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Ethics & Legal Compliance in Purchasing Flashcards

7 cards from real CPP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. Several suppliers secretly agree on who will submit the lowest bid on each contract. This is:

    Answer: Bid rigging, a per se violation of the Sherman Act

    Bid rigging is collusion among competitors and counts as a per se illegal restraint of trade under Section 1 of the Sherman Act.

  2. Under UCC §2-207, when a seller's acknowledgment contains terms that differ from the buyer's purchase order, between merchants the additional terms generally:

    Answer: Become part of the contract unless they materially alter it or the offer limits acceptance to its terms

    The 'battle of the forms' rule lets additional terms in between merchants unless they materially alter the deal, are objected to, or the offer expressly limits acceptance.

  3. Which statute lets whistleblowers sue on the government's behalf over fraudulent claims and share in the recovery?

    Answer: False Claims Act

    The False Claims Act's qui tam provisions allow private relators to sue and receive a share of the recovery.

  4. A supplier sends a buyer a $40 holiday fruit basket. The company policy allows nominal gifts under $50 if disclosed. The buyer should:

    Answer: Accept it, disclose it per policy, and ideally share it with the team

    Nominal gifts within policy limits may be accepted when disclosed, and sharing them reduces any appearance of personal benefit.

  5. Using a confidential supplier design in a request for proposal sent to that supplier's competitors most directly violates:

    Answer: Protection of proprietary information and trade secrets

    Sharing a supplier's proprietary information without permission breaches confidentiality obligations and may count as trade secret misappropriation.

  6. Under the UCC, a merchant's written and signed promise to keep an offer open, with no consideration given, is called a:

    Answer: Firm offer, irrevocable for up to three months

    UCC §2-205 makes a merchant's signed firm offer irrevocable without consideration for the stated time, up to three months.

  7. Before awarding a contract to a new overseas supplier, a U.S. buyer should screen the supplier against which list to avoid sanctions violations?

    Answer: OFAC's Specially Designated Nationals (SDN) List

    The Treasury's OFAC SDN List names sanctioned parties that U.S. persons are generally barred from dealing with.