CCNP Contract Law & Regulatory Compliance 4 â Questions and Answers
Question 1: Under the Truth in Negotiations Act (TINA), contractors negotiating certain government contracts must certify that the cost or pricing data submitted is:
- Consistent with the contractor's internal budget projections
- Current, accurate, and complete as of the date of agreement on price (Correct answer)
- Reviewed and approved by a certified public accountant
- Based on market comparables from at least three independent sources
Correct answer: Current, accurate, and complete as of the date of agreement on price
TINA requires contractors to certify that cost or pricing data is current, accurate, and complete as of the date of price agreement to prevent overpricing.
Question 2: When a contract is deemed 'void ab initio,' it means:
- It becomes unenforceable only after one party breaches
- It was never legally valid from the outset (Correct answer)
- It requires court approval to terminate
- It can be ratified by subsequent performance
Correct answer: It was never legally valid from the outset
A void ab initio contract is treated as if it never existedâit has no legal effect from the beginning due to a fundamental defect such as illegality.
Question 3: The Defend Trade Secrets Act (DTSA) provides federal civil remedies for trade secret misappropriation. A key requirement for protection is that the owner must:
- Register the trade secret with the US Patent and Trademark Office
- Take reasonable measures to keep the information secret (Correct answer)
- Limit disclosure to fewer than 10 employees
- Obtain a non-disclosure agreement from every person with access
Correct answer: Take reasonable measures to keep the information secret
DTSA protection requires that the information derive economic value from its secrecy and that the owner take reasonable steps to maintain that secrecy.
Question 4: In government contracting, a 'constructive change' occurs when:
- The contractor voluntarily improves the deliverable beyond specifications
- Government actions or inactions direct additional work without a formal contract modification (Correct answer)
- The contracting officer issues a unilateral change order
- The contractor substitutes equivalent materials without approval
Correct answer: Government actions or inactions direct additional work without a formal contract modification
A constructive change arises when informal government conductâsuch as defective specifications or misinterpretationârequires the contractor to perform beyond the original contract scope.
Question 5: Which legal concept allows a party who has conferred a benefit on another to seek compensation even in the absence of an express contract?
- Promissory estoppel
- Quasi-contract (unjust enrichment) (Correct answer)
- Accord and satisfaction
- Third-party beneficiary rights
Correct answer: Quasi-contract (unjust enrichment)
Quasi-contract is an equitable remedy preventing unjust enrichment by allowing recovery for benefits conferred even without a formal contractual agreement.
Question 6: Under the Foreign Corrupt Practices Act (FCPA), US companies are prohibited from:
- Employing foreign nationals in subsidiary operations
- Bribing foreign government officials to obtain or retain business (Correct answer)
- Entering into contracts governed by foreign law
- Using foreign subcontractors without due diligence certification
Correct answer: Bribing foreign government officials to obtain or retain business
The FCPA prohibits US persons and companies from paying foreign government officials to gain improper business advantages.
Question 7: A 'severability clause' in a contract serves to:
- Allow either party to terminate with written notice
- Preserve the remainder of the contract if one provision is found unenforceable (Correct answer)
- Limit the contract's geographic scope
- Define which obligations survive termination
Correct answer: Preserve the remainder of the contract if one provision is found unenforceable
A severability clause ensures that if a court invalidates one provision, the remaining terms continue in force rather than voiding the entire agreement.
CCNP Contract Law & Regulatory Compliance 4
Under the Truth in Negotiations Act (TINA), contractors negotiating certain government contracts must certify that the cost or pricing data submitted is: