What is time and material in contract negotiations?

Time and material (T&M) contracts are agreements where a client pays for the actual time spent on a project and the materials used, rather than a fixed price. This type of contract is often used in situations where the scope of work is uncertain or may change, allowing for flexibility. T&M contracts can provide transparency in billing but may lead to higher costs if not managed carefully. They typically require detailed tracking of hours worked and materials used to ensure accurate invoicing.