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!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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What is a contract?

A non-binding agreement between two parties
A binding agreement between a buyer and seller
An informal handshake deal
A document only used in government procurement

The correct answer is: A binding agreement between a buyer and seller

A contract is a binding agreement between a buyer and seller. This means that both parties are legally obligated to fulfill their agreed-upon terms and conditions. Contracts are essential in project management to ensure all parties involved understand their roles, responsibilities, and the scope of work. Option A is incorrect because a contract is a binding agreement, not a non-binding one. Option C is incorrect because an informal handshake deal is not a legally binding contract. Contracts need to be documented and signed to be enforceable. Option D is incorrect because contracts are not exclusively used in government procurement; they are utilized in various industries for different types of agreements.