CAPM (Certified Associate in Project Management) Practice Exam

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Study for the Certified Associate in Project Management Exam with practice questions and answers. Enhance your understanding of project management principles and strategies to excel in the exam!

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What does a fixed-price contract obligate the seller to do?

Adjust price based on inflation
Complete the contract despite cost overruns
Pay back the buyer for any undelivered services
Ensure all materials are provided at cost

The correct answer is: Complete the contract despite cost overruns

A fixed-price contract obligates the seller to complete the contract despite cost overruns. This means that the seller is committed to delivering the agreed-upon goods or services at the agreed-upon price, regardless of any unexpected costs that may arise during the execution of the project. This helps provide certainty to the buyer in terms of costs and delivery, as the risk of additional expenses is borne by the seller. Adjusting the price based on inflation (option A), paying back the buyer for any undelivered services (option C), and ensuring all materials are provided at cost (option D) are not obligations typically associated with fixed-price contracts.