Guaranteed Maximum Price Construction Contracts Explained | What Are Contingencies and Allowances?

We explain guaranteed maximum price contracts in #construction, including allowances, contingencies, schedules of values, and change orders in GMP contracts.
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[@nickdonovan2117]

This was very helpful, thank you

[@Learn-about-law]

Thanks for watching! Be sure to subscribe to our channel for more videos like this one!

[@ensurepaintingplusllc]

THANK YOU FOR SHARING THIS.... WONDERFUL KNOWLEDGE AND BREAKING EVERYTHING DOWN ANYTHING NEW ON THIS MATTER? SURPRISING ONLY THREE COMMENTS MUST BE PEOPLE DON’TCARE ABOUT QUALITY JUST FOCUS ON SAVING LOL

[@KlownVooDoo]

Awesome video! Thanks for the useful information!

[@alaelg9936]

very informative , thank you

[@reecemcdaniel8207]

Great video, thank you so much for the explanation of the difference between contingency and allowance. I was wondering if you had any input about where the contingency should be "held" or "stored" so that it isn't spent unless necessary. Should contractors have a separate account for this amount? Thanks!

[@Learn-about-law]

Thank you for your feedback. We are unable to advise you online but here is an article that may help www.oflaherty-law.com/learn-about-law/illinois-contract-law-changes. We hope this helps.

[@fructido]

Nice Video. Question, how does it works design errors or omissions in this GMP. Does the money can be get from contingencies or should it came from a change order or directly from the designer who had a miss.

[@conraywest]

That would be covered under owner's contingency if that is how contract was structured. Otherwise I would think it would be covered with a change order with contract time being adjusted accordingly from the design error.

[@conraywest]

Similar with scope creep

[@matrosovdeveloper]

Nice video. what if we have annual maximum price 50 000 and and hourly rate basis written in our contract. So let’s say somehow we delivered more services about $52 000 but not because we delayed or did not do smth, but because customers requested services per hours and we worked all these hours and then we figured out that we delivered more service over 50 000 budget. So we don’t have exact amount of items in contract what we have is just maximum amount of contract which is 50 000. But as we worked hourly per year we did more work which this 50 000 dollars contract can’t cover. But we worked more hours not because there is our fault. We just worked and then figured that customers provided more work for us annually and we completed all the task on time . Who is right then?

[@Learn-about-law]

Hi Alexander, thanks so much for your question. We can't get into the specifics of your case online, but please feel free to give us a call at 630-324-6666 to get in contact with one of our skilled attorneys.