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Time And Materials
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Prepared for:

Prepared by:
[Sender Company]
Time and Materials Contract
This Time and Materials Contract (hereinafter referred to as the "Contract") is entered into and shall be effective as on [Date] (hereinafter referred to as the "Effective date")

By and Between
[Sender Company], (hereinafter referred to as the “Company”), residing at [Address] and;

[Contractor Name], (hereinafter referred to as the “Contractor”), with principal office at [Address].

The Company and the Contractor are collectively referred to as the "Parties" and individually as "Party".

WHEREAS the Company desires for the Contractor to provide time and materials for [Mention Purpose].

WHEREAS the Contractor agrees to provide such time and materials to the Company for [Mention Purpose].

THEREFORE, in consideration of the mutual covenants and commitments contained herein, the Parties do hereby agree as follows.
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Terms and Conditions

1. Contractor's Responsibility

The Contractor hereby agrees to provide the time and materials defined in this Contract:
Scope of Work
[Mention details]
[No. of labour hours] hours
[Mention materials]

2. Work Completion Schedule

The Contractor shall plan and execute the work in accordance with a detailed schedule mutually agreed upon by the Parties.
1. [Mention Schedule]

3. Term

This Contract shall be effective as of the Effective date and shall continue for [time period] years unless terminated early or extended by mutual written consent between the Parties or by the provisions of this Contract.

4.Supply of materials and inspection

In the event where the Company's representative fails to inspect the materials on the due date, the Contractor shall perform the said test or inspection and the materials shall be deemed to be automatically accepted. If the performance figures so obtained on any such test are outside the limits specified, the Company is entitled to reject the materials. The materials shall be manufactured according to Contractor's standard procedures including careful inspection; and wherever practicable, shall go through Contractor's standard tests before despatch. The Contractor shall invite the Company to witness contracted tests or any specific test, giving a minimum of [Number of Days] days written notice.

5. Delivery

In the event that there are multiple deliveries agreed in the Contract, the Contractor may deliver the materials by installments, which shall be invoiced and paid for separately. Any delay in delivery or defect in an installment shall not entitle the Contractor to cancel any other installment.
The Contractor shall ensure that each delivery of the materials is accompanied by a delivery note that shows all relevant Contractor and Company reference numbers, the type and quantity of the materials (including the code number of the materials, wherever applicable).

6. Time is of the Essence

This Contract shall commence on the day specified and shall continue until the due or prior to the set due date. Any delay incurred by the Contractor which is found to be unreasonable shall be considered a breach of this Contract and the Company shall impose a fine of $[0.00] for such a delay.
7. Representation and Warranties
1. The Contractor hereby represents that they have the expertise, knowledge, and experience needed to provide the materials outlined in this time and materials contract.
2. The Contractor agrees to uphold all laws and legal requirements of the state of [Commission State].
3. In addition, the Contractor shall:
a. Conform to all material respects with their description and any applicable specification.
b. Ensure defect-free material in terms of design, material, and workmanship.
c. Be of satisfactory quality according to Contractor standards.

8. Rates

The Contractor agrees to such standard pre-determined rates set by the Company. The following rates shall imply unless otherwise mutually modified by both parties.
[Mention material 1]
[Mention material 2]

9. Payment

The maximum budget for the scope of work is $[0.00]. The time and materials described herein shall not exceed the maximum budget under no circumstances. All the payments and transactions shall take place in USD through [Payment mode]. The payment shall be due upon receipt of invoice by the Company. Invoices shall be issued on shipment and the Company agrees to pay such invoices when due. If invoices are not paid by the due date, the Company will have a $[00.00] % per month late payment charge assessed against any unpaid balance from the due date of the invoice until the date of payment. The contractor reserves the right to disallow any pricing discounts or hold any shipment during any period when outstanding invoices become or remain past due.

10. Tax

Prices for materials are exclusive of [all local, state, and federal taxes, including, without limitation, taxes on manufacture, sales, receipts, gross income, occupation, use, and similar taxes]. The Company agrees to pay such taxes and other payments, directly or to reimburse Contractor for all such taxes. Where applicable, such tax or taxes shall be added to the invoice as a separate charge or invoiced separately.

11. Security Interest

The Company shall grant to the Contractor, a security interest, in all of Company's right, title, and interest in the materials and products sold hereunder, to secure the purchase price payment and the performance of obligations, when due upon the Company as per this Agreement.

12. Ownership Rights

The Contractor continues to be the sole and exclusive owner of any materials, data, ideas, or inventions shared with the Company during the term of this Contract. The Contractor has no right to use this proprietary information except to render the services as per Company requirements.

13. Relationship of Parties

The Contractor, in the performance of this Contract, shall act in the capacity of an independent contractor and not as a partner, agent, or employee, of the Company.

14. Limitation of Liability

In no event shall either Party be liable to the other party or any third party for any damages or any special, indirect, or consequential damages, that might result from any part of this Contract such as, but not limited to, loss of profit, revenue, or failure in the delivery of services.

15. Assignment

Neither party may assign this Contract or the rights and obligations thereunder to any third party without the prior express written consent of the other Party which shall not be unreasonably withheld.

16. Confidentiality

All confidential information that is communicated to or obtained by either of the Parties in connection with the above-mentioned services, shall be held by them in full faith. At no time shall the Parties use any such confidential information obtained through this association, either directly or indirectly, for personal benefit, or disclose or communicate such information to any third-party. This provision shall continue to be effective after the termination of this Contract.

17. Indemnification

Each Party indemnifies and holds the other Party and its authorized persons harmless from and against all claims, liabilities, losses, damages, costs, and expenses, suffered or incurred by them arising out of or in connection with this Contract unless there is an act of gross negligence, wilful misconduct or bad faith by either party.

18. Arbitration

In the event of any dispute arising in and out of this Contract between the Parties, it shall be resolved by Arbitration. There shall be [Number of Arbitrators] Arbitrators which shall be appointed by [Party Name]. The venue of Arbitration shall be [Venue/Location of Arbitration] and the seat shall be [State]. The Arbitrators' decision shall be final and will be binding on both the Parties.

19. Miscellaneous

1. Severability: In the event, any provision of this Contract is deemed to be invalid or unenforceable, in whole or part, that part shall be severed from the remainder of this Contract and all other provisions shall remain in full force and effect as valid and enforceable.
2. Governing Law: This Contract shall be governed by and construed in accordance with the laws of the [State] without regard to conflict of law principles. If the disputes under this Contract are not resolved by Arbitration, the disputes shall be resolved by litigation in the courts of the [State/Court/Region] including the federal courts therein and all the Parties consent to the jurisdiction of such courts, agree to accept service of process by mail, and hereby waive any jurisdictional or venue defenses otherwise available to it.
3. Force Majeure: Neither of the Parties shall be liable for any failure in performance of any obligation under this Contract due to causes beyond that Party's reasonable control (including and not limited to any pandemic, fire, strike, act, or order of public authority and other acts of God) during the pendency of such event.
4. Entire Agreement: The Parties acknowledge that this Contract sets forth and represents the entire Contract between both the Parties. If the Parties are willing to change/add/modify any terms, they shall be in writing and signed by both Parties.
5. Notice: Any notice that is required by this Contract shall be in writing and shall be given to the appropriate party by personal delivery or certified mail, postage prepaid, or any such delivery service provided.
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Acceptance and Signature

The Parties agree to the terms and conditions set forth above as demonstrated by their signatures as follows:

[Sender Company]
Assign signer 1
Assign signer 1
Assign signer 1
Assign signer 2
Assign signer 2
Assign signer 2
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DISCLAIMER: Revvsales, Inc is not a law firm. The content provided herein is for general information purposes only, and does not constitute legal advice. Revvsales, Inc and its partners make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any information mentioned hereunder. The use or reliance of any information contained herein is for your personal use and solely at your own risk. You agree to fully release and indemnify Revvsales, Inc from any liability associated with the use of this content. You are advised to obtain independent legal advice before taking or refraining from any action on the basis of the content provided here.

Free Time And Materials Contract Template

Refer to our time and materials contract to ensure you stay within budget and set accurate legal terms. Customize and create the best version. Use now!

How to navigate an effective time and materials contract?

Inflation may leave you confused while choosing the right pricing models for your business or project. It is crucial to know about such models to ensure you choose the right type of pricing contract. There are two primary pricing models, which you may choose from:

  • Fixed-price model

  • Time and materials model

The operational workflow, functionality, and overall budget play a key role in selecting the perfect pricing model for your needs.

Thus, decide your payment terms after you have made the appropriate choice. Your pricing model establishes the type of contract you wish to secure. For instance, in a fixed-price contract, you agree to pay the contractor a lump sum amount. This kind of arrangement may be ideal for software companies. Their project roadmaps are usually pre-fixed, with the internal timeframe and milestones displayed. Therefore, the contractor agrees to complete such projects within set deadlines at a fixed rate.

On the other hand, in a time and materials contract, you do not define the final estimations of your project or business. Usually, construction companies benefit from such a model, as setting final estimates may get difficult. Therefore, the contractor or subcontractor is paid as per the materials and hours invested. This process is transparent, as you can verify the invoice and time logs to ensure correct costs. Hence, the scope of disputes is less. You will no more be guessing where your money is flowing.

Let’s know more about the time and materials contract.

What is a time and materials contract?

A time and materials contract is a binding agreement, signed between contractors and companies, in need of labor hours and materials. Such a contract (also known as a T&M contract) may also be known as a cost-plus contract. It is commonly preferred by owners or companies, due to its convenience and flexibility.

When to opt for a time and materials contract?

The T&M contract is perfect for the following cases:

  • Projects with a developing set of requirements

  • Projects unsure of the exact scope of work

  • Projects that need flexibility, as per the changing market requirements

  • Projects based on untested business models

  • Projects under a tight time limit

  • Projects in need of constant monitoring and transparency to track the development of each phase

Generally, this model fits most project or business requirements. So let’s take a closer look at the benefits of the T&M approach in detail.

Why choose the time and materials model?

The following points provide the key benefits of the time and materials model.

  • More flexible: You can modify the project’s requirements and form, as per the market scenario. Hence, revising such contracts is not needed, as the scope of work can be altered without re-negotiation.

  • Return on investment: When you pay on an hourly basis, the project priorities align with your needs. The contractor works on things that are important to you. Also, it helps you keep a check and provide feedback, as per the changing industry patterns.

  • Fast: It may take time to define your entire scope of work before you get started. Hence, this model allows you to start fast with a tentative plan and decide the final requirements along the way.

  • Pay for the work done: You pay for the actual work completed as per the invoice. If you wish the invoices to be under your budget, specify accordingly. This keeps you in control of the finances. If more work is required above your outlined budget, negotiate accordingly.

  • Limits risk: As the process is transparent, you are involved in each step. You ensure the work is completed as per the set deadlines. Thus, reducing the scope for uncertainties.

Things to consider while drafting a time and materials contract

Keep in mind these possibilities before making such a type of contract.

  • Losing control: When we proceed without a concrete plan, at the beginning of the project, it can get expensive. Even after we set a budget, if the work is pending, the costs may increase.

  • Project delay: If you do not fulfill the funding requirements, then the project completion might be delayed.

  • Disputes: Since payment is upon receipt, arguments may arise if you cannot pay on time.

  • Lack of knowledge: If you do not understand the project circumstances well, disagreements will happen. This may create a bitter situation. It’s best to understand your contractor’s perspective and discuss it patiently.

  • Profits: You must ensure the profit margin is appropriate. This will create motivation in your contractor, to deliver the best results.

Contract terms

Mentioned below, are a few key terms and conditions that should be included in your time and materials contract.

  • Introduction: Here, you summarize the essential elements of your contract. Start by establishing both parties, and provide their primary address and contact details. Define their roles. Also, provide a declaration to establish the said parties agree with the terms and conditions outlined.

  • Contractor’s responsibility: Define the initial scope of work. Here, mention the hourly rates, with the approximate materials required.

  • Time is of the essence: This section establishes the value of time. The contractor is to fulfill their obligations as per the target time frame.

  • Rates: Here, define the pricing of the contractor’s responsibilities. Mention the labor rates, actual cost of materials, markups, profits, tax, and any other miscellaneous amounts you want to outline.

  • Payment: This is a very important section to maintain peaceful relations between the parties. Here you define the final cost estimate of your project, the billing method, fines for late payments, reimbursements, and more.

  • Confidentiality: Here, you declare that the information provided by either party is private and cannot be shared with any external individuals.

  • Relationship of parties: This clause establishes that no employee-employer relationship will be formed between the parties.

Final thoughts

You need to be clear while drafting the terms and conditions of your T&M contract. The above-mentioned aspects shall help in decision-making. Also, having an accurate estimate of the project and foresight will ensure you leave no room for loopholes.

Use Revv’s ready-to-use contracts

Revv offers a range of editable contracts for our users to customize effortlessly. Also, our legal team ensures such documents are legally vetted. Our contract templates have inbuilt features, like e-signature, payment features, and more. Thus, editing this contract sample will not take much of your time and energy.

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