Types Of Contracts And Role Of Technology Essay

1115 Words Jul 29th, 2015 5 Pages
A contract is a legally binding agreement between two or more parties, which creates an obligation to provide certain services or products. Contracts play a vital role in virtually all business undertakings in that they establish the rights and obligations of the contracting parties. There are various types of contracts that business entities or government agencies can use to facilitate business relationship with other parties. Firstly, a firm fixed price contract is an agreement that provides for a price which typically not subject to any kind of adjustment unless specified provisions i.e. defective pricing or contract change are included in the contract. Secondly, cost-reimbursement contracts are types that provide for payment of allowable incurred costs, to the extent specified in the contract. Lastly, a cost-plus-fixed-fee contract is a cost-reimbursement contract that provides for payment to the contractor of a negotiated fee that is fixed at the creation of the contract. Technology plays a vital role in creation and enforcement of contracts. This essay seek to compare the three types of contracts and role technology plays in contracting.
Fixed price contracts contain in depth specifications and set price for the work to be delivered. The cost is usually negotiated before the contract is finalized and after that, the terms cannot be varied of changed regardless of whether other conditions surrounding the contracts change. Fixed price contracts are usually negotiated in…

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