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What is a project contract and why do I need one?

June 28, 2026 by
SimplyConnecting

A contract defines how the project is priced and how hours are budgeted. Without a contract, the timesheet cannot calculate budget versus spent hours.

There are two contract types:

  • Hours & Tariff — you agree on a fixed number of hours and an hourly rate. Budget = hours × rate.
  • Fixed Price (Weekly Hours) — you agree on a fixed total price and a weekly hours commitment. Hours over the contract period are estimated from the weekly commitment and working days.

A project can have multiple contracts (e.g. for different phases or resources).