Fixed Price Contracts
Fixed Price Contracts are a project management and contracting methodology where the total cost for a project or service is agreed upon upfront and remains unchanged regardless of actual time or resources expended. This approach shifts financial risk from the client to the contractor, requiring precise scope definition and estimation. It is commonly used in software development, construction, and consulting to provide budget certainty and simplify financial planning.
Developers should learn about Fixed Price Contracts when working in client-facing roles, freelancing, or managing projects to understand contractual obligations and risk allocation. This methodology is ideal for projects with well-defined requirements, stable scope, and predictable outcomes, such as building a specific feature or delivering a complete product. It helps ensure project budgets are controlled and reduces client uncertainty about costs.