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Contract Law & Commercial Transactions Flashcards

7 cards from real FSO practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Contract Law & Commercial Transactions flashcards as text

  1. Which three elements are essential to form a valid, enforceable contract?

    Answer: Offer, acceptance, and consideration

    A binding contract requires an offer, acceptance, and consideration (plus capacity and legality).

  2. On a classified contract, which form conveys the security requirements to a cleared contractor?

    Answer: DD Form 254

    The DD Form 254, Contract Security Classification Specification, conveys classification guidance and security requirements.

  3. Who is generally responsible for issuing the DD Form 254 to a prime contractor?

    Answer: The government contracting activity

    The government contracting activity issues the DD 254 to the prime contractor, which then issues one to each cleared subcontractor.

  4. A firm-fixed-price contract places the greatest cost risk on which party?

    Answer: The contractor

    Under firm-fixed-price, the contractor bears the risk of cost overruns.

  5. Under the Uniform Commercial Code, which type of transaction does Article 2 primarily govern?

    Answer: Sale of goods

    UCC Article 2 governs the sale of goods between parties.

  6. A contractor's signed agreement to perform classified work in exchange for payment is an example of what contract element?

    Answer: Mutual consideration

    Performance in exchange for payment represents mutual consideration, the bargained-for exchange of value.

  7. What does the 'Security Requirements' clause (FAR 52.204-2) require of a contractor?

    Answer: Comply with the DD 254 and the NISP rules for classified access

    FAR 52.204-2 requires compliance with the DD 254 and the applicable national industrial security program requirements.

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