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Project Management & Agile · Foundational

Contract Types

Categories of agreements that allocate risk between buyer and seller: fixed-price, cost-reimbursable, and time and materials.

Definition

Fixed-price places most cost risk on the seller; cost-reimbursable places it on the buyer; T&M is a hybrid suited to staff augmentation or unclear scope.

Example

A well-defined hardware buy uses fixed price; an R&D effort uses cost-plus.

Exam tip

Clear scope suits fixed price; unclear scope suits cost-reimbursable.

Related terms