For example, imagine a construction company that enters into a fixed-price contract with a client to build a new office building. The contract specifies that the client will pay a fixed amount of $5 million for the completion of the project. Regardless of any unforeseen challenges or changes in the market, the agreed-upon price remains constant.

Fixed-price contracts are commonly used for the procurement of specific goods or limited-scope services. Common business examples include, but are far from limited to: The purchase of inventory or office supplies for a specific price The purchase of a vehicle or contract for vehicle repairs

What is a fixed-price contract example? A simplified version of a fixed-price contract could look like this: Project: Develop logo for Tree Lovers Orchard Vendor: JDK Creative Due Date: Two weeks (Due. March 1) Price: $2,000

These special types of fixed price contracts include: Firm fixed-price contracts Fixed-ceiling-price contracts with price redetermination Fixed-price contracts with economic price adjustment Fixed-price incentive contracts Firm fixed-price level-of-effort contracts