In 30 seconds
- Traditional contracts fix scope; agile contracts let it flex.
- Common models: time and materials, capped, fixed price per sprint.
- Build in regular review and exit points.
The clash
Traditional contracts fix scope, time and cost up front, which assumes requirements are known. Agile assumes they'll change. The value of customer collaboration over contract negotiation calls for contracts that allow change.
Common models
| Model | Fixed | Flexes |
|---|---|---|
| Time and materials | Rate | Scope, cost |
| Capped T&M | Maximum cost | Scope |
| Fixed price, flexible scope | Price, time | Scope |
| Price per sprint | Cost per sprint | Number of sprints |
Helpful clauses
- Swap items of equal size without change requests
- Exit after any sprint with notice
- Shared Definition of Done
- Regular joint reviews
Myth vs reality
Myth · Agile means no contract.
Reality · Contracts still define the relationship.
Myth · Fixed price can't be agile.
Reality · Fixed price works with flexible scope.
Myth · Lawyers won't accept agile contracts.
Reality · Many organizations now use them routinely.
FAQ
Which model is best?
Depends on trust and uncertainty; capped T&M is a common middle ground.
How do we handle disputes?
Short cycles and regular reviews surface them early.
What's a statement of work in agile?
A document describing outcomes, approach and governance, not every feature.