What is the difference between a fixed-price contract and a time and materials contract?

In Washington State, there are two main types of contracts used in construction law – fixed-price contracts and time and materials contracts. Each type of contract outlines different terms and conditions between the contractor, or the builder, and the customer. A fixed-price contract is a type of contract in which the customer agrees to pay a set rate for the full scope of the construction project. This type of contract requires the contractor to provide a specific set of services and materials for a fixed cost, regardless of how long the project takes to complete. This type of contract offers certainty and predictability in costs and can help to protect the customer from cost overruns. A time and materials contract is a type of contract where the customer agrees to pay for the materials and labor used on the project based on the current market rate. This type of contract is generally used when the scope of the project is not known at the beginning. The customer pays using an hourly rate and the contractor is responsible for determining the materials needed. This type of contract is riskier for the customer, since they could be subject to cost overruns if the project is more difficult than originally anticipated. Overall, each type of contract offers its own advantages and disadvantages to the customer and contractor. When choosing which type of contract is best for a specific project, it is important to weigh both the uncertainties and risks associated with each type.

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What is the difference between a fixed-price contract and a time and materials contract?

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