CCM Contract Management and Negotiation 2

Question 1

A contractor submits a claim for additional costs due to unforeseen site conditions. Which contract clause typically governs this situation?

Accepted Answer

Differing site conditions clause

Answer

The differing site conditions clause (also called changed conditions clause) allocates risk for subsurface or latent physical conditions that differ materially from those indicated in the contract.

Question 2

During negotiation, the technique of deliberately making an extreme opening offer to anchor the discussion is known as:

Accepted Answer

Anchoring

Answer

Anchoring is a cognitive bias-based negotiation tactic where the first number introduced heavily influences the final outcome by setting a reference point.

Question 3

Which type of contract places the greatest financial risk on the buyer?

Accepted Answer

Cost-plus-fixed-fee (CPFF)

Answer

Cost-plus-fixed-fee contracts reimburse all allowable costs plus a fixed fee, so the buyer bears virtually all cost overrun risk.

Question 4

A 'battle of the forms' dispute arises when:

Accepted Answer

Both parties use standard terms that conflict with each other

Answer

A battle of the forms occurs under UCC Article 2 when both buyer and seller use their own standard purchase orders and acknowledgment forms with conflicting terms.

Question 5

What is the primary purpose of a 'standstill agreement' in contract negotiations?

Accepted Answer

To pause hostile takeover actions while parties negotiate

Answer

A standstill agreement temporarily prohibits a potential acquirer from taking further hostile steps while negotiations for a friendly deal proceed.

(CCM) Certified Commercial Manager Practice Test

(CCM) Certified Commercial Manager Practice Test

CCM Contract Management and Negotiation 2