CIPS - Commercial Contracting (L4M3) paper 5

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CIPS - Commercial Contracting (L4M3) paper 5.
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⏱️Time limit: 1 hour 30 minutes

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EAC Facilities Management is launching a suburban construction project. They are evaluating whether to adopt the NEC or FIDIC standard forms of contract for this endeavor. Could this choice benefit their operations?

Yes, these forms will eliminate all the risks

Yes, these forms aim at balanced risk/reward allocation between the parties

No, the contractor won't understand the legal terminology in the contract forms

No, the buyer will bear all the risks derived from the contract

None

Which of the following best describes the role of insurance?

Professional indemnity insurance protects businesses from financial liabilities arising from their supplied products

An insurance policy transfers the legal liabilities from the insured to the insurer

An insurance policy serves as a mechanism to support indemnity claims

The supplier is always responsible for paying the insurance premium for goods-in-transit

None

Which of these are classified as offers under the general principles of contract formation in English law? Select TWO options:

Catalogue

Invitation to tender

Quotation

Purchase order

What is the term for liability imposed by law without requiring proof of fault?

Current liability

Strict liability

Contingent liability

Non- current liabilty

None

Which of the following provisions qualify as liquidated damages clauses?

1. "In case of delay by the Contractor, they must pay 0.25% of the Contract Price per day of delay, capped at 10% of the Initial Contract Price."
2. "If the Seller delays delivery, they must pay $x per day of delay."
3. "The Contractor will indemnify the Buyer against all claims or suits arising from the contract, except those caused by the Buyer's negligence."

4. "In case of delays, the remedy will be agreed upon during delivery."

3 and 4 only

1 and 2 only

1 and 3 only

2 and 4 only

None

Identify the clause that specifically addresses issues of fraud, bribery, and corruption:

The Customer ensures proper health and safety measures are in place for the Service Provider's staff.

All Parties declare they have not engaged in bribery or corruption and will prevent subcontractors from doing so.

Parties may subcontract but must ensure compliance with all contract terms.

The Company ensures its products are free from Conflict Minerals as defined by applicable regulations.

None

What is the term for a process that limits further competition within a framework agreement?

Direct call-off

Blanket order

Closed system

Standing offer

None

Which two matters are NOT governed by the CISG?

Contract validity

Seller's liability for personal injury or death

Remedies for breach of contracts

Transfer of risks

Liability to pay damages

What factor consistently qualifies as valid consideration?

A promise made to a third party

A promise to exceed an existing obligation

Implied consideration

Past consideration

None

10.

A manufacturing department urgently needs a specialized component. The procurement manager must act swiftly. Which measures should be prioritized? Select TWO:

Submit a comprehensive business justification

Create a new specification

Analyze contract performance

Foster relationships with potential suppliers

Obtain approval from high-level authority

11.

Which pricing strategy motivates suppliers to minimize costs?

Penetration pricing

Cost-plus pricing

Target costing

Skimming pricing

None

12.

What defines the key characteristic of liquidated damage clauses?

Liquidated damages act as a penalty

The damages must be disproportionately higher than actual losses

The damage amount is pre-agreed

The clauses are non-negotiable

None

13.

Which attributes describe standard terms and conditions? Select TWO:

Generally non-negotiable

Include confidentiality terms

Tailored to individual purchase orders

Always align with implied terms

Intended for repetitive transactions

14.

How should a procurement manager measure user satisfaction and motivations?

Numercial measure

Binary measure

Quantitative measure

Qualitative assessment

None

15.

What components are essential in supplier performance management frameworks? Select THREE:

Key performance indicators (KPIs)

Defined consequences

Performance targets

Indemnity terms

Supporting justifications

Force majeure clauses

16.

When can implied terms override express terms in a contract?

When implied terms arise from trade customs

Under no circumstances, express terms always prevail

When law grants overriding authority to implied terms

When the contract is silent on specific matters

None

17.

What regulation limits trade restrictions among WTO member states?

GATT

CISG

TRIPS

NAFTA

None

18.

Which of these justifies a supplier raising unit prices in a price-adjustment clause?

Increased economies of scale

Improved customer satisfaction

Rising fuel costs

Increased share prices

None

19.

Brian's supplier delivered faulty goods. Which document determines if they meet the intended purpose?

Specification

CSR policies

Pre-qualification questionnaire

Code of conduct

None

20.

What terms are assumed by courts to be part of a contract, even if not explicitly stated?

Agreement

Implied terms

Express terms

Standard terms and conditions

None

21.

A senior buyer wants to incorporate social and environmental considerations into a specification. What document outlines an organization’s objectives in these areas?

Economy of scale

CSR policies

Economic performance goals

Procurement technology systems

None

22.

In a gainshare agreement, which factors determine the final fee? Select TWO:

Accrued expenses

Actual cost

Goodwill from purchase

Final price

Supplier share

23.

What contract model is developed by the Institute of Civil Engineers?

FIDIC

lMechE/IET

NEC

JCT

None

24.

What pricing arrangement best suits short-term window cleaning services?

Fixed pricing

Cost-plus arrangement

Standard rate schedules

Variable pricing

None

25.

What standard guides the preparation and formatting of specifications?

BS 7373-1:2001

BS EN 60601-1:2015

BS 5975:2019

BS 5864:2019

None

26.

Which of the following Key Performance Indicators (KPIs) are considered qualitative?

1. Supplier openness and collaboration
2. Supplier responsiveness
3. Customer satisfaction ratings
4. Cost control
5. On-Time In-Full (OTIF) deliveries

1 and 4 only

2 and 3 only

2 and 5 only

1 and 3 only

None

27.

What are the benefits of using a request for quotation? Select TWO:

Encourages creative supplier solutions

Enables short turnaround times

Lower administration costs

Assesses both price and quality

Eliminates the need for specifications

28.

What conditions must be met for an offer revocation to be valid?

1. The offeree has not yet received the offer
2. The revocation must be communicated to the offeree
3. The revocation must be sent via email
4. The offeree has not accepted the offer

1 and 3 only

2 and 4 only

2 and 3 only

1 and 4 only

None

29.

When should liquidated damages clauses be included in a contract?

When the loss is too uncertain or hard to quantify

When the breaching party seeks to limit liability

To punish the breaching party

After court approval of the damages amount

None

30.

Actions resulting from KPI scores must be: Select TWO:

Documented

Mutually agreed

Intentionally omitted

Unilaterally imposed by the buyer

Terminated

31.

Which provisions are potential implied terms in contracts? Select TWO:

Statutory requirements

Contract clause

Legal precedents

Contract appendices

Definitions and interpretations

Please proceed to view your grade. Fingers crossed🤗

Time's up

Time is Up!

CIPS – Commercial Contracting (L4M3) paper 5

Before you begin ✍️

You are about to practice the questions set for
CIPS - Commercial Contracting (L4M3) paper 5.
Please put away any distractions and focus all your efforts on passing.
⏱️Time limit: 1 hour 30 minutes

At the end of your examination practice, you will
📝 View your grade
✅ View the correct answers

NOTE: The answers provided haven't been verified by an official CIPS-affiliated entity, therefore consider discussing your concerns with the instructor or fellow students for clarification.

To begin your exam practice,
wait a few seconds for the start button to appear,
then tap the START button.
"We're rooting for you all the way!" All the best. 😃

Please proceed to view your grade. Fingers crossed🤗

Leave a Reply Cancel reply

Before you begin ✍️ You are about to practice the questions set for CIPS - Commercial Contracting (L4M3) paper 5. Please put away any distractions and focus all your efforts on passing. ⏱️Time limit: 1 hour 30 minutes

At the end of your examination practice, you will 📝 View your grade ✅ View the correct answers

NOTE: The answers provided haven't been verified by an official CIPS-affiliated entity, therefore consider discussing your concerns with the instructor or fellow students for clarification.

To begin your exam practice, wait a few seconds for the start button to appear, then tap the START button. "We're rooting for you all the way!" All the best. 😃

Please proceed to view your grade. Fingers crossed🤗

Leave a Reply Cancel reply

Before you begin ✍️

You are about to practice the questions set for
CIPS - Commercial Contracting (L4M3) paper 5.
Please put away any distractions and focus all your efforts on passing.
⏱️Time limit: 1 hour 30 minutes

At the end of your examination practice, you will
📝 View your grade
✅ View the correct answers

To begin your exam practice,
wait a few seconds for the start button to appear,
then tap the START button.
"We're rooting for you all the way!" All the best. 😃