Contracts & ExecutionQuestion 67 of 1605
Under a "time and materials" (T&M) contract, the owner pays:
a.A fixed price agreed upon before work starts
b.Only the material costs; labor is the contractor's responsibility
c.A set hourly rate with no material reimbursement
d.Actual costs of labor and materials plus an agreed markup or fee
Explanation
A T&M contract pays the contractor for actual labor hours at an agreed rate plus actual material costs, typically plus overhead and profit markup. The total cost is not fixed in advance.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)