Engineering Management2D
Ethics and Legal Aspects - Theory & Concepts - Eng Mgmt Contract Types
Engineering ethics, CSR, contracts, liability, and intellectual property rights.
Open the complete lessonContract Types Explorer
Lump Sum (Fixed Price) Contract
The contractor agrees to complete the entire project scope for a single, fixed price.
Contractor Risk
High. If costs overrun due to bad estimates or slow work, the contractor absorbs the loss.
Owner Risk
Low. The final cost is known upfront, assuming no change orders.
When to Use:
When the scope of work is completely defined and detailed plans/specifications are fully finished before bidding.
Real-World Example:
"Building a standard tract home based on finalized architectural blueprints."