National Board Of Examination (NBE) Arts Practice Exam

Which contract type typically requires no further payment at the time of service if prearranged properly?

1. Expressed contract

2. Pre-paid non-guaranteed

3. Pre-funded guaranteed

4. Implied contract

The correct answer is: Pre-funded guaranteed

The option that aligns with the description of requiring no further payment at the time of service, given proper prearrangement, is the pre-funded guaranteed contract. This type of contract involves the advance payment for services, ensuring that the costs are covered before the service is rendered. The funds are set aside specifically for the planned services, guaranteeing that the provider is compensated without the need for additional payments during the service execution. In this case, individuals or entities planning for a specific service benefit from securing their financial obligations ahead of time, minimizing any payment concerns at the point of service. This is particularly useful in contexts where budgeting and financial planning are essential. Proper prearrangement involves not only the payment but also clearly defined terms ensuring that the services are rendered as stipulated, thus eliminating the concern for further payments or misunderstandings at the time of service. Other types of contracts, such as expressed, implied, or pre-paid non-guaranteed, do not carry the same assurance of having all costs covered upfront without the possibility of additional payments being required at the time of service.