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In a fixed price contract the:
Suggested Answer: C
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In a fixed-price/lump-sum contract, the agreed price is fixed and generally not subject to adjustment based on fluctuations in costs, unless explicitly stated in the contract terms. Payment for adjustments in construction costs due to fluctuations in resource prices or delays is typically not allowed unless there is a specific provision for such adjustments, which is rare in fixed-price contracts. Therefore, the correct answer is C. In no situation.
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34 comments · newest first
TA
Talia
11 months ago
Surprised to see people think A is true, that's not how it works!
CA
Carla
11 months ago
C is definitely wrong, they don’t get paid for actual costs.
RE
Regenia
11 months ago
Wait, isn't it the owner who has the most risk in these deals?
GE
Gene
12 months ago
Totally agree, fixed price means the contractor is on the hook!
VI
Vince
12 months ago
B is correct, contractor takes on the performance risk.
SH
Shay
1 year ago
I’m leaning towards A, but I’m not confident. I thought fixed price meant the contractor had to deliver within the budget, which sounds risky.
FE
Felix
1 year ago
I feel like option C is wrong because fixed price contracts don’t pay for actual costs, right? It’s more about the agreed price.
HE
Helga
1 year ago
I remember practicing a question like this, and I think the owner has some risk too, but the contractor definitely has to manage performance.
CO
Cory
1 year ago
I think the contractor takes on a lot of the risk in a fixed price contract, so maybe option B? But I'm not completely sure.
CA
Carman
1 year ago
Wait, I'm confused. Isn't the whole point of a fixed price contract that the contractor gets paid a set amount regardless of actual costs? I'll have to review my notes on this.
LO
Louvenia
1 year ago
Okay, I've got this. In a fixed price contract, the contractor takes on the performance risk, so option B is the correct answer. I'm feeling confident about this one.
JO
Josue
1 year ago
Hmm, I'm a bit unsure about this one. I know fixed price contracts involve some risk for the contractor, but I can't quite recall the specifics. I'll have to think this through carefully.
DO
Dong
1 year ago
This seems like a straightforward question about contract types. I'll need to remember the key differences between fixed price and other contract structures.
DE
Devorah
1 year ago
Well, at least the contractor won't have to worry about going over budget. That's a silver lining, right?
DA
Danica
1 year ago
C) Contractor is paid for actual costs
SH
Sheron
1 year ago
B) Contactor assumes all the performance risk
AL
Alexia
1 year ago
A) Contractor has no risk in the project
KI
Kiley
1 year ago
C? Really? That's just plain wrong. In a fixed price contract, the contractor is paid a set amount, not actual costs.
PO
Pok
1 year ago
D seems a bit too extreme. The owner has some risk, but not all of it. I'm going with B.
KA
Karl
1 year ago
I'm also going with B. It seems like the most reasonable option for a fixed price contract.
MA
Mattie
1 year ago
Yeah, B seems like the most balanced choice. The contractor should have some risk in the project.
CH
Christiane
1 year ago
I think B is the best option too. It's important for the contractor to have some stake in the project.
LO
Lorrie
1 year ago
I agree, B makes more sense. The contractor should assume some performance risk.
AL
Allene
1 year ago
I was going to choose A, but I guess that wouldn't make much sense since the contractor is the one taking on the risk.
CH
Christiane
1 year ago
C) Contractor is paid for actual costs
LA
Lashaun
1 year ago
That's correct, the contractor takes on the risk in a fixed price contract.
NO
Noel
1 year ago
B) Contactor assumes all the performance risk
AU
Audria
1 year ago
I think B is the correct answer. In a fixed price contract, the contractor assumes all the performance risk.
BA
Barrett
1 year ago
Yes, the contractor bears all the performance risk in a fixed price contract.
JE
Jeannetta
1 year ago
That's correct, the contractor takes on the risk in a fixed price contract.
YU
Yun
1 year ago
I agree, in a fixed price contract the contractor assumes all the performance risk.
CE
Celeste
2 years ago
I'm not sure about that. I think the answer might be C) Contractor is paid for actual costs.
MA
Maxima
2 years ago
I agree with Alex. In a fixed price contract, the contractor takes on the risk of completing the project within budget.
AL
Alex
2 years ago
I think the answer is B) Contractor assumes all the performance risk.