Certified Professional Public Buyer (CPPB) Practice Test

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What is defined as 'force majeure' in contracts?

Pre-established performance criteria
Events that are unexpected and uncontrollable
Legal obligations that must be met
Standard business risks

The correct answer is: Events that are unexpected and uncontrollable

The concept of 'force majeure' in contracts refers to events that are unexpected and uncontrollable, which can prevent one or both parties from fulfilling their contractual obligations. This legal clause is aimed at addressing circumstances that are beyond the control of the parties involved, such as natural disasters, acts of war, or other significant disruptions. In the context of contract law, it offers relief to parties by allowing them to suspend or terminate their obligations without liability when such unforeseen events occur. Understanding 'force majeure' is critical for contract management because it helps delineate the responsibilities and risks of each party in extraordinary circumstances. This protective measure ensures that parties are not penalized for failures that are not due to their actions or negligence, thus fostering fair dealings in contracts.