Contract Formation and Enforceability

Introduction and Context

Construction projects are delivered through networks of contracts: the employer appoints consultants and contractors, the main contractor engages subcontractors, suppliers provide materials, and lenders, insurers, and regulators impose additional requirements. A technically excellent project may still fail commercially if the underlying agreement is not properly formed, if an apparent signatory lacked authority, or if a pre-contract statement is later shown to be misleading.

Contract law determines whether promises made during project procurement become legally enforceable obligations. It also determines the content of those obligations, the persons entitled to enforce them, and the circumstances in which an agreement may be avoided or declared unenforceable. This chapter adopts general common-law principles while recognising that statutory rules differ between jurisdictions. Students must therefore consult the governing law, applicable construction legislation, procurement regulations, and the chosen standard form.

A useful analytical sequence is:

1. Identify the parties and their legal capacity.
2. Determine whether there was offer and acceptance, or another objective basis for agreement.
3. Test consideration and intention to create legal relations.
4. Check certainty, completeness, authority, and required formalities.
5. Consider privity and agency.
6. Investigate misrepresentation, mistake, illegality, and statutory controls.
7. Examine electronic records, signatures, and pre-contract documents.

Learning Objectives

By the end of this chapter, the learner should be able to:

• explain the elements of a legally enforceable contract;
• distinguish an offer from an invitation to treat and from preliminary negotiation;
• analyse acceptance, counter-offers, consideration, intention, capacity, and authority;
• assess certainty, completeness, privity, and agency in construction arrangements;
• identify the legal effects of misrepresentation, mistake, and illegality;
• evaluate electronic contracting and the legal significance of letters of intent, memoranda, tender documents, and site instructions; and
• apply these principles to procurement and contract-administration problems.

1. The Contract as an Enforceable Legal Relationship

A contract is an agreement that the law recognises as creating enforceable rights and obligations. Agreement alone is not always sufficient. Depending on the jurisdiction and transaction, enforceability may require consideration, intention to create legal relations, capacity, compliance with formalities, and a lawful and sufficiently certain subject matter.

Construction contracts are usually bilateral: each party makes promises in exchange for promises by the other. The contractor promises performance of defined work, while the employer promises payment and cooperation. Some arrangements also contain unilateral features, such as a promise to pay a bonus if completion occurs early.

The court generally applies an objective test. It asks what a reasonable person, knowing the relevant circumstances, would understand from the parties’ words and conduct, rather than what one party privately intended. This protects commercial reliability: parties must be able to organise labour, finance, procurement, and risk on the basis of observable commitments.

Important terminology

2. Offer and Invitation to Treat

An offer must show a present intention to be bound upon acceptance. It must be sufficiently definite and communicated to the offeree. A tender invitation, advertisement, price list, or request for quotation is normally an invitation to treat: it invites others to submit offers rather than itself constituting an offer.

The distinction matters in construction procurement. An employer’s request for tenders usually invites contractors to make offers. The contractor’s tender is generally the offer, and the employer’s unconditional acceptance forms the contract. However, tender documents may themselves create a separate process contract, particularly where the employer promises to consider compliant tenders according to stated procedures.

An offer may terminate through:

• acceptance;
• rejection;
• a counter-offer;
• expiry of a stated or reasonable period;
• revocation communicated before acceptance; or
• death, insolvency, or another event where the legal system treats the offer as terminated.

A counter-offer is not acceptance. It proposes different terms and usually rejects the original offer. A request for information, however, may not reject an offer if it merely seeks clarification.

Construction example

An employer invites tenders for a warehouse. Contractor A submits a priced tender stating that it remains open for 30 days. On day 10 the employer asks whether the contractor can use an alternative cladding product. That question is ordinarily a request for information, not a counter-offer. If the employer instead says, “We accept only if the price is reduced by 5%,” the response is a counter-offer, not acceptance of Contractor A’s tender.

3. Acceptance and the Battle of Forms

Acceptance must correspond with the offer. A purported acceptance that changes important terms is generally a counter-offer. The parties may nevertheless form a contract through their subsequent conduct, but identifying the terms becomes difficult.

Acceptance must be communicated in the manner authorised by the offer or, if no method is specified, by a reasonable method. Silence normally does not amount to acceptance. Conduct can communicate acceptance where the circumstances objectively demonstrate assent, such as commencing work after receiving an order, although conduct may also create uncertainty if the parties were still negotiating.

Electronic communication creates timing questions. Email acceptance may be effective when received in the designated inbox, subject to applicable electronic-transactions legislation and the contract’s communication clause. Automated acknowledgements may confirm receipt without proving substantive acceptance.

The battle of forms

Construction transactions often involve a purchase order, quotation, subcontract, standard conditions, delivery note, and invoice, each containing different terms. The traditional analysis asks which document constituted the offer and which constituted acceptance. Courts may also examine the parties’ conduct and whether a later document was expressly accepted.

Commercial risk is reduced by stating clearly:

• which document contains the contractual terms;
• whether an order is conditional on acceptance of specified conditions;
• the priority of documents in case of inconsistency; and
• when the contract becomes effective.

A clear order-of-precedence clause is particularly important for scope, design responsibility, payment, extensions of time, limitation clauses, and dispute resolution.

4. Consideration and Intention to Create Legal Relations

Consideration is the price of a promise in a simple contract. It must generally be sufficient in law, though it need not be economically adequate. A promise to perform an existing contractual duty may raise problems if no new legal benefit or burden is provided, although modern cases and statutory regimes may recognise practical benefits in appropriate circumstances.

Past consideration is generally not consideration: an act performed before a promise is made is usually not the bargained-for exchange. Exceptions may apply where the act was performed at the promisor’s request and the parties understood that payment would follow.

Construction applications include:

• a variation increasing the contractor’s price in exchange for additional work;
• an agreement to accelerate in exchange for an agreed acceleration payment;
• a subcontractor’s promise to meet a revised programme in return for defined compensation; and
• a settlement in which each party gives up a disputed claim.

A promise to pay more for exactly the same performance may be vulnerable where the contractor supplies no additional consideration, although practical benefit, economic duress, or statutory modification may affect the result. A promise to accept less than the amount due also raises separate rules concerning part-payment of debt.

Commercial agreements are presumed to involve an intention to create legal relations. Social and domestic arrangements are presumed otherwise, although these are rebuttable presumptions. In construction, tenders, signed contracts, purchase orders, and paid work strongly indicate legal intention. A statement such as “subject to contract” usually signals that negotiations are not yet binding, but the wording and conduct must be examined in context.

5. Capacity and Authority

Capacity

Capacity concerns whether a person or organisation can enter the transaction with legal effect. Relevant categories may include minors, persons lacking mental capacity, companies, partnerships, public bodies, and insolvent entities. Statutory rules vary. A company is a separate legal person, and its constitution, legislation, board procedures, and delegated authority may affect transactions.

Construction professionals should conduct proportionate due diligence, including checking:

• the legal name and registration of each party;
• ownership and insolvency information where relevant;
• the signatory’s position and delegation;
• licences or public procurement authority;
• insurance and bonding requirements; and
• whether guarantees or parent-company support are required.

Actual and apparent authority

An agent acts on behalf of a principal. Actual authority may be express, such as a written delegation, or implied from the agent’s role and the principal’s conduct. Apparent, or ostensible, authority arises where the principal represents to a third party that the agent has authority and the third party reasonably relies on that representation.

The agent’s private authority is not enough to establish apparent authority; the representation must generally come from the principal or someone with authority to make it. A principal may nevertheless be bound by an agent’s unauthorised act through ratification, provided the legal requirements for ratification are satisfied.

Practical authority matrix

A project manager who can issue technical instructions may not have authority to agree a price increase or waive a contractual condition. Contracts should state the scope and limits of representative authority.

6. Certainty, Completeness, and Formalities

An agreement must be sufficiently certain for a court to determine what each party promised. Essential matters commonly include the parties, scope, price or pricing mechanism, time, quality standard, payment procedure, and allocation of design responsibility. A contract need not address every detail if the law supplies a reasonable term or the document provides an objective mechanism for resolving the detail.

An agreement may fail for uncertainty where essential provisions are contradictory, illusory, or incapable of objective determination. “The contractor will carry out all necessary work for a fair price” may be workable in some contexts, but it is riskier than a defined scope, valuation method, and change procedure.

Formalities

Many contracts can be made orally, but legislation may require writing or signature for particular transactions, such as land interests, guarantees, consumer agreements, or public procurement. Construction statutes may also impose payment, adjudication, licensing, or record-keeping requirements.

A signature generally authenticates intention, but its legal effect depends on the document and applicable law. A deed may require additional formalities and may not require consideration. Parties should not assume that a document is a deed merely because it is labelled “deed.”

7. Privity and Agency

The doctrine of privity generally means that only parties to a contract can enforce its terms or be sued upon them. This creates difficulty in construction chains. An employer may want direct rights against a specialist subcontractor, while a subcontractor may need payment rights against the employer if the main contractor becomes insolvent.

Common solutions include:

• a collateral warranty;
• a direct agreement or novation;
• a third-party rights statute;
• assignment of rights, subject to restrictions;
• a trust arrangement where legally effective; or
• a guarantee or bond.

An assignment normally transfers a benefit, not the burden of contractual performance. Transferring the burden generally requires novation, which substitutes a new party with the consent of the relevant parties.

Agency can produce a different result: an authorised agent’s contract is generally between the principal and the third party, not the agent personally, unless the agent contracts as a principal or assumes personal liability.

8. Misrepresentation

A misrepresentation is a false statement of existing or past fact, or in some circumstances law, made to another party that induces entry into the contract. Opinions, future intentions, and sales puffery are not automatically misrepresentations, but an opinion expressed without honest or reasonable basis may be actionable. A statement becomes misleading if circumstances change and the speaker fails to correct it before contracting.

Misrepresentation may be fraudulent, negligent, or innocent, depending on the applicable legal test and available statutory remedies. Possible consequences include rescission, damages, or both, subject to bars such as affirmation, delay, impossibility of restoration, and intervention of third-party rights.

In construction procurement, risk areas include:

• overstating site investigation data;
• presenting an unrealistic programme as achievable when the speaker knows it is not;
• describing ground conditions inaccurately;
• claiming that approvals or permits have been obtained;
• representing that a design complies with regulations when it does not; and
• concealing known defects or contamination.

A contract should distinguish warranties, representations, and agreed information, while avoiding exclusion clauses that are ineffective under statutory controls or public policy. Entire-agreement clauses may regulate reliance on pre-contract statements, but they do not automatically protect fraud or defeat mandatory legislation.

9. Mistake

Mistake concerns a fundamental error affecting agreement or the basis of the transaction. Common mistake occurs when both parties share a mistaken assumption. Mutual mistake occurs when each party has a different understanding. Unilateral mistake occurs when one party is mistaken and the other knows or ought to know of the error.

Only sufficiently fundamental mistakes normally affect validity. A mistaken belief about profitability, market price, or commercial advantage will usually be a risk of the bargain rather than a ground for avoiding the contract. Mistakes about identity, subject matter, or an essential term may have more serious consequences.

Construction examples include both parties contracting for a building site that had already been destroyed, or a contractor pricing on the basis of a drawing that both parties believed formed part of the contract when it did not. Courts are cautious: allocating site-risk through express conditions, surveys, reliance clauses, and change provisions may prevent a party from using mistake to escape an unprofitable contract.

10. Illegality and Public Policy

A contract may be unenforceable when its purpose or performance violates legislation, licensing requirements, sanctions, procurement rules, or public policy. Illegality may concern bribery, collusive tendering, money laundering, tax evasion, unlicensed work, unsafe practices, or contracts designed to evade statutory protections.

The consequences depend on the jurisdiction and the nature of the illegality. A court may refuse enforcement, sever an unlawful provision, impose statutory penalties, or permit limited recovery in exceptional circumstances. Parties cannot rely on contract drafting to legalise conduct prohibited by statute.

Governance controls should include:

• anti-bribery and conflict-of-interest declarations;
• transparent tender evaluation;
• beneficial-ownership checks;
• sanctions and modern-slavery screening where applicable;
• accurate records of variations and payments; and
• escalation and whistleblowing procedures.

11. Electronic Contracting

Electronic contracting is now routine. Agreements may be formed through email, electronic procurement portals, digital signatures, click acceptance, electronic purchase orders, and project-management platforms. Electronic-transactions legislation commonly recognises electronic records and signatures, but requirements differ concerning reliability, identity verification, retention, witnesses, and excluded documents.

A sound electronic process should establish:

1. user identity and authority;
2. the document version and audit trail;
3. the time and place of sending and receipt;
4. consent to electronic communications;
5. signature method and authentication;
6. document retention and accessibility; and
7. procedures for correcting errors or revoking access.

A digital signature may evidence intention, but it does not cure uncertainty, lack of authority, fraud, or illegality. Artificial-intelligence tools can generate contract text, compare clauses, and identify inconsistencies, but human professionals remain responsible for verifying scope, legal effect, confidentiality, data protection, and jurisdiction-specific compliance. AI output should be treated as an aid, not as legal authority.

12. Pre-Contract Documents

Pre-contract documents frequently influence construction disputes. Their legal effect depends on wording, context, and conduct.

Letters of intent

A letter of intent may be:

• non-binding evidence of negotiations;
• a binding preliminary contract for limited work; or
• an interim contract under which work is paid on a defined basis until the final agreement is signed.

The document should identify the authorised work, price or valuation method, start and expiry date, payment entitlement, design responsibility, insurance, termination rights, and intended transition to the final contract. “Proceed at risk” is not a substitute for a clear allocation of risk.

Memoranda and heads of terms

Heads of terms may record agreed commercial points while leaving detailed drafting for later. Phrases such as “subject to contract” commonly indicate that no final contract exists, but particular provisions—confidentiality, exclusivity, costs, governing law, or dispute resolution—may be expressly binding.

Tender documents and clarifications

Tender drawings, specifications, bills of quantities, schedules, bidder questions, and clarifications may become contractual documents. The final agreement should identify their status and priority. Oral clarifications should be recorded in a controlled addendum rather than left to individual recollection.

Reliance and pre-contract work

Even where no final contract exists, a party may incur costs or perform work in reliance on representations. Possible legal routes include restitution, quantum meruit, estoppel, or a separate preliminary contract, but outcomes are fact-sensitive. The safest practice is to document authority and payment before allowing mobilisation or design development.

13. Applied Case: The Riverside Community Centre

The following is an illustrative fictional case.

Background

The Riverside Council invited tenders for a community centre. Its invitation stated that tenders had to remain open for 60 days and that the council expected to award the contract to the lowest compliant tender. BuildRight Ltd submitted a tender using the council’s pricing schedule. The project architect emailed BuildRight asking whether it could commence enabling works within two weeks. BuildRight replied, “We can start, subject to agreement of the final contract.” The architect then instructed site clearance. BuildRight mobilised and incurred costs.

Three weeks later, the council issued a purchase order referring to its standard conditions. BuildRight’s earlier tender referred to its own conditions, which contained a different limitation of liability and a different payment period. The council later announced that it would award the main contract to another contractor. BuildRight claimed that a contract had already been formed and sought payment for mobilisation and lost profit.

Analysis

The tender was likely an offer if it was sufficiently definite and intended to be accepted by the council. The invitation itself was probably an invitation to treat, although its procedural promises might create a separate tender-process obligation. The architect’s email did not clearly accept the tender: “subject to agreement of the final contract” points away from a complete main contract. The site instruction may nevertheless have created an interim agreement if the architect had authority and the parties objectively agreed that BuildRight would perform enabling works for payment.

The architect’s authority must be examined. Authority to administer design does not necessarily include authority to award the main contract. If the council represented that the architect could instruct enabling works, BuildRight may have a stronger apparent-authority argument for that limited work than for the entire project.

The competing standard conditions illustrate a battle of forms. The council’s purchase order may be a later offer or an attempted acceptance, depending on the documents and conduct. The parties’ conduct—mobilisation, instructions, and performance—may support a contract for the work actually undertaken, but it does not automatically establish agreement on every term.

Approach and likely outcome

The parties should separate two questions: first, whether a main construction contract was formed; second, whether a limited contract or restitutionary claim arose for enabling works. The evidence should include the tender, emails, authority delegations, site instruction, purchase order, records of costs, and communications about conditions.

A court might conclude that no main contract existed because final terms remained subject to agreement. It might nevertheless find an interim contract for instructed site clearance, with payment assessed under the agreed or objectively reasonable valuation method. BuildRight’s claim for lost profit on the unawarded main contract would be much more difficult unless acceptance and authority were proved.

Learning points

• “Subject to contract” is important but not conclusive.
• A limited interim contract can arise even when the main contract does not.
• Representatives need clearly defined authority.
• Tender conditions and purchase-order conditions should be reconciled before work begins.
• Every instruction should identify scope, price basis, contractual status, and approval authority.

14. Professional Practice and Risk Management

Contract formation is not merely a legal exercise; it is a project-control function. Organisations should maintain a contract-formation checklist covering party identity, authority, scope, pricing, programme, design responsibility, insurance, security, payment, variations, disputes, governing law, document priority, and electronic records.

Professionals should avoid:

• commencing substantial work on informal assurances;
• using “subject to contract” while behaving as though a final contract exists;
• allowing technical staff to agree commercial amendments without authority;
• copying standard conditions without checking statutory compliance;
• treating a signed document as valid without verifying capacity and execution formalities; and
• relying on AI-generated clauses without legal and operational review.

The ethical standard is higher than merely avoiding unenforceability. Engineers, quantity surveyors, architects, project managers, and contractors should communicate material assumptions accurately, preserve procurement integrity, disclose conflicts, and maintain records that permit independent review.

Challenges and Limitations

Contract formation principles are fact-sensitive. Different jurisdictions may classify invitations, electronic communications, signatures, guarantees, and third-party rights differently. Standard forms may alter default rules through express clauses. Courts may also infer agreement from performance where documentation is incomplete, producing uncertainty and expense.

The objective test can appear harsh where a party privately misunderstood a term. Formal documents can also conceal unequal bargaining power, particularly for small subcontractors. Statutory regimes may respond through mandatory payment rules, unfair-term controls, consumer protection, or procurement requirements. Consequently, legal analysis must combine common-law principles with the governing statute and contract wording.

Contemporary Developments

Digital procurement, building-information modelling, collaborative platforms, electronic bills, smart-contract concepts, and automated clause comparison are changing how agreement is recorded. A blockchain record may improve evidence of timing and integrity, but it does not by itself establish capacity, authority, lawful purpose, or agreement on legal terms. Smart-contract code may execute an operation while the legal contract remains dependent on written terms, external facts, and dispute mechanisms.

The practical trend is toward integrated digital governance: controlled templates, verified approvals, auditable communications, data-security measures, and clear rules about which platform record prevails. Technology strengthens evidence only when the underlying process is authorised and coherent.

Chapter Summary

An enforceable construction contract normally requires objectively demonstrated agreement, consideration where applicable, intention to create legal relations, capacity, authority, certainty, legality, and compliance with required formalities. An offer must be distinguished from an invitation to treat, and acceptance must generally be clear, unconditional, and properly communicated. Tendering and purchase-order exchanges commonly create battle-of-forms risks.

Authority is central because a technically involved project representative may lack power to bind the employer to price, scope, or waiver changes. Privity limits enforcement by non-parties, while agency, collateral warranties, third-party rights, assignment, and novation provide mechanisms for managing construction-chain relationships. Misrepresentation and fundamental mistake may affect enforceability, while illegality may prevent enforcement altogether.

Electronic records and signatures can form valid contracts when identity, authority, timing, consent, and statutory requirements are controlled. Letters of intent, heads of terms, tender documents, clarifications, and site instructions must be analysed according to their wording and conduct rather than their labels. The best professional practice is to document scope, authority, commercial terms, priority, and the legal status of pre-contract work before mobilisation.

Key Terms

Offer: A final expression of willingness to contract on stated terms upon acceptance.

Invitation to treat: A communication inviting others to make offers.

Acceptance: Unqualified assent to the terms of an offer.

Consideration: The value exchanged for a promise in a simple contract.

Intention to create legal relations: The objective intention that an arrangement should have legal consequences.

Capacity: Legal ability to enter a binding agreement.

Actual authority: Authority expressly or impliedly granted by a principal to an agent.

Apparent authority: Authority arising from a principal’s representation and a third party’s reasonable reliance.

Certainty: Sufficient clarity for contractual obligations to be identified and enforced.

Privity: The general rule that only contract parties may enforce or be bound by contractual terms.

Agency: A relationship in which an agent acts for a principal in dealings with third parties.

Misrepresentation: A false pre-contract statement that induces a contract.

Mistake: A fundamental erroneous assumption affecting agreement or the transaction.

Illegality: Unlawfulness in the purpose, formation, or performance of a contract.

Novation: Substitution of a new contracting party with the required consent.

Collateral warranty: A separate contract supporting obligations owed to a non-party.

Letter of intent: A document recording proposed or limited interim arrangements before a final contract.

Battle of forms: A conflict arising when exchanged documents contain inconsistent standard terms.

Electronic signature: Electronic data used by a person to authenticate or approve a document.

Condition precedent: An event that must occur before a contractual duty or relationship becomes operative.

Review Questions

5 Short Answer Questions

1. What is the difference between an offer and an invitation to treat?
2. Why does a counter-offer generally terminate the original offer?
3. Distinguish actual authority from apparent authority.
4. What is the general effect of privity in a construction contract chain?
5. Identify three controls that improve the reliability of electronic contracting.

5 Long Answer Questions

1. Explain the requirements for formation of a construction contract and illustrate each requirement with a project example.
2. Analyse the battle of forms between a contractor’s quotation and an employer’s purchase order.
3. Discuss how letters of intent can create either non-binding negotiations or binding interim arrangements.
4. Explain misrepresentation, mistake, and illegality as separate threats to enforceability.
5. Evaluate the role of capacity, authority, and execution formalities in contracts made by companies and public bodies.

3 Analytical / Application Questions

1. An architect instructs a subcontractor to begin work, but the employer later denies that the architect had authority to appoint the subcontractor. Analyse the possible contractual and agency arguments.
2. A contractor’s tender relies on ground information supplied by the employer, which the employer knows is incomplete. The contractor signs after receiving oral reassurance that conditions are normal. Analyse possible misrepresentation, mistake, and contractual-risk issues.
3. A supplier’s quotation, the contractor’s purchase order, and the supplier’s delivery note contain different payment and limitation terms. Using offer, acceptance, conduct, and document-priority principles, determine what further evidence should be collected and how future risk should be controlled.

Multiple Choice Questions with Answers

Question 1

Which statement best describes an invitation to treat?

A. A final promise that becomes binding immediately

B. A communication inviting others to submit offers

C. An unconditional acceptance of a tender

D. A contractual variation signed by an agent

Correct Answer: B. A communication inviting others to submit offers

Question 2

A contractor replies to an employer’s tender offer: “We accept only if payment is made within 14 days.” This response is generally:

A. An unconditional acceptance

B. A request for information

C. A counter-offer

D. A representation

Correct Answer: C. A counter-offer

Question 3

Which fact most strongly supports apparent authority?

A. The agent privately believed authority existed

B. The principal represented that the agent had authority and the third party reasonably relied on it

C. The agent had worked in the industry for many years

D. The third party assumed every project manager could sign contracts

Correct Answer: B. The principal represented that the agent had authority and the third party reasonably relied on it

Question 4

What is the general effect of privity?

A. Every person affected by a project may enforce the contract

B. Only the architect may enforce the main contract

C. Only parties to the contract may enforce or be bound by it, subject to exceptions

D. Subcontractors automatically become parties to the employer’s contract

Correct Answer: C. Only parties to the contract may enforce or be bound by it, subject to exceptions

Question 5

Which statement about consideration is generally correct?

A. It must always be equal in economic value to the promise

B. It is the value exchanged for a promise in a simple contract

C. It is unnecessary in every type of contract

D. It can always consist of an act performed years before the promise

Correct Answer: B. It is the value exchanged for a promise in a simple contract

Question 6

A letter states, “subject to contract,” while the parties continue negotiating essential price and scope terms. The phrase most strongly indicates that:

A. A complete main contract has already formed

B. The negotiations are probably not yet intended to create the final contract

C. The contractor has waived all rights to payment

D. The letter is automatically an executed deed

Correct Answer: B. The negotiations are probably not yet intended to create the final contract

Question 7

Which is most likely to be a misrepresentation in a construction procurement?

A. A clearly labelled estimate that later proves inaccurate

B. A false statement about existing ground conditions that induces the tender

C. A contractor’s disappointment with its profit margin

D. A lawful change made under the variation clause

Correct Answer: B. A false statement about existing ground conditions that induces the tender

Question 8

What is novation?

A. Transfer of a contractual benefit without consent

B. Substitution of a new contracting party with the required consent

C. Correction of a typographical error

D. A non-binding invitation to tender

Correct Answer: B. Substitution of a new contracting party with the required consent

Question 9

Which control is most useful in preventing an unauthorised variation?

A. Allowing any site employee to approve price changes

B. Using verbal instructions only

C. Defining representative authority and approval thresholds in writing

D. Deleting earlier project communications

Correct Answer: C. Defining representative authority and approval thresholds in writing

Question 10

A digital signature will generally:

A. Automatically cure an illegal contract

B. Prove that the signatory had unlimited authority

C. Provide evidence of authentication or approval, subject to applicable law and circumstances

D. Make uncertain terms enforceable in every jurisdiction

Correct Answer: C. Provide evidence of authentication or approval, subject to applicable law and circumstances