Under article 2 of the uniform commercial code, any contract for the sale of goods in excess of $500 is not enforceable unless there is a writing signed by the party to be charged the uniform commercial code applies in the united states it is a state law, but has been adopted by all 50 states.
Cost reimbursable contracts - these type of contracts are aimed at de-risking the sellers from cost point of view when the scope of work is not clearly known at the start and can change as the work progresses in such contracts, sellers are paid the actual cost incurred to accomplish the work along with seller's profit. Which has more cost risk to the seller, a fixed-price contract or a cost-reimbursable contract why how might that risk be mitigated (points : 12. Plan procurements - which party has the most and least risk in a fixed price (fp) type contract 429 seller sometimes accepts a high level of risk as seller needs to add huge reserves in price to cover their risks. 1 fixed price (fp) at the start of the contract, the buyer knows how much payment has to be made to the seller buyer liability is fixed hence, we can say that the buyer has very low cost uncertainty at the start of the contract, the seller does not about about the quantum of profit the seller may lose money.
Even though a fixed-price contract may cost a buyer more money up front, the buyer has the ability to budget for the costs of the contract and ensure that it has enough funds to fulfill its end of. A cost-reimbursable contract is a variant of a contract that involves making a payment from the buyer to the seller in reimbursement for the seller’s actual costs added to that is a fee that typically represents the seller’s profit.
A cost plus fixed fee contract has the highest risk for the buyer, because this provides a payment to the seller of seller of actual costs plus a fixed fee which is determined in the contract so, the seller doesn't have any incentive or award even if he meets certain deadlines or not. Time and material contracts is a type that is somewhere between cost reimbursable and fixed price it is a contractual agreement that specifies the price based on a per-hour or per-item basis only without fixing the total amount a ceiling price may be put in the contract the risk is similar on both seller and buyer. Procurement management (chpt 12) mulcahey, sixth edition fp is the most common type of contract buyer has the least cost risk provided buyer has a completely defined scope a cr contract is used when the exact scope of work is uncertain and costs cannot be estimated accurately to use a fixed price contract buyer to pay seller.
Pm 598 final exam contract and procurement 37 tco’s 100% correct keller 1 (tco h) what is the maximum value of a verbal contract (points: 5) in general, oral contracts are enforceable, but there are a number of exceptions. Fixed price contract is the one in which the seller receives a lump sum from the buyer for the goods or services being procured the buyer agrees on the price with seller and regardless of the effort and time put by the seller in the project, the buyer makes the payment of the agreed amount. Types of contracts and risk a question you are working for a the government has decided to outsource this project as a fixed price contract who has more risk for this project defense contractor hence, we can say that the seller has some degree of cost uncertainty both the buyer and the seller share the risk can you find out who. Even though a fixed-price contract may cost a buyer more money up front, the buyer has the ability to budget for the costs of the contract and ensure that it has enough funds to fulfill its end of the agreement. A type of cost-reimbursable contract where the buyer reimburses the seller for the seller’s allowable costs (allowable costs are defined by the contract) plus a fixed amount of profit (fee) cost plus incentive f ee (cpif) c ontract.
A type of cost-reimbursable contract where the buyer reimburses the seller for the seller’s allowable costs (allowable costs are defined by the contract), but the majority of the fee is earned based only on the satisfaction of certain broad subjective performance criteria defined and incorporated into the contract a fixed fee puts more risk on the buyer because the seller gets the same fee regardless of the capability to meet the target cost. A cost-reimbursable contract is a variant of a contract that involves making a payment from the buyer to the seller in reimbursement for the seller’s actual costsadded to that is a fee that typically represents the seller’s profit.
At the start of the contract, the seller knows that the buyer will reimburse all legitimate costs in addition the seller will also get agreed fees the seller likely to make always make some profit in a pure cp contracts. With a cost-reimbursable contract, the buyer has the most cost risk because the total costs are unknown the seller provides an estimate to the buyer the buyer can use the estimate for planning and cost management purposes, but it is not binding. -seller has a strong incentive to control cost-buyer knows total price before work starts-less work for buyer to manage-companies have more experience with this type of contract. A buyer and seller enter a fixed-price contract by agreeing on the final cost of a good or service, which is set by the contract both parties sign and agree to honor.