What is a contract type?

Common contract types

• Fixed price. One agreed price for a defined scope, whatever the supplier's actual cost. Suits construction and well specified software builds.
• Cost plus and cost reimbursement. The buyer pays approved costs plus a fee. Common in research and public sector work where scope is uncertain.
• Time and materials. Payment follows hours worked and materials used, which fits consulting and evolving projects.
• Unit price. A set price per unit delivered, used for recurring supply and facility services.
• Unilateral and bilateral. A unilateral contract binds one party once the other performs an act, such as a reward. A bilateral contract exchanges promises on both sides.
• Express and implied. Express terms are stated in words. Implied contracts arise from conduct.
• Commercial agreements. Sales agreements, master service agreements, vendor agreements and non disclosure agreements.

Why the type matters

The type decides who carries cost risk, how invoices should be checked and which clauses need attention. A fixed price contract puts overrun risk on the supplier, while time and materials needs rate caps and timesheet checks. An unconscionable contract, one so one sided that a court may refuse to enforce it, is a risk to spot before signing rather than a type to choose.

How Aavenir handles it

Contractflow starts each contract from a template for its type, so the right clauses, approvals and fields come with it. Aavenir AI reads the signed document and records the type, pricing model and key terms, so reports and invoice checks can tell a fixed fee from an hourly rate.