The risk associated with the dependence on vendor stability in an IT project is known as?

The risk associated with dependence on vendor stability in an IT project is categorized as contractual risk. This type of risk involves the potential issues that could arise from the agreements and relationships established with external vendors. When an organization relies on a vendor, it is crucial to assess that vendor's financial health, stability, and operational capability to fulfill their obligations as outlined in the contract.

If a vendor faces financial difficulties or goes out of business, it can significantly affect the project timeline, budget, and quality of deliverables. Therefore, understanding and managing contractual risk is vital in ensuring that the project's critical dependencies are secure and that there are contingency plans in place should a vendor fail to deliver as expected. This focus on the contractual relationship highlights the importance of thorough due diligence and risk assessment when entering into agreements with third-party vendors.