If you cannot estimate those items for a particular job, you should not attempt to work on a fixed-price basis. Any expenses incurred during the consulting project are submitted to the client for reimbursement. Performance Agreements Contingency agreements are one way to describe performance contracts. Some business-consultant contracts are known as performance contracts, in which payment is based on a measurable benefit to the client. A contingency contract basically states that compensation is based on the outcome of the project, which is the measurable benefit to the client.
Payment is made contingent on an improvement.
Thus you would use this method as a marketing tool and thereby meet some clients' resistance to the idea of consulting. If the client is skeptical about the consultant's ability to perform, the contingency consultant sells that client by tying the fee to the improvement. Of course, the consultant should be almost 100 percent certain that he or she can, in fact, produce the desired results. 1999 ZD Inc. All rights reserved.