60 PROJECT MANAGEMENT FOR SMALL BUSINESS + The type of contract you enter into often affects how and what the project customer will pay. There are six types of con- tracts that you should be familiar with: 1. Fixed-price. This is the most common type of contract. The seller offers a price for the contracted work, and the buyer pays the fixed price. Sometimes you might see this called a firm-fixed-price, which just means that the quoted price won't change. The seller carries the risk of cost overruns, not the client. If the cost of the seller's materials changes, or if the seller's project team wastes materials, or if there's a need for added labor, the seller has to absorb the cost fluctuations, not the buyer. 2. Fixed-price with incentive. As with the fixed-price contract, there's a quoted fee for the work, but this