The Flat Material Type is a very simple material type that produces an unshaded, perfectly even color over the entire part to which it is applied.
This material is often used as a black-out material behind car grills or other meshes. It is also useful to create “Clown Pass” areas, which has uniquely colored flat materials applied to the different parts of a model so that these solid colors can be used to easily create selections in an image editing software. See Layers and Passes to automatically create a Clown Pass.
Click the color box to launch the Color Picker, which allows you to select the color of the material. The flat material has no shading or other surface properties. It will show the solid color you have selected over the entire part that the material is applied to.