Contingency

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An amount built into a price, or set aside by the customer, for the things that go wrong that nobody can see yet.

On a remodel, a contingency of ten to twenty percent of the price is the money for what is behind the walls. Some contractors build it into the price quietly; some put it on the bid as a line the customer only pays if it is used. The second is more honest and sells better.

A contingency is not a markup and not a profit. It is spent on the rotten subfloor or returned.

Related: Change order · Allowance

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