ENGAGEMENT

Fixed-Price

Signed SoW (Werkvertrag in AT/DE). Vendor is legally bound to deliver the named scope at the named price by the named deadline.

Last reviewed: byKevin Riedl wiki ↗

A fixed-price engagement transfers delivery risk from the customer to the vendor. The price is fixed before work starts. The scope is named in writing. The deadline is part of the contract. If the vendor goes over budget or over schedule, that is the vendor’s problem, not yours.

For this to be real and not theatre, the contract has to be a Werkvertrag (under AT/DE law) or its closest local equivalent. A Werkvertrag legally binds the vendor to deliver the work, not merely to provide effort, and the customer can withhold payment until the work is accepted. “Fixed price” as a verbal promise with a Time & Material contract underneath is not a fixed price; it is a marketing line. The underlying SoW is where the guarantee actually lives or dies.

Worked example: a vendor quotes “around 25k, fixed” but the SoW says “payment monthly against hours” and lists no acceptance criteria. That is T&M wearing a fixed-price hat. The honest version names the deliverable (“checkout flow live, passing acceptance tests A, B, C, by date X”), states the price, and puts the overrun risk on the vendor. If they will not write that down, the price is not fixed.

Wavect runs fixed-price for engagements where the scope is well-defined and the discovery work has already happened. For pre-discovery work we run a 2 to 3 week Discovery Phase first, which itself is fixed-price. The cost gets deducted from the build invoice if you continue with us.

The honest trade-off, and the most common founder mistake: forcing fixed-price onto genuinely uncertain scope. When the unknowns are large, a fixed-price vendor either pads the estimate by 30 to 100% to absorb the risk, or underbids and then cuts quality to stay in budget. Neither serves you. Do discovery first, fix the price on what you actually know, and keep the genuinely unknown parts on a different model. Wavect’s fixed-price guarantee means signed SoW (Werkvertrag), legally bound to deliver. It does not mean refund-if-we-miss-the-deadline.

Related: Fractional CTO Austria publishes fixed prices per tier.

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FAQs

That the vendor is legally bound to deliver the named scope at the named price. It does not mean a refund if the deadline slips, and it does not mean the vendor cannot raise change requests for new scope. Read the SoW; the guarantee lives in the language, not in the marketing.
When the scope is genuinely uncertain. Forcing fixed-price onto pre-discovery work makes the vendor pad the estimate by 30 to 100% to absorb the unknowns, or cut corners when reality bites. Do discovery first, then fix the price on what you actually know.
Yes. The two failure modes: a vendor underbids and cuts quality to stay in budget, or scope ambiguity in the SoW becomes a change-request war. Mitigate by checking past projects of similar size and by writing acceptance criteria precise enough to be testable.