Definition, Meaning & Synonyms

fixed-price

Adjective

/fɪkst praɪs/

Definition

A fixed-price contract or agreement sets a specific price for goods or services that will not change regardless of the costs that may arise during the project.

Examples

The contractor has a fixed-price agreement with the client.
In a fixed-price project, any extra costs must be absorbed by the contractor.
This type of pricing can provide stability for budgeting.

Meaning

Economically, a fixed-price agreement means that the seller must bear the risk of any cost overruns, and it is often used in business transactions to provide certainty to both parties.