Practice Quiz

PMI PMP Project Management

Category - Procurement Management

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A freak tornado caused damage to a key warehouse during Boris’ vacation in Bora Bora. Boris is concerned over whether his project’s contract covers such a situation. What clause in his Terms and Conditions should John refer to?
  1. Authority
  2. Assignment
  3. Retainage
  4. Force majeure
  5. Intellectual property
Explanation
Answer: d - Force majeure is the clause the deals with “acts of God” or events beyond one’s control. Authority addresses who is responsible for what. Assignment speaks to the circumstances that will permit the parties to give rights to others. Retainage is a percentage of a payment withheld that is paid when the final work is completed.

Key Take Away: The easiest way to learn about contracts is to read them - and read LOTS of them! Force majeure is something to take a close look in your contracts at home, too. Your home and car insurance policies likely contain force majeure clauses they may exclude the coverage of certain events that you may want covered.
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