In a construction contract, what is an allowance typically used for?

An allowance in a construction contract is essentially a sum of money set aside for a specific purpose, typically related to items or services that have not yet been fully specified or defined at the time of contract signing. This type of provision is commonly utilized to cover costs that are uncertain or variable, allowing for flexibility as the project progresses and ensuring that funding exists for unforeseen needs.

Allowances can apply to various aspects, such as materials that may not have been chosen yet or work that could require adjustments based on inspection findings. By incorporating an allowance, the contract acknowledges that certain elements of the project may evolve, making it essential for the contractor to have the financial resources to address these variables without holding up the project's timeline.

In contrast, the other options describe functions that are not aligned with the specific role of allowances. For instance, paying contractor fees involves predetermined payments and wouldn't fall under the uncertain categories that allowances typically cover, while estimating total project costs is more about projecting overall expenses rather than addressing variabilities in those expenses. Adjusting project schedules relates to time management and workflow rather than the financial uncertainties that allowances are meant to mitigate.