PMP lesson · Closing & Integration · Closing the project · lesson 4 of 4 · about 6 minutes
Contract closure: settling claims and closing procurements
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Goal: After this lesson you can close a contract correctly: acceptance, punch list, claims, payments, warranty, records and formal notice.
1The situation
Almost closed
All conveyor deliverables were installed and accepted. The project manager wants to close the subcontract and release the team. But the subcontractor has an open claim for site waiting time, two punch-list items remain, and the final invoice is waiting.
Closing now would leave money, liability and a dispute hanging, possibly for years.
2Close only when everything is settled
A contract is closed when all obligations on both sides are met:
Accepted
Deliverables
Formally accepted; punch list done or agreed.
Settled
Claims
Disputes resolved, negotiation first.
Paid & recorded
Finance and files
Final payment, warranty start, complete records, written closure.
Open claim or unfinished items → resolve first, then close formally. Don't use payment as leverage to force a claim's withdrawal.
3Contract closure checklist
Before closing a contract
Check
All deliverables accepted
Formal acceptance against criteria
Punch-list items
Closed or formally agreed (e.g. retention until done)
Claims and disputes
Settled (negotiation first)
Payments
Final invoice approved; retention released per contract
Exam-style question 1. All deliverables under a subcontract are installed and accepted, and the project manager wants to close it. The subcontractor has an open claim for additional site waiting time, and two minor punch-list items remain. What should the project manager do?
A. Close the contract immediately
B. Close and handle the claim informally afterwards
C. Resolve the claim and the punch-list items, confirm all obligations are met, then formally close the contract
D. Withhold final payment until the claim is withdrawn
Show the answer and the decode
Answer: C.
In simple English
Open claim and open items at closure.
What is the question really asking?
The right sequence.
Key words / trigger
“open claim … punch-list items remain”
PMP logic
Close only after claims are settled and obligations met.
Why the wrong answer looks attractive
Closing quickly to free the team leaves the dispute open.
5Remember this
Your memory card
Close when all obligations are met: acceptance, punch list, claims, payment
Settle claims first (negotiation); never use payment as leverage
Document warranty, complete records, issue written closure
Procurement audit → lessons for future procurements