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Time and Materials contract - why software development companies are so fixated on it?

When you outsource software development you might get the impression that all the vendors are surprisingly conscientious when it comes to the pricing model. Time and materials, T&M, hourly rate - no matter how exactly they name it, the point is to avoid fixed contracts and a rigid budget. Why is that? How is it advantageous for both sides of the deal? What to do to keep project in check within the Time and Materials contract?

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