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The tutorial provides an overview of time and materials contracts, commonly used in construction and product development. In this type of contract, the company is paid for the time and materials used for the project, making it suitable for projects with uncertain scope or changes. Unlike fixed-price contracts, time and materials contracts detail direct labor hours and fixed hourly rates that cover labor, overhead, expenses, profit, and material costs. It is recommended to use a time and materials contract when the project scope is unclear or has potential changes during development.
