Fixed price or time and materials? Picking the right contract
How each engagement model shares risk between you and your development partner.
Fixed price
You agree on scope, timeline and price before work starts. It gives budget certainty and works best when requirements are clear. Changes are handled through estimated change requests, so it's worth investing time in a good specification first.
Time and materials
You pay for the time actually spent, usually with a monthly cap. It suits products that will evolve as you learn from users, because priorities can change every sprint without renegotiating a contract.
Dedicated team
A stable team works exclusively on your product. It's the most flexible model for long-running products and gives you the benefits of an in-house team without the hiring overhead.
A practical combination
Many clients start with a short fixed-price discovery and prototype, then continue with time and materials or a dedicated team once the product direction is proven. That keeps early risk low while leaving room to adapt.