Under a "time and materials" (T&M) contract, the owner pays:
Explanation
A time-and-materials contract pays the contractor for the labour hours actually worked at an agreed rate, plus the actual cost of materials, plus an agreed markup or fee for overhead and profit; the total is not fixed in advance. A price fixed before work starts is a lump sum or stipulated sum contract, the opposite arrangement. Paying only for materials describes a supply-only purchase, not a construction contract. And an hourly rate with no material reimbursement is a labour-only or unit-rate deal, which leaves the contractor absorbing every material cost.
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