Impose contractual terms on data use: Which action most | AIGP
7-day money-back guarantee — full refund within 7 days of purchase if you've completed under 20% of the questions. See pricing →
Certifications Tools Flashcards Career Paths Exam Guides Blog Pricing For Teams About

Language

✓ EnglishDeutschEspañolFrançaisPortuguês
Check readiness — free →

Impose contractual terms on data use: Which action most effectively addresses these constraints?

AIGP Understanding the Foundations of AI Governance Hard

A pre-procurement risk assessment plus contractual data-use, documentation, and audit terms best manages third-party AI risk.

The question

A retailer plans to procure an AI fraud-detection service from a vendor that will process customer transaction data, retrain on that data, and provide no documentation of its training sources. The retailer must limit supply-chain risk while remaining accountable to regulators. Which action most effectively addresses these constraints?

Preparing for AIGP? Take the free 5-min readiness quiz →

  1. Rely on the vendor's public reputation and security certifications, since a trusted brand signals acceptable risk
    Plausible but wrong: reputation and certifications do not give data-use limits, documentation, or audit rights the regulator expects.
  2. Proceed under the standard acceptable-use policy, treating the vendor like a routine software supplier with no extra terms
    Plausible but wrong: an AI vendor retraining on customer data is not a routine supplier and needs AI-specific contractual controls.
  3. Prohibit all external AI vendors and rebuild the fraud-detection capability fully in house to remove third-party risk
    Almost right in intent but disproportionate: a blanket ban forgoes viable managed procurement and is rarely feasible or necessary.
  4. Impose contractual terms on data use, documentation, and audit rights, backed by a pre-procurement risk assessment
    Correct: assessments plus contractual data-use, documentation, and audit clauses directly address supply-chain risk and accountability.
The trap
Treating vendor reputation or security certifications as a substitute for contractual data-use and audit obligations.

How to remember it

A pre-procurement risk assessment plus contractual data-use, documentation, and audit terms best manages third-party AI risk.

How many of these would you get right?

One of 1581 AIGP questions on Certsqill. Take a free five-minute check and see your score per domain — not one number, but which section to open tonight.

Test your AIGP readiness — free

More Understanding the Foundations of AI Governance questions

Part of the Certsqill AIGP question bank · Understanding the Foundations of AI Governance · Every answer, right and wrong, comes with its own explanation.