Agencies love time & materials, clients love fixed prices — and both sides have their reasons. The real question is not “which model”, it is “who carries the risk in it”.
When a fixed price makes sense
When the scope is definable: an MVP, a website, an integration with a known API. The fairness condition is a paid discovery phase — without it, the vendor simply prices the risk into a 30 % buffer and you pay it anyway, just invisibly. A fixed price with defined KPIs and a delay penalty is the strongest client protection on the market.
When time & materials is fair
For long-term product development where priorities shift monthly. Fairness conditions: weekly demos, a transparent hourly statement, and the right to end with one month's notice. If a vendor on T&M refuses measurable weekly outputs, you are not paying for development — you are paying for a promise.
Our model: fixed discovery, fixed MVP, then T&M with a monthly cap. Risk sits with whoever can manage it — scope with us, priorities with you.