Which type of contract allows the owner to know the total price for the project in advance?

A lump sum contract is characterized by a fixed total price for all work performed throughout the duration of the project. This type of contract allows the owner to have a clear understanding of the overall cost upfront, as the contractor agrees to complete the project for a specified amount. This predictability can be highly beneficial for budgeting and financial planning, as it eliminates unforeseen expenses related to labor, materials, and other factors that could arise during the project.

In contrast, a cost-plus contract involves the owner paying for the actual costs of labor and materials, plus an additional amount for contractor overhead and profit. This arrangement does not guarantee a total price beforehand, leading to uncertainty about the final cost. Time and materials contracts are similar, as they charge based on the actual time spent on the project and the materials used, both of which can fluctuate significantly. Lastly, a unit price contract involves payment per unit of work completed, which again does not provide a fixed total cost until the project's extent is fully realized.

This variability inherent in the other contract types makes the lump sum contract the most straightforward and predictable option for the owner when it comes to understanding total project costs in advance.