Construction Contracts for Florida Electrical Contractors
Pricing Types, Florida Statutory Rules and Standard General-Conditions Clauses
Florida Statutes 489.126, 489.1425, 489.128, 715.12, 725.06, 558.002/558.004, 672.201/206/319/509/602, 95.11 as displayed on Online Sunshine 2026-09-19; FAR 16.202-1, 16.301-1, 16.601, 16.603-1, 31.202-31.203, 52.211-12, 52.232-5, 52.236-2, 52.236-3, 52.236-21, 52.243-4, 52.246-21, 52.249-10 as displayed on acquisition.gov 2026-09-19 · Reviewed 2026-09-21
"Interpretation of Contracts and Agreements" is 4–6 questions on the Business exam. Two layers are tested: (1) the general-conditions vocabulary every construction contract uses — pricing types, change orders, specifications versus drawings, differing site conditions, liquidated damages, retainage, warranty, default — and (2) the Florida statutes that override whatever the paper says: deposits and start dates (489.126), the Recovery Fund notice (489.1425), prompt payment (715.12), indemnity limits (725.06), defect-claim notice (ch. 558), the UCC for material purchases (ch. 672) and the limitation periods (95.11). The public-domain Federal Acquisition Regulation clauses are used here as the model text for the general-conditions concepts; private-form general conditions (AIA, ConsensusDocs, EJCDC) follow the same logic.
1. Pricing types — who carries the cost risk
| Type | How the price works | Risk | Source model |
|---|---|---|---|
| Lump sum / firm-fixed-price | One price, not adjusted for the contractor's actual cost experience | Maximum risk on the contractor — full responsibility for costs and profit or loss; maximum incentive to control cost | FAR 16.202-1 |
| Cost-plus (cost-reimbursement) | Owner pays allowable incurred costs plus a fee; an estimated total cost acts as a ceiling | Cost risk mostly on the owner; contractor needs an accounting system that captures costs | FAR 16.301-1 |
| Time and materials | Labor hours at fixed hourly rates that already include wages, overhead, G&A and profit, plus materials at actual cost | Only when the extent or duration cannot be estimated; gives the contractor no profit incentive to control cost, so the owner watches the work and sets a ceiling price | FAR 16.601 |
| Unit price | Price per unit (per foot, per fixture) × measured quantity; contract sum = Σ (unit price × quantity) | Best when the quantity is uncertain but the unit of work is well defined | trade practice |
| Letter contract / letter of intent | A written preliminary instrument that lets the contractor start immediately while the full contract is finished | Interi |
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