Privity and Force Majeure

force majeure privity - Privity and Force Majeure

Force Majeure is a part of the Privity.

Yes, those are the kind of horrible words you are dealing with in contracts. Although, as a Project Manager, you are not expected to write contracts but you are expected to understand the sentence above. These can also show up as nifty little questions in the PMP exam,

Force Majeure

Force Majeure is a provision in the contract that excuses the parties involved from any liability or contractual obligations due to acts of God, wars, terrorist attacks or other such events.

Example Question

A devastating tornado has caused the airports to be shut. You won’t be able to ship the hardware to the customer on the promised date. They buyer is fine with the delay because she understands the following clause of the contract

A. Retainage
B. Force Majeure
C. Intellectual Property
D. Sole Source

Answer – B

Privity

Privity is a legal term for the relationship between the parties involved in a contract. For example, in a project involving sub-contracts, there is privity between the prime buyer and the prime seller but not between the prime buyer and the sub-contractors.

Basically think of Privity as a fancy term used in Procurement for relationship.

Example Question

You are the project manager for a company that completes the installation of electrical fixtures in manufacturing environments. Part of your typical contractual agreement includes coverage of intellectual rights and privity. Privity is what?

A. The relationship between the project manager and a known vendor
B. The relationship between the project manager and an unknown vendor
C. The contractual, confidential information that defines the relationship between the customer and the vendor
D. The professional information regarding the sale between the customer and the vendor

Answer – C

Check more articles on Procurement Management

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