GLOSSARY TERM  
  Cost-Plus Contract  
 
  DESCRIPTION  
  A Contract where the Contractor is paid the actual cost of work undertaken, plus a percentage over and above those costs on account of margin and preliminaries. These contracts can be used when the total amount payable to the Contractor cannot be determined at the time of entering into the Contract, or the scope of work is unknown, and the Principal takes the risk of that cost. The use of Cost-Plus contracts is regulated by domestic building legislation in many States.