1. Which of the following states the way in which you should react to standard "form" contracts? [Mark only one answer choice]

• A.

Standard form contracts are based on years and years of experience. Therefore, they already capture many best practices, making engineers' lives easier by helping engineers to become familiar with them, to engage in contracting processes, and to make improvements to the processes based on their industry experience that help them to manage risk.

• B.

Standard form contracts are based on years and years of experience. Therefore, they already capture many best practices, making engineers' lives easier.

• C.

Standard form contracts are for lawyers. Engineers should not get involved.

2. You are asked by your company's General Counsel's (the company lawyer) to review a contract with a major purchaser of a product that your company manufactures.

Which of following statements is most accurate? [Select the one best answer choice]

• A.

As long as you review the contract carefully, you will know understand all of the terms of the contract, as all terms must be express and contained within the "4 corners" of the contract.

• B.

What a jerk! Lazy lawyers always asking you to review contracts. They should do their own jobs to that you can watch "The Golden Ticket" episode of The Office.

• C.

You should review the contract carefully, but know that other termseither express or impliedmight be a part of the contract, often because of statutes that apply certain legal rules to these kinds of transactions.

3. Which best states the functions of contracts? [Mark only one answer choice]

• A.

Contracts identify the rights and responsibilities of parties by assigning risks, capturing costs, determining damages and remedies, specifying requirements, establishing required processes, and establishing rights and responsibilities of those involved, among other things. Contracts offer a primary mode of communication by which you can arrange relationships among the various parties that work to solve a problem.

• B.

Contracts identify the rights and responsibilities of parties by assigning risks, capturing costs, determining damages and remedies, specifying requirements, establishing required processes, and establishing rights and responsibilities of those involved, among other things. Contracts define liabilities and determine who is at fault when the inevitable need arises to place blame for a problem.

4. A counterparty to a major contract wishes to keep the contract price low but also reveals that its lender is requiring a right to unilaterally assign rights and responsibilities under the contract under certain loan repayment conditions. This worries you. Your best approach would be:

• A.

Use your concession to the assignment provision as leverage to lower other risks. The price term is only one "cost" of the contract, and risk can be lowered through other provisions.

• B.

Accept the terms. There is nothing you can do about it because lenders often require such an assignment term.

• C.

Push back on the price term. The only way to compensate for the higher risk that comes with unilateral assignment is with a more favorable contract price term.

• D.

Leave it to the lawyers. They'll handle it, and your attempts to get involved will only complicate the process.