NCMA CPCM 1.2 Contract Principles Questions With Complete Solutions

Principal and Agency correct answer: Relationship in which one person has legal authority to act for another. Authority granting party (company or government) is the principal. Party who receives authority to act on their behalf is the agency. Four types of authority correct answer: Actual authority, express authority, implied authority, apparent authority Actual Authority correct answer: Agent's specific authority that the principal intentionally confers on the agent. It confers a power to the agent to affect legal relations or the principals with third persons. Express Authority correct answer: Authority plainly granted, either verbally or in writing, to an agent by a principal. It is direction provided to the agent by the principal to do specific actions. Implied Authority correct answer: Authority given by a principal to an agent that is not actually expressed or otherwise communicated. Apparent Authority correct answer: The appearance of being a principal's agent with the power to act for the principal. Corporations are liable for an employees acts and promises to a third party if it appears to the employee has been granted authority. Contract correct answer: A promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. Four elements of a contract correct answer: Offer/acceptance, consideration, legal purpose, capacity. Inspection correct answer: Examining and/or testing supplies and services to determine I the supplies and services meet the contract's requirements. Acceptance correct answer: Occurs when the buyer inspects the goods to conform to the contract's requirements or fails to reject the delivery.