CAPM (Certified Associate in Project Management) Practice Exam

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What describes a letter contract?

An informal email agreement
A binding document between two international parties
A written preliminary contract authorizing immediate start of work
A detailed contract requiring all signatures

The correct answer is: A written preliminary contract authorizing immediate start of work

A letter contract is a written preliminary contract that authorizes the immediate start of work before a formal contract is finalized. It is typically utilized when time is of the essence to commence work on a project and enables the parties involved to get started quickly while the detailed contract is being negotiated. Option C correctly describes the nature and purpose of a letter contract.