A fixed-fee contract is an agreement between a homeowner and a contractor to complete a project for agreed-upon set amount. This type of contract allows for greater certainty when it comes to budget planning and helps to eliminate any surprises or hidden costs that are often associated with residential projects of this nature.
A fixed fee contract typically includes an itemized list of expected expenses such as materials, labor, and any other job-related costs; these items are then priced out based on current market rates and standardized industry practices. The contractor is then responsible for completing the work according to these specifications while keeping within the set budget. Unlike other contracts which may require periodic payments or allow for change orders, this type of contract requires only one payment which must be paid in full upon completion of the project. This way, both parties can remain confident that their financial obligations have been met without any delays or unexpected costs.