Certified Professional Public Buyer (CPPB) Practice Test

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What is the potential impact of latent defects on a contract?

They can enhance the contract’s value
They can lead to disputes regarding the contract
They will always be disclosed by the seller
They have no impact on the contract

The correct answer is: They can lead to disputes regarding the contract

Latent defects refer to hidden flaws or issues in a product or service that are not readily apparent at the time of contract execution or delivery. When latent defects exist, they can significantly impact the contractual relationship between the parties involved. The correct answer highlights that these latent defects can lead to disputes regarding the contract. This occurs because the presence of defects can result in dissatisfaction with the deliverables, claims for breach of contract, and disagreements about responsibilities for repair or replacement. Parties may argue over warranty issues, the severity of the defects, and potential remedies, which can complicate the contract's execution and fulfillment. Understanding the implications of latent defects is crucial for both buyers and sellers in ensuring that agreements are fair, transparent, and enforceable. Awareness of these potential issues also reinforces the importance of thorough inspections and due diligence before finalizing contracts, helping to minimize disputes down the line.