This paper examines the characteristics of incentive contracts in which agent payments based on principal objectives. An incentive contract is an agreement between two parties in which one party provides an incentive to the other party to perform certain actions. These contracts are used in a variety of settings, including employment, procurement, and government regulation, and are motivated by the desire to align the interests of the contracting parties and encourage the party receiving the incentive to behave in a way that benefits both parties. The use of incentives in contracts has been proven to lead to improved performance and increased efficiency. For example, companies that use incentive-based compensation for their employees have higher productivity and better financial results than those that do not. In procurement, the use of incentives in contracts leads to improved product quality and reduced costs. However, designing incentive contracts can be challenging. If incentives are not designed well, they can have unintended consequences and actually lead to suboptimal outcomes. Incentive contract design requires careful consideration of the incentives offered, the performance metrics used to evaluate the party receiving the incentives, and the potential for moral hazard. Incentive contracts can also pose challenges in implementation, such as measuring performance and reducing moral hazard. Despite these challenges, incentive contracts have become an increasingly popular tool for improving performance and encouraging cooperation in a variety of situations. For example, in employment settings, incentive-based compensation has become more common, as companies seek to align interests employee they With interest company. In procurement, incentive contracts have been used to encourage suppliers to improve product quality and reduce costs. In government regulations, incentive contracts have been used to encourage companies to adopt environmentally friendly practices.