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.