For further information, e-mail David Crump or call him at 800-368-5242 x8491, or e-mail David Jaffe or call him at x8317.
ESCALATION CLAUSE FOR PANELIZED LUMBER
OPTION ONE
The house will require approximately ________ square feet of__________ (describe material – plywood, OSB, other). As of the date of this contract, the Builder’s cost of _________________ (describe material) is___________(price) per thousand square feet, based on ________________ _________________(describe basis for determining cost – name of supplier). The stated consideration to be paid under this contract is based on current material costs without margin for fluctuations in the price of ___________ (describe material). The current market for __________ (describe material) is considered to be volatile, and sudden price increases could occur. The Builder does agree to use his best efforts to obtain the lowest possible price from available building material suppliers. But, should there be an increase in the price of __________________ (describe material) purchased after execution of this contract for use in the construction of this house, in order to avoid inequities, the Owner agrees to pay this cost increase to the Builder. Any claim by the Builder for payment of a cost increase, as provided above, shall require written notice delivered by the Builder to the Owner stating both the increased cost and the source of supply, supported by invoices or bills of sale.
SPECIAL CIRCUMSTANCES – RIGHT OF TERMINATION
Should there be a rise in the cost of ___________(describe material), exclusive of any other price changes, that would cause the total contract price to increase by more than _____________(%) percent, the Builder shall, before making any additional purchase of _____________________ (describe material), provide to the Owner a written statement expressing both the percentage increase of the contract price and the dollar amount of the increase. The Owner may then, at his option, terminate this contract by providing within ______ business days both written notice of termination to the Builder and payment to the Builder for all costs expended in performance of the contract up to the date of termination, plus payment of a prorated percentage of profits based on the percent of completion. Should both notice of termination and full payment, as provided above, not be forthcoming within ________ business days, the Builder may proceed to purchase the _______________(describe material) at the increased price, and the Owner shall be required to pay the increased cost as provided herein.
ESCALATION CLAUSE FOR PANELIZED LUMBER
OPTION TWO
The house will require approximately ________ panels of__________ (describe material – plywood, OSB, other). As of the date of this contract, the Builder’s cost of ____________________ (describe material) is___________(price) per panel, based on ____________________________ _________________(describe basis for determining cost – name of supplier). The stated consideration to be paid under this contract is based on current material costs without margin for fluctuations in the price of ___________ (describe material). The current market for __________ (describe material) is considered to be volatile, and sudden price increases could occur. The Builder does agree to use his best efforts to obtain the lowest possible price from available building material suppliers. But, should there be an increase in the price of _______________ (describe material) purchased after execution of this contract for use in the construction of this house, in order to avoid inequities, the Owner agrees to pay this cost increase to the Builder. Any claim by the Builder for payment of a cost increase, as provided above, shall require written notice delivered by the Builder to the Owner stating both the increased cost and the source of supply, supported by invoices or bills of sale.
SPECIAL CIRCUMSTANCES – RIGHT OF TERMINATION
Should there be a rise in the cost of ___________(describe material), exclusive of any other price changes, that would cause the total contract price to increase by more than _____________(%) percent, the Builder shall, before making any additional purchase of _____________________ (describe material), provide to the Owner a written statement expressing both the percentage increase of the contract price and the dollar amount of the increase. The Owner may then, at his option, terminate this contract by providing within ______ business days both written notice of termination to the Builder and payment to the Builder for all costs expended in performance of the contract up to the date of termination, plus payment of a prorated percentage of profits based on the percent of completion. Should both notice of termination and full payment, as provided above, not be forthcoming within ________ business days, the Builder may proceed to purchase the _______________ (describe material) at the increased price, and the Owner shall be required to pay the increased cost as provided herein.
BuilderBooks.com Has Business Management Publications to Help Improve Your Profitability
BuilderBooks.com also offers a variety of publications about business management. To view or purchase these publications online, click here.
Want More Information About Effectively Managing Your Business?
NAHB’s Business Management Department offers a variety of online resources to help you run your business better and more profitably. Click Business Management Tools for articles about human resources, financial management, sales, production, technology, customer service and other business-related topics. In addition, visit the NAHB Software Users Network Discussion Forum (SUN) to ask technology consultants and other builders what they think of various software packages and applications.
Subscribe to NAHB’s Business of Building e/Source
NAHB’s Business of Building e/Source is your monthly electronic guide to the hot issues and emerging trends in home building business management. You’ll find practical advice, tricks of the trade and sound business guidance — all delivered monthly, straight to your desktop, in a quick and easy-to-read format. Business of Building e/Source is available free to NAHB members and their employees. To subscribe, click here on the members only side of www.nahb.org.
University of Housing Offers Courses on Customer Service and Business Management
The NAHB University of Housing offers a course on construction contracts management designed to help builders avoid future litigation. For a list of current business management offerings, click here.
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