Certified Supply Chain Professional (CSCP) Practice Exam

What defines a contract?

1. An agreement to perform specific acts or services

2. A warranty for product return and refund

3. A verbal promise without legal standing

4. An outline of strategic business partnerships

The correct answer is: An agreement to perform specific acts or services

A contract is fundamentally defined as an agreement between parties that outlines specific obligations, acts, or services that are to be performed by one or both parties. This definition emphasizes the binding nature of the agreement, which is enforceable by law. Contracts establish clear terms for the performance of agreed-upon actions, providing a legal framework that can be relied upon if one party fails to meet their obligations. The other options do not capture the essence of what constitutes a contract. For instance, a warranty for product return and refund pertains to consumer rights and does not involve a mutual agreement on performance or services between parties, which is central to a contract. A verbal promise without legal standing lacks the binding enforceability required for a contract, as contracts typically need to be explicit and agreed upon in a manner that can be legally enforced. Lastly, an outline of strategic business partnerships may involve agreements but is not inherently a contract itself, as it may only serve as a framework or discussion points without the necessary legal commitments that define a contract.