A fixed price is what most residential clients expect and most small contractors sign: one number for the whole scope, paid on a draw schedule. The contractor takes the risk that the estimate was wrong and gets the reward if it was conservative. The word "scope" carries the contract. Anything outside it is a change order; anything inside it is the contractor's problem, including the wall that wasn't in the drawings.
A worked number
Fixed price $68,000, estimated cost $47,700, planned margin $20,300. The job costs $50,400 because the electrician's second bill was bigger and the countertop overage never became a change order. Actual margin $17,600. The $2,700 didn't come from a bad estimate; it came from a scope change that wasn't written down.
The mistake it hides
Reading the fixed price as fixed cost. The price doesn't move; the cost does, every week, and a contractor who only looks at the price until the end learns the margin at the end. Fixed-price work is where job costing pays for itself fastest, because the contractor owns every dollar of overrun.
In Obra
The contract value is recorded once and never changes retroactively; change orders sit on top of it with their own dates and amounts, and the expected final cost is tracked against the adjusted total. The change order guide is the five-minute habit that keeps the price honest.