Question

In ______________ type of contracts, contractor agrees for the fixed price of the contact or fixed rate per unit
1.Flexible contracts
2.Contributing contracts
3.Cost plus contracts
4.Fixed Price contracts

Answer 1

The correct answer is OPTION 4: Fixed Price Contracts.

• Fixed-price contracts, also known as firm-price or lump-sum contracts, are agreements between two parties that specify both the goods or services to be provided and the money to be paid for them.
• They are equivalent to supermarket prices in certain ways.
• A loaf of bread's price is typically the amount paid by the client after taxes.
• Fixed-price contracts are suitable when the scope of a project can be established ahead of time and the materials and labor costs required to meet the contract's requirements can be calculated with reasonable certainty.
• Even if more goods or time are required than expected, the provider is nevertheless paid the same amount.