What type of contract typically involves payments based on the quantity of material supplied?

A unit price contract is designed specifically to handle projects where costs are determined based on the quantity of materials supplied or completed work. In this type of contract, the contractor is paid a predetermined amount for each unit of work completed, which enables both the contractor and the client to have flexibility related to changing quantities.

For example, if a contractor is tasked with supplying and installing plumbing fixtures and the total number of fixtures required is uncertain at the beginning of the project, a unit price contract allows for adjustments in payment as the actual amount of work completed or materials supplied becomes clear. This pricing structure can be particularly useful in construction and plumbing industries where quantities can fluctuate due to project modifications or other factors.

The other types of contracts have different approaches. Fixed-price contracts involve a set total price for a defined scope of work, offering little flexibility for changes in quantity without negotiation. Sum contracts generally indicate a single lump-sum price for the entire project, which does not account for variations in material supply. Lastly, cost-reimbursement contracts focus on reimbursing the contractor for their costs plus an additional amount for profit, which doesn’t inherently involve payments based on specific quantities of materials. Thus, the correct choice directly aligns with the need for quantifiable payments based on provided materials