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PMBOK 12.2.3.2 p. 489


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A contract is a mutually binding agreement that obligates the seller to provide the specified products, services, or results; obligates the buyer to compensate the seller; represents a legal relationship that is subject to remedy in the courts. The major components in an agreement document will vary, and may include but are not limited to:

  • Procurement statement of work or major deliverables;
  • Schedule, milestones, or date by which a schedule is required;
  • Performance reporting;
  • Pricing and payment terms;
  • Inspection, quality, and acceptance criteria;
  • Warranty and future product support;
  • Incentives and penalties;
  • Insurance and performance bonds;
  • Subordinate subcontractor approvals;
  • General terms and conditions;
  • Change request handling; and
  • Termination clause and alternative dispute resolution mechanism