Contract Question from PMZilla

Submitted by Jgrind07 on Fri, 04/26/2013 - 03:09

Hi Friends,

I just now tried PMZilla's tough 30 questions. I came across the follwoing question:

 Q: You are conducting procurements and you have finalized the seller you want to go with. You are now ready to sign a contract with the seller. Which of the following will you focus on for sign off. Select the BEST answer: )

1.Ensure that contract is legally binding      
2.Ensure it has detailed SOW    
 
 
3.Ensure that seller has signed off.      

4. Ensure that contract is fixed price to avoid risk to you.

I selected Option 2 but the answer was Option 1.

I thought that the contracts have legal bindings by nature and so if you are signing a contract means if has leagal bindings with out explictly telling. So I thought its nothing to worry about legal.

Further, I thought before signing the contract both party should know the "procurement item in sufficient details to allow prospective seller to determine if they are capable of providing the profucts, services or results" (PMBOK 4  - Page # 325) and so selected Option 2.

The explaination for Option 1 has been given as follows:

Contracts may or may not be signed by seller, but all contracts should have legal binding.
 
My question: If both party may not sign, how it will be a contract?
 
Appreciate an explaination on this.
 
Thanks
Jai
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sspawar

Fri, 04/26/2013 - 04:27

A contract  requires Procurement statement of work.

SOW is concerned with Project for buyer.

 

My question: If both party may not sign, how it will be a contract?

 

just think it reversed 

how a contrat will be a legal binding, if not signed by both. (where otption  3  says for only 1 party sign)

Jgrind07

Fri, 04/26/2013 - 04:37

 Hi Pawar,

are you in favor of option 2? I cannot understand your option from your reply

Thanks

Jai

 

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admin

Fri, 04/26/2013 - 04:31

 Guys, good catch, The word NOT is missing

 

"Which of the following will you NOT focus on for sign off"

 

Hence option 1 is the answer. 

Jgrind07

Fri, 04/26/2013 - 04:35

 Thanks, Admin. I was sure the answer cannot be option 1 for the question asked.  Your explanation makes sense to option 1 

Thanks

Jai

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crushPMP

Mon, 04/29/2013 - 03:09

Even after adding the "NOT" in the question how would you justify Option 4??

Not all contracts are FP contracts in the world.

 

But I hear you, "contracts" by it's inherent nature have to be legally binding. So that is something NOT to worry about.