CCNP Contract Drafting & Performance Management 3

Question 1

Which type of contract clause allocates the risk of unforeseen events that make performance impossible or impracticable?

Accepted Answer

Force majeure clause

Answer

A force majeure clause excuses or delays performance when extraordinary events outside a party's control—such as natural disasters or government actions—prevent fulfillment.

Question 2

In a contract with KPIs, what should happen when a vendor consistently fails to meet performance thresholds?

Accepted Answer

Remedies such as service credits, cure periods, or termination rights are triggered

Answer

KPI frameworks typically include graduated remedies—credits, cure obligations, and ultimately termination rights—when performance falls below contractual thresholds.

Question 3

What is the legal effect of an 'entire agreement' (integration) clause in a written contract?

Accepted Answer

It prevents parties from relying on representations made outside the written document

Answer

An integration clause establishes that the written contract is the complete and final expression of the parties' agreement, barring extrinsic evidence of prior discussions.

Question 4

When drafting indemnification provisions, what does a 'mutual indemnity' structure provide?

Accepted Answer

Each party indemnifies the other for losses arising from its own fault or breach

Answer

Mutual indemnity means each party agrees to indemnify the other for claims, losses, or damages caused by that party's own acts, omissions, or breaches.

Question 5

A service contract includes a 99.9% uptime SLA. The provider achieves 99.5% uptime in a given month. What is the most appropriate contract mechanism to address this?

Accepted Answer

Service credits applied against the next invoice per the SLA schedule

Answer

Well-drafted SLAs include a credit schedule that provides proportionate financial remedies for uptime shortfalls without requiring termination for single-month failures.

(CCNP) Certified Contract Negotiation Professional Practice Test

(CCNP) Certified Contract Negotiation Professional Practice Test

CCNP Contract Drafting & Performance Management 3