Contract Glossary
Fixed-Price Contract
Definition
A contract where the total price is set upfront and doesn't change regardless of actual costs incurred. The contractor takes on the risk of cost overruns; the client gets price certainty.
In Practice
If you're hiring someone to build you a website for $5,000, that's a fixed-price deal, even if they end up spending twice the hours they estimated. These work best when the scope is well-defined. Vague requirements + fixed price = guaranteed conflict. Make sure your scope of work is airtight before agreeing to a fixed price.
Common in these contract types
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