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Construction Glossary >
Unit Price Contract
Construction glossary

What is a Unit Price Contract?

A Unit Price Contract is a type of contract commonly utilized in the construction industry. This contract is based on the anticipated quantity of the items indicated in the project by the client. The contractor provides a unit price for each individual item and the final contract price is then determined by the calculated quantity of each item multiplied by its unit price. This contract is most beneficial in projects where the quantities of needed materials cannot be accurately determined beforehand. It enables flexibility as the total cost adjusts based on actual quantities, thus avoiding overruns. One potential downside is an unpredictability of the final cost for the client, as it will change if the quantities vary from the original estimates.