fbpx
Do you need customer support or technical assistance? Click here to submit a support ticket...

TOPIC: Contract Types-Risk to Buyer/Seller

Contract Types-Risk to Buyer/Seller 4 years 1 month ago #23587

  • Contract Types-Risk to Buyer/Seller
  • Contract Types-Risk to Buyer/Seller's Avatar Topic Author
  • Visitor
  • Visitor
Which contract types are most riskiest for Buyer and Seller?

Fixed Price contracts /Cost reimbursable Contracts/Time and Material Contracts.

Contract Types-Risk to Buyer/Seller 4 years 1 month ago #23607

  • Devin
  • Devin's Avatar
  • Offline
  • Expert Boarder
  • Expert Boarder
  • Posts: 93
  • Karma: 10
  • Thank you received: 52
Generally, fixed price contracts are less risky for the buyer, the buyer loses profit when unit prices rise between execution and delivery. Cost plus type contracts are often riskier for the buyer because prices can rise between execution and delivery. Now in reality, neither is inherently more risky because contracts are often written in a way that the risk is often born evenly.

Time and materials is somewhere in between, often for shorter duration work or staff augmentation.

Hope this helps.
Moderators: Yolanda MabutasMary Kathrine PaduaJohn Paul BugarinHarry ElstonJean KwandaDaniel SoerensenAlexander AnikinElena ZelenevskaiaBrent Lee

OSP INTERNATIONAL LLC
OSP INTERNATIONAL LLC
Training for Project Management Professional (PMP)®, PMI Agile Certified Practitioner (PMI-ACP)®, and Certified Associate in Project Management (CAPM)®

Login