APEGS National Professional Practice Examination (NPPE) Exam NPPE Question # 21 Topic 3 Discussion
NPPE Exam Topic 3 Question 21 Discussion:
Question #: 21
Topic #: 3
In a contract, a force majeure clause is a clause that
A.
contains threats or coercion that may be used to induce a party to enter into a contract
B.
Is particularly biased towards one party and may be evidence of an inequality in bargaining power
C.
Is a misleading or deceptive statement made by one party to Induce the other party to enter into the contract
D.
provides relief or contractual obligations due to future events that the parties agree make the contract impossible to execute and are beyond their control
A force majeure clause in a contract (Option D) provides relief from contractual obligations due to future events that are beyond the control of the parties and make the contract impossible to execute. This clause is standard in contracts to protect all parties involved from circumstances such as natural disasters, war, or other "acts of God" that prevent one or all parties from fulfilling their contractual duties. It is not about coercion, bias, or misleading statements but about managing risk in unforeseen scenarios.
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