Types of Commercial Contracts Law and Legal Definition
There are different types of commercial contracts. For Example:
Definite quantity contract – This type of contract provides for delivery of a specific quantity of supplies or services at designated locations for a fixed time.
Firm-Fixed-Price Contract – In this type of contract, the price is not subject to any adjustment on the basis of the contractor's cost in performing the contract. The contractor, in this contract is under huge riskand has to take full responsibility for all costs and resulting profit or loss. The contractor has to control costs and perform efficiently.
Fixed-Price Contract - Fixed-price contracts provides for an adjustable price including a ceiling price and a target price. Usually, the ceiling price or target price is adjusted only by operation of contract clauses providing for equitable adjustment or other revision of the contract price under circumstances stated in the contract.
Time-And-Materials Contract – This type of contract provides for acquiring supplies or services on the basis of direct labor hours at fixed hourly rates including wages, overhead, general and administrative expenses, and profit. It also considers materials at cost, including appropriate material handling costs as part of materials costs.