FP Component Budget Limit Clause Samples

The FP Component Budget Limit clause sets a maximum financial cap on the fixed-price portion of a contract or project. In practice, this means that the contractor cannot charge or be reimbursed for costs exceeding the specified budget limit for the fixed-price component, regardless of actual expenses incurred. This clause ensures cost control and budget predictability for the client, preventing unexpected overruns and allocating the risk of excess costs to the contractor.