Fixed Price

A type of pricing clause included in a contract where a specified amount is paid for a specific product, service, or goal. In a fixed-price compensation method the buyer and supplier agree in advance to a "price." The fixed price may relate to an individual transaction (e.g., price per call, per minute, per FTE, per unit, per shipment, per square foot, etc.) or to a bundled set of transactions together (e.g., fixed monthly management fee to manage IT maintenance.) See also Firm Fixed Price.