APP APP Contract Management & Administration 2

Question 1

Which element is NOT typically required for a contract to be legally enforceable in the US?

Accepted Answer

A notarized signature

Answer

US contract law requires offer, acceptance, consideration, capacity, and legality — notarization is not a general requirement for commercial contracts.

Question 2

A buyer includes an 'audit rights' clause in a vendor contract primarily to:

Accepted Answer

Permit review of the supplier's cost records to verify charges on cost-reimbursable work

Answer

Audit rights clauses allow buyers to inspect supplier cost records, ensuring that reimbursable charges are accurate, allowable, and properly documented.

Question 3

The Uniform Commercial Code (UCC) Article 2 primarily governs:

Accepted Answer

Sale of goods transactions

Answer

UCC Article 2 provides the default legal framework for the sale of goods in the United States, covering formation, performance, and breach of goods contracts.

Question 4

When a contract is 'terminated for convenience' by the buyer, the seller is generally entitled to:

Accepted Answer

Recovery of allowable costs incurred plus a reasonable profit on work performed

Answer

Termination for convenience entitles the seller to reimbursement of costs incurred and a fair profit for work done up to termination, but not the full contract value.

Question 5

What is 'privity of contract' and why does it matter in procurement?

Accepted Answer

The legal principle that only contract parties have enforceable rights under that contract

Answer

Privity of contract limits enforceable rights to the direct parties, meaning a buyer generally cannot enforce terms directly against a subcontractor with whom it has no contract.

(APP) Accredited Purchasing Practitioner Certification Practice Test

(APP) Accredited Purchasing Practitioner Certification Practice Test

APP APP Contract Management & Administration 2