CPCM Certified Professional Contract Manager: Contract Law and Legal Frameworks 2 — Questions and Answers
Question 1: Under the UCC Article 2, a merchant's firm offer is irrevocable for up to how long without consideration?
- 30 days
- 3 months (Correct answer)
- 6 months
- 1 year
Correct answer: 3 months
UCC §2-205 makes a merchant's signed, written firm offer irrevocable for the stated period or a reasonable time, but no longer than three months.
Question 2: Which doctrine allows a court to refuse enforcement of an unconscionable contract clause even if both parties agreed to it?
- Promissory estoppel
- Unconscionability (Correct answer)
- Mutual mistake
- Frustration of purpose
Correct answer: Unconscionability
Unconscionability under UCC §2-302 and common law allows courts to refuse enforcement of terms that are oppressively one-sided or shock the conscience.
Question 3: In contract law, what is the 'mailbox rule'?
- Acceptance is effective when dispatched by the offeree (Correct answer)
- An offer is valid only when received by the offeree
- A revocation is effective when mailed by the offeror
- A counteroffer must be sent by certified mail
Correct answer: Acceptance is effective when dispatched by the offeree
The mailbox rule (deposited acceptance rule) holds that acceptance is effective at the moment it is properly dispatched, not when received.
Question 4: A contractor claims additional compensation citing a cardinal change to the contract scope. What distinguishes a cardinal change from an ordinary change order?
- Cardinal changes require congressional approval
- A cardinal change alters the work so drastically it falls outside the original contract scope (Correct answer)
- Cardinal changes are limited to cost increases over 10%
- A cardinal change only applies to fixed-price contracts
Correct answer: A cardinal change alters the work so drastically it falls outside the original contract scope
A cardinal change so fundamentally alters the contract that it constitutes a breach, entitling the contractor to rescission or breach damages rather than just equitable adjustment.
Question 5: Which legal theory allows recovery for unjust enrichment when no valid contract exists?
- Indemnification
- Subrogation
- Quantum meruit (Correct answer)
- Novation
Correct answer: Quantum meruit
Quantum meruit ('as much as deserved') is a quasi-contractual remedy allowing recovery of the reasonable value of services rendered to prevent unjust enrichment.
Question 6: What is the legal effect of a 'no damages for delay' clause in a government contract?
- It bars all contractor claims for any reason
- It limits the contractor's remedy for owner-caused delay to time extensions only (Correct answer)
- It waives the government's sovereign immunity
- It makes the contract void for lack of mutuality
Correct answer: It limits the contractor's remedy for owner-caused delay to time extensions only
No-damages-for-delay clauses restrict a contractor's remedy for owner-caused delays to time extensions, precluding monetary compensation, though exceptions exist for active interference or bad faith.
Question 7: Under the Restatement (Second) of Contracts, a misrepresentation makes a contract voidable when it is:
- Fraudulent or material, and the recipient justifiably relied on it (Correct answer)
- Negligent and causes economic harm
- Made in writing only
- Discovered within 30 days of contract execution
Correct answer: Fraudulent or material, and the recipient justifiably relied on it
Per Restatement §164, a misrepresentation voids a contract when it is either fraudulent or material AND the recipient justifiably relied on it in entering the contract.
CPCM Certified Professional Contract Manager: Contract Law and Legal Frameworks 2
Under the UCC Article 2, a merchant's firm offer is irrevocable for up to how long without consideration?