Louisiana Contractors License Practice Exam

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What defines payment in a unit price contract?

  1. Payment per project completion

  2. Payment based on quoted price per unit of work

  3. Payment by hourly rates

  4. Fixed total amounts

The correct answer is: Payment based on quoted price per unit of work

In a unit price contract, payment is defined as being based on a quoted price per unit of work. This means that the contractor and client agree on a specific price for each unit of work performed, such as per square foot, per ton, or per cubic yard. This structure allows for flexibility, as the final contract price can vary based on the actual quantities of work completed. For example, if a contractor is hired to construct a road and the price per cubic yard of material is agreed upon, the total payment will ultimately reflect the actual volume of material used, not a fixed amount or hourly rate. This pricing method is beneficial for projects where the exact quantity of work required may fluctuate, allowing for a clear and straightforward calculation of costs based on project conditions.

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