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Q » What are the financial risks of using an Open Book (Cost Plus) contract?

Mark

17 Oct, 2025

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A » Using an Open Book (Cost Plus) contract in construction carries financial risks such as potential cost overruns, lack of price certainty, and limited motivation for the contractor to control expenses. This contract type can lead to disputes over what constitutes legitimate costs and may require rigorous auditing to verify expenses, potentially increasing administrative burdens and reducing financial predictability for the client.

Michael

17 Oct, 2025

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A »The financial risks of using an Open Book (Cost Plus) contract include potential cost overruns, lack of price certainty, and the risk of disputed costs. The buyer bears the risk of the seller's actual costs, which may exceed initial estimates. This can lead to budget overruns and disputes over reimbursable expenses.

David

17 Oct, 2025

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