT PICKING UP MATERIALS AND MOBILIZING JOB: Time spent by Contractor and his employees at lumberyards and material supply houses (including travel time to and from) to pick up materials, and time required to move tools and equipment onto the job site at the start of the project and away from the site at the end of the project, is part of the Cost of Work.
4. SUBCONTRACT COSTS: Payments made to Subcontractors to properly advance the project work is part of the Cost of Work for the project.
5. COST OF MATERIALS INCORPORATED INTO THE PROJECT: The cost of materials and equipment (and applicable sales tax, freight, or delivery charges) incorporated into the completed project is part of the Cost of the Work for the project. Any unused, excess materials shall be returned to the supplier for a credit. This credit will be issued to Owner along with the next billing by Contractor. Minor waste of materials is typical for every construction project and is considered a part of the Cost of the Work.
6. COSTS OF OTHER MATERIALS, EQUIPMENT, TEMPORARY EQUIPMENT, TAXES, SECURITY, AND RELATED ITEMS:
a. The cost of temporary fencing, temporary sanitation, monthly utility fees paid directly by Contractor, and rental equipment, including the costs of transporting and installing the equipment (if required).
b. The cost of consumable supplies which are consumed during the course of the project, e.g., circular saw blades, chalk, string line, reciprocating saw blades, wood stakes, forming lumber, pencils, etc.). No power tools or capital equipment will be paid for by Owner. Upon request by Owner, leftover consumable supplies will become the property of Owner at the end of the project.
c. Costs of removal of debris from the site and hauling and dump fees.
d. The cost of all taxes on the project itself imposed by local, state, or federal agencies related to the work (not including taxes on employees and subcontractors which have already been factored by Contractor into the labor rates above).
e. Security costs required by Owner or deemed essential by Contractor.
7. EMERGENCY REPAIRS AND PRECAUTIONS: The Cost of the Work shall also include any actions taken in case of an emergency to prevent threatened damage, injury or loss to persons and property on the job site.
I. COSTS NOT TO BE REIMBURSED
The Cost of Work shall not include:
Any general insurance costs and provincial and federal taxes of Contractor (e.g., worker’s compensation, comprehensive general liability insurance, auto insurance, health insurance, or labor burden expenses such as provincial and federal employer taxes, etc.). Contractor has factored these costs into the Rate Schedule for Contractor’s Personnel in Section 3.H.1, above, or these costs will be paid out of Contractor’s profit and overhead percentage.
Travel time to and from the job site for Contractor and his employees. Costs associated with travel time such as: gas, vehicle maintenance, mileage payments, vehicle insurance, etc.
Costs to purchase, repair, and maintain Contractor’s tools, vehicles, and equipment.
Cellular phone charges (unless specifically agreed to in writing by Owner and Contractor).
J. SUBCONTRACTS AND OTHER AGREEMENTS
Any portions of the work that Contractor chooses to subcontract shall be performed under appropriate agreements with Contractor.
Contractor will allow only skilled Subcontractors who are properly licensed and insured in accordance with the terms of this Agreement to perform work on this project.
K. ACCOUNTING RECORDS
Contractor shall keep full and detailed accounts and exercise such controls as may be necessary for detailed and responsible financial management of all aspects of this Agreement.
L. WORK PERFORMED BY OWNER OR OWNER’S SEPARATE CONTRACTORS AND MATERIALS FURNISHED BY OWNER
Contractor to supervise, coordinate, and charge profit and overhead at the rate of 20% on all the following: all Owner-furnished materials and the cost of the work of Owner’s separate contractors who are working on-site at same time as Contractor (any time in between when Contractor has commenced work and when the work is 100% complete by Contractor).
Exceptions to the Contractor charging profit and overhead on Owner-supplied materials and Owner’s separate contractors are strictly limited to the following:
M. CHANGES IN WORK AND ADDITIONAL CONTRACTOR’S FEE
During the course of the work, Owner may request Contractor to perform Additional Work (See Schedules). Owner may also alter the selection of products or building design. All such changes in the work will be performed by Contractor according to the terms and conditions in this Agreement.
In addition, Contractor will charge profit and overhead — either at the rate set in this Agreement or at the rate of 20% — on all Subcontractors designated by Owner to work on the project up until the point in time when Contractor has completed all of his work under this Agreement.
N. MISCELLANEOUS CONDITIONS
1. OWNER COORDINATION WITH CONTRACTOR:
Owner agrees to promptly furnish Contractor with all details and decisions about unspecified construction finishes, and to consent to or deny changes in the Scope of Work that may arise so as not to delay the progress of the Work. The cost of any delays in furnishing design decisions after construction has commenced will increase the contract amount consistent with any additional costs incurred by Contractor. Delays in furnishing design decisions after construction has commenced will also increase the contract time. Owner agrees to furnish Contractor with continual access to the job site.
2. INTEREST CHARGES:
Interest in the amount of 2 % per month will be charged on all late payments under this Agreement. “Late Payments” are defined as any payment not received within 30 days of receipt of invoice from Contractor.
3. CONTRACTOR NOT TO BE RELIED UPON AS ARCHITECT, ENGINEER, OR DESIGNER:
Contractor is not an architect, engineer, or designer. Contractor is not being hired to perform any of these services. To the extent that Contractor makes any suggestions in these areas, Owner acknowledges and agrees that Contractor’s suggestions are merely options that Owner may want to review with the appropriate design professional for consideration. Contractor’s suggestions are not a substitute for professional engineering, architectural, or design services, and are not to be relied on as such by Owner. Contractor is not responsible for ascertaining whether details in Owner’s plans conform to all applicable building and planning codes. Contractor is not responsible for the cost of correcting errors and omissions by Owner’s design professionals and separate contractors.
O. WORK STOPPAGE AND TERMINATION OF CONTRACT FOR DEFAULT
Contractor shall have the right to stop all work on the project and keep the job idle if payments are not made to Contractor strictly in accordance with the Payment Schedule in this Agreement, or if Owner repeatedly fails or refuses to furnish Contractor with access to the job site and/or product selections or information necessary for the advancement of Contractor’s work. Simultaneous with stopping work on the project, Contractor must give Owner written notice of the nature of Owner’s material breach of this Agreement and must also give Owner a 14-day period in which to cure this breach of contract. Owner to follow this same notice procedure with Contractor if Owner alleges Contractor is in material breach of this Agreement.
If work is stopped due to any of the above reasons (or for any other material breach of contract by Owner) for a period of 14 days and Owner has failed to take significant steps to cure his default, then Contractor may — without prejudicing any other remedies Contractor may have — give written notice of termination of the Agreement to Owner and demand payment for all completed work and materials ordered through the date of work stoppage and any other reasonable loss sustained by Contractor, including Contractor’s Profit and Overhead at the rate of 20% on the balance of the incomplete work under the Agreement. Thereafter, Contractor is relieved from all other contractual duties, including all Punch List and warranty work.
P. DISPUTE RESOLUTION
If any dispute arises with respect to or in connection with this Agreement or any work provided hereunder; written notice of such dispute shall be provided to the other Party within ten (10) business days of such dispute arising.
Within five (5) business days of notice being provided, representatives of the Parties shall meet and attempt to find a resolution to the dispute.
If the Parties are unable to resolve the dispute, either party may commence legal proceedings, including by, but not limited to, referring the dispute to adjudication in accordance with the Construction Act, RSO c. C-30.
The Parties agree that the Ontario Superior Court shall have exclusive jurisdiction forany and all disputes arising from or in connection with this Agreement, including, without limitation, the enforcement, interpretation or application of this Agreement, with the exception of any dispute which may be the subject of an adjudication pursuant to the
Construction Act, RSO c. C-30.
This Agreement shall be governed by and construed and interpreted in accordance with the laws of the Province of Ontario.
Q. INSURANCE
As a condition of entering into this Agreement, the Owner must obtain valid builder's risk liability insurance of no less than $1,000,000. The Contractor shall be entitled to inspect any such policy on demand. In the absence of adequate insurance coverage, the Contractor may elect to terminate the Agreement on notice to the Owner.
The Owner agrees that, prior to commencement of the Work, the Owner shall notify its insurer that the Contractor will be carrying out work at the Work Site and will disclose the value of this Agreement.
R. WARRANTY
Thank you for choosing our company to perform this work for you. Your satisfaction with our work is a high priority for us, however, not all possible complaints are covered by our warranty. Contractor does provide a limited warranty against material defects on all Contractor- and subcontractor-supplied labor and materials used in this project for a period of one year following Substantial Completion of all work. This warranty covers normal usage only. You must contact the Contractor at the address on page one of this Agreement in writing for warranty service immediately upon discovering an item in need of warranty service. If the matter is urgent, you must also call the Contractor and send written notice of the need for warranty service. Failure to notify the Contractor of the need for warranty service within ten days of discovery of a warranty item may void this warranty. Additionally, Owner’s hiring of others or direct actions by Owner or Owner’s separate contractors to repair a warranty item are not covered by this warranty and will not be reimbursed by Contractor.
No warranty is provided by Contractor on any materials furnished by the Owner for installation. No warranty is provided on any existing materials that are moved and/or reinstalled by the Contractor within the dwelling or the property (including any warranty that existing/used materials will not be damaged during the removal and reinstallation process). One year after Substantial Completion of the project, the Owner’s sole remedy (for materials and labor) on all materials that are covered by a manufacturer’s warranty is strictly with the manufacturer, not with the Contractor.
Repair of the following items and related damages of every kind are specifically excluded from Contractor’s warranty: problems caused by lack of Owner maintenance; problems caused by Owner abuse, Owner misuse, vandalism, Owner modification, or alteration; and ordinary wear and tear. Damages resulting from mold, fungus, and other organic pathogens are excluded from this warranty unless caused by the sole and active negligence of contractor as a direct result of a construction defect which caused sudden and significant amounts of water infiltration into a part of the structure. Deviations that arise such as the minor cracking of concrete, stucco, and plaster; minor stress fractures in drywall due to the curing of lumber; warping and deflection of wood; shrinking/cracking of grouts and caulking; fading of paints and finishes exposed to sunlight are all typical (not material) defects in construction and are strictly excluded from Contractor’s warranty.
S. ENTIRE AGREEMENT, SEVERABILITY, AND MODIFICATION
This Agreement represents and contains the entire agreement between the parties. Prior discussions or verbal representations by the parties that are not contained in this Agreement are not a part of this Agreement.
PROJECT-SPECIFIC EXCLUSIONS:
Any elements not explicitly detailed within the permitted architectural plans are excluded.
STANDARD EXCLUSIONS:
Unless specifically included in the “General Scope of Work” section above, this Agreement does not include labor or materials for the following work:
Plans, engineering fees, or governmental permits and fees of any kind. Additional work required by governmental plan checkers on final “Red Lined” Job Copy of plans that are yet to be issued.
Testing, removal and disposal of any materials containing asbestos (or any other hazardous material as defined by the EPA).
Custom milling of any wood for use in project.
Moving Owner’s property around the site.
Labor or materials required to repair or replace any Owner-supplied materials. Repair of concealed underground utilities not located on prints or physically staked out by Owner which are damaged during construction.
Surveying that may be required to establish accurate property boundaries for setback purposes (fences and old stakes may not be located on actual property lines).
Final construction cleaning (Contractor will leave site in “broom swept” condition). Landscaping and irrigation work of any kind.
Temporary sanitation, power, or fencing.
Removal of filled ground or rock or any other materials not removable by ordinary hand tools (unless heavy equipment is specified in Scope of Work section above), correction of existing out-of-plumb or out-of-level conditions in existing structure.
Correction of concealed substandard framing. Rerouting/removal of vents, pipes, ducts, structural members, wiring or conduits, steel mesh which may be discovered in the removal of walls or the cutting of openings in walls.
Removal and replacement of existing rot or insect infestation. Failure of surrounding part of existing structure, despite Contractor’s good faith efforts to minimize damage, such as plaster or drywall cracking and popped nails in adjacent rooms or blockage of pipes or plumbing fixtures caused by loosened rust within pipes; construction of a continuously level foundation around structure (if lot is sloped more than 6 inches from front to back or side to side, Contractor will step the foundation in accordance with the slope of the lot).
Exact matching of existing finishes.
Public or private utility connection fees. Repair of damage to roadways, driveways, or sidewalks that could occur when construction equipment and vehicles are being used in the normal course of construction. Cost of correcting errors and omissions by the owner’s design professionals and separate contractors.
Cost of correcting/testing/remediating mold/fungus/mildew and organic pathogens unless caused by the sole and active negligence of contractor as a direct result of a construction defect that caused sudden and significant water infiltration into a part of the structure.
Cost of removing ponding ground water or other unusual, concealed site conditions during excavation. Extra costs associated with refusal of caisson drilling, cave-ins, etc.
Cost to modify and/or remanufacture custom brackets and other custom-fabricated materials that are manufactured per plans and/or specifications but do not fit properly into the structure.
FEES FOR BUILDING PERMITS, PLANS, ENGINEERING & ARCHITECTURAL SERVICES, UTILITY CONNECTIONS, AND SPECIAL TESTING:
This Agreement does not include the cost of coordinating or submitting for the permits, fees, and services referred to above. If Owner requests Contractor to coordinate any of these services or obtain any of the permits above, Contractor will perform this work on an hourly basis at the hourly rate of: $100.00 per hour.
Owner (not Contractor) is to enter into contracts for all of the above-mentioned services and provide direct payment to the people or agencies contracted with for all of the services and permit fees in the paragraph above.
If Owner requests that Contractor meet with Owner and architect or other design professionals to review the construction plans and specifications prior to completion of the final design documents, Contractor will perform this work on an hourly basis at the hourly rate of: $80.00 per hour.
The Owner authorizes the Contractor to act as agent on their behalf with respect to (City/architect/designer/etc.), for which information can be released to the Contractor and/or the contractor can convey the Owner’s instructions to (City/architect/designer/etc.). Contractor will perform this work on an hourly basis at the hourly rate of: $100.00 per hour.