# Contract Types\n\n- **Lump sum / stipulated sum** — fixed price; contractor carries cost risk.\n- **Cost-plus** — owner pays actual cost plus a fee.\n- **GMP (guaranteed maximum price)** — cost-plus with a cap.\n- **Time & materials** — billed by labor + materials.\n- **Unit price** — priced per unit of work.\n\nThe contract type sets who carries the risk — choose it deliberately.
**Takeaway:** The contract type decides who carries the cost risk — choose it on purpose.
