time-and-materials
Definition
A time-and-materials contract is an agreement where you pay a contractor for the actual hours they work plus the actual cost of any materials or supplies they use. Unlike a flat-fee contract, the final price is not set in stone upfront because it depends on how long the job actually takes and what supplies end up being needed. This type of contract is common for projects where the full scope of work is hard to predict at the start.
Example
You hire a plumber to fix a mysterious leak, and instead of quoting you a flat fee, they charge you their hourly rate for every hour worked plus the cost of any pipes, fittings, or other parts they need to buy. If the job takes three hours and requires fifty dollars in parts, that is exactly what you pay.
Watch Out
Without a cap or maximum price written into the contract, your costs can grow far beyond what you expected if the project takes longer or requires more materials than originally estimated.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.