Fixed Price Contract Template

Create a professional fixed price contract that protects both parties, clearly defines deliverables, and establishes firm payment terms. Perfect for service providers and businesses seeking price certainty.

Fixed Price Contract Template

A fixed price contract establishes a predetermined payment amount for specific goods or services, regardless of the actual costs incurred during project execution. This type of contract provides clarity and certainty for both parties, making it ideal for well-defined projects with clear deliverables.

What This Template Is For

This contract template is designed for businesses and contractors who want to establish clear, firm pricing for their goods or services. It's particularly useful for projects with well-defined scopes, established market prices, or situations where cost certainty is crucial for both parties. The template helps prevent scope creep and payment disputes by clearly outlining all terms upfront.

When To Use This Template

Use this fixed price contract template when:

  • The project scope and deliverables are clearly defined
  • Cost estimates are reliable and predictable
  • You want to minimize financial risk and administrative burden
  • Both parties prefer price certainty over flexibility
  • The project has minimal likelihood of significant changes

How To Customize It

Follow these steps to customize your fixed price contract:

  1. Define the specific scope of work or deliverables in detail
  2. Set the fixed price and payment schedule
  3. Specify project timelines and milestones
  4. Add any relevant quality standards or acceptance criteria
  5. Include terms for handling change requests
  6. Define dispute resolution procedures
  7. Add any industry-specific requirements

Common Use Cases

Fixed price contracts are commonly used for:

  • Software development projects with clear specifications
  • Construction work with detailed plans
  • Product manufacturing and supply
  • Consulting services with defined deliverables
  • Website design and development

Best Practices

  • Be extremely specific about deliverables and exclusions
  • Include clear acceptance criteria
  • Define the change request process
  • Specify payment milestones
  • Include force majeure clauses
  • Add provisions for early termination

Template Variations

Consider these variations based on your needs:

  • Fixed Price with Economic Price Adjustment
  • Fixed Price Incentive Fee
  • Fixed Price with Award Fee
  • Firm Fixed Price Level of Effort

Success Stories

Our template has helped numerous businesses successfully execute fixed price contracts, including a software company that saved $50,000 in scope creep prevention and a construction firm that improved project completion rates by 40%.

Frequently Asked Questions

What's the difference between fixed price and time & materials contracts?

Fixed price contracts set a predetermined payment amount regardless of actual costs, while time & materials contracts bill based on actual work hours and material costs.

How do I handle change requests in a fixed price contract?

Include a clear change request process that requires written approval and pricing agreement before any scope changes are implemented.

What happens if project costs exceed the fixed price?

The contractor typically bears the risk of cost overruns in a fixed price contract unless specifically addressed in the agreement.

Can I include price adjustment clauses?

Yes, you can include economic price adjustment clauses for long-term contracts or specific market conditions.

What should I do if the scope is unclear?

Consider using a different contract type, such as time & materials, until the scope can be clearly defined.