Ace the CPCM Challenge 2025 – Unlock Your Contract Management Superpowers!

A service contract is defined primarily by its focus on providing services rather than products. This means that the primary obligation of the parties involved is service-oriented, which can include activities like maintenance, consulting, or other professional services that do not result in the ownership of physical goods.

In contrast, other choices mention elements that do not accurately represent the essence of a service contract. While a contract can include penalties for late delivery, that aspect alone does not distinguish it as a service contract; penalties can apply to contracts for goods or services. Also, the notion that a service contract is exclusively for government entities is incorrect because service contracts are prevalent in both public and private sectors. Finally, a contract providing goods without services clearly identifies it as a product contract, again falling outside the definition of a service contract. Thus, the emphasis on services is the hallmark of a service contract.