What is Fixed-price contract?
A fixed-price contract is an agreement in which a software vendor delivers a defined scope of work for a set total price, regardless of the hours it actually takes. It works best when requirements are clear and stable, since changes usually need a formal change request and a revised price.
Why it matters for your business
Fixed pricing gives buyers budget certainty and shifts estimation risk to the vendor, but it needs detailed requirements upfront and can make mid-project changes slower and costlier.
A company commissions a marketing website with eight defined page templates and a content management system for a fixed fee, with any additional templates quoted separately.