Fixed-fee contract

A pricing structure where the client pays a single, predetermined total price for a defined scope of work, regardless of the actual hours the agency spends delivering it.

Example

A branding project is quoted at a flat $12,000 for a defined deliverables list, whether the agency ends up spending 60 hours or 90 hours completing it.

Why it matters for agencies

Fixed-fee contracts put all the margin risk of scope creep on the agency — every hour of unquoted work delivered under a fixed fee comes directly out of profit, with no automatic mechanism (unlike time-and-materials billing) to recover the cost. This makes a tight exclusions clause and fast change-order process especially important under this model.