As part of an article on contractual models within the IT industry, I pointed out that two basic contractual models are used as standard in IT: the work contract model and the service contract model. Each of these models provides for different consequences and places different obligations on the parties. Also linked to contract models in IT are the topics of the two leading project methodologies – agile and waterfall. In this article, I will focus on identifying the main advantages and disadvantages of each of these methodologies.