What type of contract calculates a price per unit for each item used?

A unit-price contract is a type of agreement where the project price is determined based on the quantity of work performed or materials used, with a predefined price established for each unit of measurement. This format allows for accurate cost management, as payments are made per quantified unit rather than a single lump sum. This is beneficial in projects where the scope may fluctuate, making it easier to adjust costs according to actual usage, ensuring all parties are fairly compensated as the workload changes.

In contrast, a fixed-price contract stipulates a total price for a completed job regardless of the actual expenses incurred. A cost-plus contract covers the actual costs plus an additional amount for profit, while a time and materials contract bases payment on the time expended and the materials used. These alternatives do not directly align with the structure of a unit-price contract, which is specifically geared towards pricing based on specific units.