CAPM (Certified Associate in Project Management) Practice Exam

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What does privity refer to?

Privacy laws related to contracts
The exclusive right to negotiate a contract
Contractual relationship between two parties of a contract
A private agreement not disclosed to the public

The correct answer is: Contractual relationship between two parties of a contract

Privity refers to the contractual relationship between the parties involved in a contract. It establishes the direct involvement and connection between two parties who are bound by the terms and conditions of a contract. This relationship is essential for legally enforcing the terms of the agreement and ensuring that both parties fulfill their obligations. Option C is correct as it accurately defines privity within the context of contracts. The other options are incorrect because: - Option A refers to privacy laws, which are unrelated to the concept of privity in contracts. - Option B refers to the exclusive right to negotiate a contract, which is not the definition of privity. - Option D describes a private agreement not disclosed to the public, which is also not the definition of privity in contract law.