This document discusses the differences between fixed price and time and materials (T&M) contracts for software development projects. It notes that fixed price contracts manage risk by guaranteeing a set cost, but require clearly defining the project scope upfront, while T&M contracts provide more flexibility but leave the client bearing costs risks. The document suggests asking questions about how clear the project scope is, how important risk management vs flexibility are, and recommends using T&M initially if the scope is unclear before moving to a fixed price contract once the requirements are better defined.