An agreement to do work for a specific price in construction is known as?

A contract is a legally binding agreement between parties where one party agrees to provide a service or a good, and the other party agrees to pay a specific price for that service or good. In the context of construction, a contract details the scope of work, the timeline, the price, and other terms that govern the relationship between the contractor and the client. By having this formal agreement, both parties have clear expectations, and it provides legal recourse should either party fail to meet their obligations.

On the other hand, a proposal refers to a plan or suggestion offered for consideration by the client but is not yet an agreement. An estimate typically provides an approximation of costs based on certain assumptions but does not constitute a binding agreement. A bid is a specific type of proposal made in response to an invitation to bid, which may lead to a contract if accepted but is itself not a contract until formalized. Thus, the defining characteristic of a contract is its binding nature, which encompasses the full agreement on the price and terms of work to be performed.