CPP Ethics & Legal Compliance in Purchasing 2

Question 1

A buyer who signs a purchase order beyond the dollar limit in their delegation of authority, while the supplier reasonably believes the buyer can bind the company, has most likely created a contract based on what?

Accepted Answer

Apparent authority

Answer

Apparent authority arises when the principal's conduct leads a third party to reasonably believe the agent has authority, even beyond internal limits.

Question 2

Under UCC Article 2, a contract for the sale of goods priced at $500 or more generally must be:

Accepted Answer

Evidenced by a writing signed by the party against whom enforcement is sought

Answer

The UCC statute of frauds (§2-201) requires a signed writing for sales of goods of $500 or more, with some exceptions.

Question 3

A supplier offers to buy from your company only if your company also buys from them. This practice is called:

Accepted Answer

Reciprocity

Answer

Reciprocity is a mutual-purchase arrangement that ethics codes discourage because it undermines merit-based supplier selection.

Question 4

Which federal law prohibits U.S. companies from paying foreign government officials to obtain or retain business?

Accepted Answer

Foreign Corrupt Practices Act

Answer

The FCPA's anti-bribery provisions bar payments to foreign officials to win or keep business.

Question 5

A buyer shares one bidder's pricing with another bidder so they can undercut it. This unethical practice is known as:

Accepted Answer

Bid shopping

Answer

Bid shopping means disclosing competitors' confidential bids to get a lower price, which breaches confidentiality and fair dealing.

CPP - Certified Procurement Professional Practice Test

CPP - Certified Procurement Professional Practice Test

CPP Ethics & Legal Compliance in Purchasing 2