By: Taylor Moroz and Troy Baril

Construction projects in Saskatchewan have a way of teaching people the same lesson quickly. The contract you sign at the beginning often matters far more than the parties initially anticipate, and they truly only understand this once the project is underway and an issue arises.

At Procido LLP, we see this play out regularly. Owners think they are buying a building. Contractors think they are pricing defined work. Engineers and consultants assume everyone is aligned on scope. Then reality shows up in the form of change orders, delays, weather, labour shortages, and unexpected site conditions.

Most disputes do not come from bad intentions. They come from the wrong contract being used for the job. Here are some of the most common construction contract structures used in Canada, and what they actually mean in practice.

Stipulated Price Contracts (or “lump sum” contracts)

This is the most familiar model in Canada and the one most people assume they are getting when they say “fixed price contract.”

In simple terms, the contractor agrees to build the project for a set price based on the drawings and specifications provided at tender time. In Canada, these contracts are often based on standard forms from the Canadian Construction Documents Committee, commonly referred to simply as CCDC contracts.

It sounds straightforward, and sometimes it is. But only when the scope of work is truly clear.

Where things usually get complicated is not the price. It is the parties’ understanding  of the scope of work.

If something is shown in a drawing but not described in the specifications, or described vaguely but not detailed properly, you end up in the familiar dispute of whether it is included or whether it is extra.

What owners like about this model is predictability and cost certainty. What contractors like about it is the ability to earn well if they priced the risk correctly. What neither party likes is how quickly it turns into a debate about change orders.

Unit Price Contracts

Unit pricing is the backbone of municipal and infrastructure construction in Canada.

Instead of pricing the entire project as a single amount, the contractor provides a price per unit of work. That might be per cubic metre of excavation, per metre of pipe installed, or per tonne of asphalt placed.

The project cost then depends entirely on the actual quantities used to complete the project.

This model works well when you know the type of work, but not the exact volume.

It is practical and flexible, but it comes with a trade-off. Nobody knows the final price at the beginning. Everyone is working from estimates.

That uncertainty is manageable on the right type of job, but it becomes a problem when the owner expects budget certainty that the contract was never designed to provide.

Time and Materials Contracts

Time and materials contracts are what people reach for when the scope is unclear but the work needs to start.

The contractor is paid for labour at agreed hourly rates and reimbursed for materials, usually with a markup.

These contracts are common in repair work, renovation projects, emergency situations, and any scenario where it is not realistic to define the full scope in advance.

They are flexible and practical, but they shift cost risk heavily onto the owner.

That is why in Canada, most well drafted time and materials contracts include a ceiling or not to exceed amount. Without that, the owner is essentially agreeing to an open ended financial commitment.

Disputes under these contracts usually do not involve whether work was done. They involve whether the time spent was reasonable and whether the charges match the agreement.

Cost Plus Contracts

Cost plus arrangements are often used when the project is moving forward before everything is fully designed or defined.

The contractor is reimbursed for actual costs and then paid a fee or percentage on top.

In theory, this creates alignment. The contractor is not incentivized to cut corners, and the owner can move forward without waiting for full design completion.

In practice, everything depends on documentation.

If the records are clean and transparent, cost plus contracts can run smoothly. If they are not, they become difficult to audit and even harder to defend if a dispute arises.

These contracts live and die on cost tracking discipline.

Design Bid Build

This is the traditional Canadian procurement model and still the most common, especially in the public sector.

The owner hires a designer first, fully develops the design, and then tenders the construction work.

It is structured, competitive, and familiar to everyone in the industry.

The advantage is clear pricing at the tender stage. The downside is that contractors are not involved in the design process, which can lead to buildability issues or change orders once construction begins.

Most construction disputes in this model come down to one question. Was the issue truly a change, or was it already included in the original scope of work?

Design Build Contracts

Design build shifts responsibility into a single contract. One entity is responsible for both design and construction.

This model is increasingly common in Canada, especially for institutional projects and larger commercial developments.

The biggest advantage is speed. Design and construction can overlap, which compresses the schedule significantly.

The tradeoff is control. Owners give up some design oversight in exchange for efficiency and single point responsibility.

When it works well, it works very well. When it does not, it is usually because the owner did not define performance expectations clearly enough at the outset.

Construction Management and CM at Risk

Construction management has become a major delivery method in Canada, particularly on complex or fast moving projects.

There are two versions.

In the advisory model, the construction manager acts as a consultant. They help with budgeting, scheduling, and coordination, but they do not carry construction risk.

In the “at risk” model, the construction manager effectively steps into the role of contractor and often works with a guaranteed maximum price.

This model blends flexibility with structure, but it requires careful drafting. If roles and risk allocation are not clearly defined, responsibility becomes difficult to untangle when problems arise.

How legal counsel can help on construction projects in Saskatchewan

Construction disputes rarely arise from a single issue. More often, they develop from unclear scope, mismatched expectations, and contract structures that do not reflect how the project actually unfolds. Addressing these risks early through proper contract drafting and procurement planning can significantly reduce the likelihood of disputes later in the project.

When issues do arise, legal counsel can assist with interpreting contract terms, advising on change orders and payment disputes, and helping parties understand their rights and obligations under Saskatchewan’s construction law framework, including lien rights and statutory holdback requirements.

At Procido LLP, we work with owners, contractors, and developers across Saskatchewan on construction contracts, procurement strategy, and dispute resolution. Please contact Troy (troy.baril@procido.com) or Taylor (taylor.moroz@procido.com) to schedule your initial consultation and receive a cost estimate for your matter.

Disclaimer

This article is provided for informational purposes only and does not constitute legal advice. While efforts have been made to ensure accuracy, Procido LLP does not warrant or guarantee the completeness, accuracy, or applicability of the information to any particular situation. You should obtain legal advice specific to your circumstances before taking any action. For specific legal advice, please contact Procido LLP (www.procido.com) directly.