Documents Considered Mutually Binding
Question
Which of the following documents are considered mutually binding? (Choose two.)
Answers
Explanations
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A. B. C. D. E.AC.
The two documents that are considered mutually binding are the Purchase Order (PO) and the Request for Proposal (RFP).
Purchase Order (PO): A purchase order (PO) is a legally binding document between a buyer and a supplier that confirms the details of a purchase agreement, including the products or services to be provided, the agreed-upon price, payment terms, and delivery date. Once the supplier accepts the PO, it becomes a contract, and both parties are bound by the terms and conditions stated in the PO.
Request for Proposal (RFP): A Request for Proposal (RFP) is a document that an organization uses to solicit bids from potential vendors or contractors to provide goods or services. An RFP outlines the requirements and specifications for a project or service and invites vendors to submit a proposal. When a vendor submits a proposal in response to an RFP, they are considered to be legally bound by the terms and conditions outlined in the RFP if they are awarded the contract.
The other documents listed are not mutually binding in the same way as a PO or RFP.
Non-Disclosure Agreement (NDA): An NDA is a legal agreement between two parties that outlines confidential material or information that the parties wish to share with one another for specific purposes but wish to restrict access to or by third parties. It is a contract, but it is not considered mutually binding in the same sense as a PO or RFP.
Work Breakdown Structure (WBS): A WBS is a hierarchical structure that breaks down the scope of work for a project into smaller, manageable components. It is not a contract or legally binding document but rather a planning tool that helps project managers organize and track the work to be done.
Key Performance Indicators (KPIs): KPIs are measurable values used to track and assess the progress of an organization or project towards its goals. They are not mutually binding as they are not a contract or legal document but rather a tool used to measure performance.
