CPSM CPSM Contract Management & Negotiation 2

Question 1

A 'termination for convenience' clause in a contract primarily benefits:

Accepted Answer

The buyer, allowing cancellation without cause

Answer

A termination for convenience clause allows the buyer to end the contract at any time for any reason, typically compensating the supplier only for work completed and reasonable wind-down costs.

Question 2

What does the Uniform Commercial Code (UCC) Article 2 govern in US supply contracts?

Accepted Answer

Sale of goods transactions

Answer

UCC Article 2 governs contracts for the sale of goods in the United States, providing default rules for formation, performance, and breach when contract terms are silent.

Question 3

In contract negotiation, a 'should-cost' analysis is used to:

Accepted Answer

Estimate what a product or service should cost based on materials, labor, and overhead

Answer

Should-cost analysis deconstructs a product's expected cost using components like materials, labor, overhead, and profit to give buyers a fact-based negotiation target.

Question 4

Which of the following best describes a 'battle of the forms' scenario in contract law?

Accepted Answer

Conflicting terms between buyer's purchase order and supplier's order acknowledgment

Answer

The 'battle of the forms' occurs when a buyer's purchase order and a supplier's acceptance contain different or conflicting terms, creating ambiguity about which terms govern the contract.

Question 5

What is the key difference between a warranty of merchantability and a warranty of fitness for a particular purpose under the UCC?

Accepted Answer

Merchantability guarantees goods are fit for ordinary use; fitness guarantees goods meet a buyer's specific stated need

Answer

UCC implied warranty of merchantability guarantees goods work for their ordinary purpose, while warranty of fitness for a particular purpose applies when a buyer relies on the seller's expertise for a specific need.

(CPSM) Certified Professional in Supply Management Practice Test

(CPSM) Certified Professional in Supply Management Practice Test

CPSM CPSM Contract Management & Negotiation 2