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AICC Test 1 > Contract Law > Flashcards

Contract Law Flashcards

1
Q

What are the three fundamentals of the legal analysis?

A

Theory
Research Sources
Jurisdiction

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2
Q

What are the three legal theories

A

Law
Equity
Criminal

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3
Q

Sub Theories of Law Theory

A

Contract

Tort

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4
Q

What is the goal of equity action

A

Behavior Modification

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5
Q

Law Theory: What is the difference between Contract and Tort sub theory

A

1) Tort ‐ wrong against a person and money will solve the issue
2) contract ‐ money will solve the problem

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6
Q

Arbitration

A

Oldest and most popular form of Alternate Dispute Resolution (ADR)

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7
Q

REA ‐ Actual Cost Method

A

The actual cost method is the preferred method for proving costs. Under this approach, the contractor
isolates the specific costs associated with the adjustment and proves those costs with the best evidence
available

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8
Q

REA‐Estimated Cost Method

A

Good faith estimates are preferred when actual costs are not available. Estimates are generally required
when negotiating the cost of a change

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9
Q

REA‐Total Cost Method

A

The total cost method is NOT preferred because it assumes the entire overrun is solely the government’s
fault. The total cost method calculates the difference between the bid price on the original contract and
the actual total cost of performing the contract as changed.

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10
Q

REA‐ Jury Verdict Method

A

Jury verdicts are not a method of proof but a means of resolving disputed facts.

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11
Q

What COFD stand for

A

Contracting Officer’s Final Decision; filed during a dispute

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12
Q

Is a COFD required for at T4D?

A

No

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13
Q

ASBCA/GSBCA

A

Article II Branch 2 Contracting boards established for the sole purpose of hearing contractor or government
claims that arise during federal procurement activities.

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14
Q

Protest (Filed by loser)

A

A proceeding to resolve a disagreement with the way a contract was awarded.

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15
Q

Dispute

Filed by winner

A

A proceeding to resolve a disagreement with the way a contract was administered.

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16
Q

What does CDA stand for

A

Contract Disputes Act

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17
Q

Do state laws control fed contracts?

A

No

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18
Q

What are the legal resource options?

A

Statutory

Case & Common Law

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19
Q

What is a contract?

A

An agreement between two or more parties that creates in each party a duty to do or not do something
and a right to performance of the other’s duty or a remedy for the breach of the other’s duty.

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20
Q

What is a contract (really?)

A

A “promise for a promise” or a “promise for an act”!

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21
Q

What are the two types of contracts?

A
  1. Bilateral Contract: (Two Party Agreement)
    Promise for a promise
  2. Unilateral Contract: (One Party Agreement)
    Promise for an act
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22
Q

What are the TWO types of terminations available to a KO?

A

Termination for Convenience (T4C)

and Termination for Default (T4D)

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23
Q

A T4C is…

A

In the best interest of the Government

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24
Q

A T4D occurs when…

A

The contractor breaches the contract.

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25
Q

Does a contractor need to be in breach for a T4C?

A

No

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26
Q

How long does a contractor have to submit a settlement to the KO?

A

1 year after the T4C is submitted

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27
Q

Do subcontractors have rights in a T4C?

A

No

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28
Q

What is the difference between T4D and T4 Cause?

A

T4 Cause is FAR Part 12

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29
Q

True/False ‐ T4D and T4 Cause BOTH require a contractor breach

A

True

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30
Q

Is Termination for Default is applicable to commercial contracts?

A

No, Termination for Default is applicable to noncommercial contracts only.

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31
Q

What are the two types of T4D?

A

Actual Breach

Anticipatory Breach

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32
Q

Who has the burden of proof in a T4D?

A

Government

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33
Q

What are the four contractor defenses to a T4D?

A

1) No Breach
2) Excusable Delay
3) Economic Waste
4) Substantial Compliance

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34
Q

Which four contractor defenses to a T4D deal with minor defects?

A

Economic Waste and Substantial Compliance

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35
Q

Is a cure notice required for an Actual Breach (late delivery?)

A

No as per FAR 49.607 Delinquency Notices

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36
Q

Should a KO issues a cure notice for an anticipatory breach T4D?

A

Only if there is greater than 10 days prior to required delivery

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37
Q

IS a KO required to issues a Show Cause Notice immediately upon failed delivery?

A

No

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38
Q

When should a KO issued a Show Cause Notice

A

It should be sent immediately upon

expiration of the delivery period, not before

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39
Q

What is a Show Cause Notice?

A

KO asking the contractor why it shouldn’t be T4D’d

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40
Q

Contract Scope

A

Including whatever performance should be regarded as having been fairly and reasonably within the
contemplation of the parties at the time the contract was signed”

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41
Q

Economic Waste Rule

A

The Government would be wrong if it required the contractor to replace something at an economic
waste that was a minor defect. The solution, rather than forcing the contractor to do something that is
wasteful, is to accept a price reduction equal to the value

42
Q

Cardinal Change

A

Change, that is beyond the scope of the work contemplated,

is a “Cardinal Change” and is a breach of the contract

43
Q

Usage of Trade Rule

A

Industry practice and terms will control over non industry practice and terms where applicable to the
meaning of the contract.

44
Q

Bilateral change to a contract

A

requires signatures of both parties

45
Q

Unilateral change to a contract

A

One party (Government) making a change under the “Changes Clause”

46
Q

Sovereign Immunity

A

You can’t sue the King unless He says you can

47
Q

What act waived the Soverereign immuinty?

A

The Contract Disputes Act of 1978

48
Q

Can the USG sue a contractor via the CDA?

A

Yes

49
Q

How long does a KO have to issue a COFD?

A

60 days

50
Q

Who can submit a claim?

A

Must be a party to the contract to submit a claim

51
Q

What does De novo mean?

A

new trial

52
Q

Two types of REA damages?

A

Direct and Consequential

53
Q

Direct damages

A

damage that is within the usual course of the contract breach and could have been contemplated by the
parties. (Direct Damages ARE recoverable in an REA)

54
Q

Consequential damages

A

damage that is NOT within the usual course of the contract breach and could NOT have been
contemplated by the parties

55
Q

Claim

A

first step in any dispute. A written statement or request for compensation for an economic damage
incurred

56
Q

ASBCA/GSBCA

A

Contracting boards established for the sole purpose of hearing contractor or government claims that
arise during federal procurement activities

57
Q

Who can participate in a Protest?

A

Interested Party ‐ An actual or prospective offeror whose direct economic interest is affected by an
award or failure to receive an award.

58
Q

Protest Interested party examples:

A 
Bidder/offeror.
Parent company of bidder.
Agent or attorney in fact.
Contracting Officer.
GAO or courts themselves
59
Q

Is a subcontractor and interested party?

A

No

60
Q

Where can Contractor file a protest?

A
  1. Agency level Protest;
  2. The GAO
  3. The Federal Courts (ie Administrative Procedures Act access to the Federal Claims Court).
61
Q

When must a contractor file a protest?

A

shall be filed before bid opening….or no later than 10 days after the basis of protest is known

62
Q

What must a Protester prove to win?

A

That the agency violated a statute or regulation, and/or the agency’s action was UNREASONABLE.

63
Q

how long does GAO have to rule on a protest?

A

100 days

64
Q

Identify participants in a protest:

A
  1. The Contracting Officer;
  2. Only interested parties, someone with direct economic interest; and
  3. Possibly the GAO or the Federal Courts themselves.
65
Q

5 ESSENTIAL CONTRACT ELEMENTS

A
  1. Competent parties
  2. Mutual Assent
  3. Consideration.
  4. Lawful Purpose.
  5. Certainty of Terms.
66
Q

Consideration

A

The bargained for legal value of the deal (must stay balanced)

67
Q

Reprocurement/Repurchase

A

Can be excess of contract amount but not excessive

68
Q

What are three branches of Government?

A

1) Legislative (Article I): Creates laws
2) Executive Branch (Article II): executes laws
3) Judicial (Article III): interprets laws

69
Q

GAO is found?

A

Article I (Legislative)

70
Q

OMB is found?

A

Article II (Executive)

71
Q

APPROPRIATION

A

Makes money available READY TO SPEND for various purposes as indicated by Congress

72
Q

AUTHORIZATION

A

(Aspirational) DOES NOT make money available, but it may tell us the purpose Congress intends for the money

73
Q

RD&TE

A

Research, Development, Test and Evaluation

74
Q

Three limitations of funds (constraints)

A

1) Purpose
2) Time
3) Amount

75
Q

Describe the funds obligation process

A
  1. Congress authorizes budget.
  2. Congress appropriates
  3. OMB releases to Agencies
  4. Agency commits funds
  5. KO obligates the funds
  6. Invoices are issued, the “obligated” funds are “liquidated” by the amount of each payment
    until the funding is spent, additional funds made available, or the funding expires.
76
Q

Release of Assignment of the Claim

A

Once all the payments under the contract have been made, all set‐offs have been deducted, etc., then
issue a “Release of Claims” so that the contractor can pursue additional rights under the contract

77
Q

Can you use federal government contract to collatorize?

A

No

78
Q

What are four types of intellectual property?

A

1) Patents
2) Trademarks
3) Trade Secrets
4) Copyrights

79
Q

Patents

A

Grants to inventors that provide a limited monopoly on the invention for 20 years

80
Q

Trade Secrets

A

vital to corporate growth and are statutorily protected by the Uniform Trade Secrets Act and 18 U.S.C.
§1839. As long as its kept confidential, protections apply

81
Q

Copyrights

A

Protect original works from being reproduced without the author’s permission for the life of the author
plus 70 years.

82
Q

Trademarks

A

used to distinguish a product or service from similar products or services are legally recognized and
protected as long as the creator continues to use it.

83
Q

Can Gov. use a patent?

A

If GOV paid then Yes; if not the GOV will pay for the use

84
Q

What are two types of Trade Secrets?

A

1) Proprietary Data: Confidential or secret business information (requires disclosure)
2) Technical Data: Data of technical or scientific nature

85
Q

Unlimited Data Rights

A

Data created exclusively with Government funds. Government has the right to use, modify, reproduce,
release, etc., to anyone.

86
Q

Limited Rights:

A

Created exclusively with private funds. Contractor has the right to restrict the Government’s rights to
use, modify, release, reproduce, perform, display or disclose technical data pertaining to items,
components, or processes.

87
Q

Government Purpose Rights

A

Created with both Government and private funding. Government may use, modify, reproduce, release,
etc., within the Government or to someone outside the Government as long as the data is only used for
a Government Purpose.

88
Q

Negotiated Rights

A

Data rights in addition to the rights stated above as negotiated between the parties and set out in the
resulting contract.

89
Q

The Protester has the burden to prove its case by a Preponderance of Evidence

A

True

90
Q

Sherman Antitrust Act (Collusive Bids)

A

restraint of trade

91
Q

The contracting officer and procurement fraud attorney (PFA) have the responsibility to initiate appropriate investigative action

A

True

92
Q

Two types of agency authorities?

A

1) Actual (good)

2) Apparent (bad)

93
Q

What remedy can the damaged Contractor seek for apparent authority violation?

A

PROMISSORY ESTOPPEL

94
Q

Who controls funding?

A

Congress

95
Q

What happens to a patent after 20 years?

A

becomes public domain

96
Q

Should we always try to solve something at lowest level?

A

True

97
Q

Can you use government contract as collateral

A

No

98
Q

terminations step 8

A

Protect materials

99
Q

Evidence comes through

A

Witnesses

100
Q

Unavailable Testimony Violates?

A

Constitution

101
Q

Two types of warranties

A

1) Express

2) Implied

102
Q

Two types of implied warranties?

A

1) Warranty of Merchantability

2) Warranty of Fitness for a Particular Purpose

AICC Test 1 (1 decks)

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