What kind of contract provides a set price for deliverables?

A fixed-price contract is structured to establish a predetermined price for deliverables regardless of the actual costs incurred by the contractor. This type of contract provides clarity and predictability for both parties, as the buyer knows the exact amount they will pay, and the seller understands the revenue they will receive for their work.

Fixed-price contracts are often used when the scope of work is well-defined, allowing the contractor to estimate costs accurately. This arrangement incentivizes the contractor to complete the work efficiently because any cost overruns must be absorbed by them. It also protects the buyer from unexpected increases in project costs, making it a popular choice for many projects where budget certainty is crucial.