Certified Professional Public Buyer (CPPB) Practice Test

What is defined as something exchanged between parties that helps to form a contract?

1. Legal consideration

2. Legal purpose

3. Life cycle cost

4. Limited rights

The correct answer is: Legal consideration

Legal consideration is the correct choice because it refers to something of value that is exchanged between parties as part of forming a binding contract. In legal terms, consideration is essential because it signifies that the parties are entering into the agreement willingly and that a mutual benefit or detriment is taking place. In a contractual context, consideration can take various forms, such as money, services, goods, or a promise to refrain from doing something. The key aspect is that both parties must provide consideration for a legal contract to be valid and enforceable. Without consideration, an agreement might lack the necessary legal foundation to hold up in a court. The other choices do not fulfill this requirement: legal purpose refers to the lawful reason behind a contract, life cycle cost pertains to the total cost of ownership over the life of an asset, and limited rights indicate constraints on ownership or usability of an asset. None of these options embodies the reciprocal exchange necessary for a contract’s formation in the way that legal consideration does.