Time and materials contract template
Use this free time and materials contract template to speed up the contracting process and ensure your business can adapt quickly to change.
Use this free time and materials contract template to speed up the contracting process and ensure your business can adapt quickly to change.
This guide provides a comprehensive look at time and materials contracts, explaining their purpose, management, use cases and how you can streamline their processes using Juro’s advanced contract management solution.
A time and materials contract is an agreement whereby the client agrees to pay the contractor based on the time spent by the contractor’s employees and subcontractors to perform the work, plus costs for materials used in the project.
This type of contract is favoured in situations where it is not possible to estimate the extent or duration of the work, or when flexibility for changing specifications is needed without the need to renegotiate the price of the work.
The primary purpose of a time and materials contract is to provide flexibility and adaptability to both parties involved in the project. It allows adjustments to the scope of work, accommodating the complexities and unpredictabilities inherent in certain projects without necessitating constant renegotiations. This contract type is particularly valuable in the following contexts:
Time and materials contracts are typically managed by project managers and contract administrators. They are responsible for ensuring that the work is done efficiently, within budget and to the satisfaction of both parties.
This contract management work often involves tracking the hours worked and materials used, ensuring regular and transparent communication with the client, and adjusting project requirements and resources as needed.
Time and materials contracts are particularly prevalent in industries such as construction, software development, consulting, and creative services. Here are some key use cases:
Construction projects, where unforeseen work and adjustments are common. Time and materials contracts allow for flexibility in labour and materials costs, accommodating changes in project scope or unexpected site conditions without needing contract renegotiation.
IT and software development – especially in agile projects that evolve through sprints and phases. Time and materials contracts provide the flexibility to adjust requirements, features and timelines based on ongoing user feedback and iterative development, ensuring that the final product meets the client’s evolving needs.
Consulting services, where the scope can expand as the consultant gains deeper insight into the client’s needs. Time and materials contracts allow consultants to adapt their services and deliverables based on the growing understanding of the client’s challenges and goals, providing tailored solutions without rigid constraints.
Creative services. For industries like advertising, design and media production, the creative process can be unpredictable and client revisions are frequent. Time and materials contracts enable creative teams to refine and adjust their work to meet client expectations while accommodating changes in project direction and scope.
A well-crafted time and materials contract template should cover several key elements to ensure clarity and fairness for all parties involved. Essential components include:
Scope of work:
Rates:
Materials costs:
Billing schedule:
Project duration:
Termination terms:
Additional components:
To make sure time and materials contracts remain up-to-date with current labour costs, material prices, legal requirements and industry standards, they need to be well managed. Juro’s AI-native contract management platform provides the tools needed to streamline this process, addressing common challenges and enhancing overall efficiency.
Accurate logging of billable hours and expenditures is critical. Juro integrates with time-tracking and expense-reporting tools, offering real-time updates and transparency. You can also make use of Juro’s automated contract tracking features, which reduce manual entry errors and improve reporting accuracy.
Continuously revising contract templates to reflect the latest cost of labour and materials is essential. Juro allows you to easily update automated contract templates in real-time, ensuring they are aligned with market changes and inflation rates.
Keeping templates compliant with evolving legal regulations and industry standards can be complex. Juro helps by offering customizable templates that can be quickly updated and alerts you automatically when legal changes happen, so that your contracts remain enforceable.
Tracking changes and storing multiple versions of templates is vital for consistency and transparency. Juro’s version control features mean that you can ensure everyone is using the most current template and provide a clear history of changes, allowing you to track updates over time.
Efficient approval processes are key to reducing delays. Through its integrated approval workflow, Juro streamlines approvals and ensures timely contract execution by facilitating quick and efficient sign-offs from relevant parties and reducing administrative bottlenecks.
Uncontrolled changes in a project’s scope can lead to disputes. Juro helps manage scope creep by providing clear definitions of deliverables, maintaining regular progress reviews and implementing strict change control processes, with a record of agreed-upon changes and their impact on the contract.
Preventing misunderstandings about chargeable items or rates is essential for avoiding billing disputes. Juro addresses this by including detailed breakdowns of labour and material costs, billing rates and payment terms in contract templates; and facilitating transparent tracking and reporting through the platform so that disputes can be resolved quickly and amicably.
Juro’s contract management platform offers a robust solution to automate and manage your time and materials contracts more effectively. By leveraging Juro, your business can:
Juro's AI-native contract automation platform empowers all teams to create, agree, execute and manage contracts up to 10x faster than traditional tools. To find out more, hit the button below to book your personalized demo.
Juro is the #1-rated contract platform globally for speed of implementation.
Modern businesses use Juro to automate contracts from drafting to signature and beyond, in one intuitive platform that every team can use. Want to see how?
Sign me up