CIPS – Commercial Contracting (L4M3) paper 1

L4M3 paper 1 – Free

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31
Questions
60
Minutes

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Question 1 of 31

1 Which UK legislation promotes public sector contracting with an emphasis on social and environmental goals?
2 When a service level agreement (SLA) is part of a contract, which area does it primarily affect?
3 Which term describes principles that help courts interpret and uphold a contract's precise language?
4 A construction firm facing space limitations opts for scheduled deliveries of building materials, with fixed quantities and intervals. What type of contract does it use with its suppliers?
5 Does the government serve as the sole provider of industrial standards?
6 Which of the following actions will always result in automatic termination of an offer?

1. Negotiation
2. Rejection
3. Failure conditionality
4. Non-disclosure

7 Which of the following documents are likely to be legally binding? Select TWO.
8 In a contract that specifies a 3-day lead time, but the buyer requests next-day delivery over the phone, and the supplier delivers in 3 days, can the buyer withhold payment for late delivery?
9 How can conflicts between orally agreed terms and a written contract be avoided before finalizing it?
10 What is it called when a third party’s claim results in one party compensating the other for damages?
11 Which standard construction contract is endorsed by the World Bank?
12 Gotham Ltd. is working on a long-term contract with a supplier. To prevent underperformance, Fabian (the procurement manager) and Emma (the legal manager) draft a service level agreement (SLA) with penalties or service credits for poor performance. Which mechanisms should be included in the SLA?

1. Warranties
2. Force majeure clauses
3. Penalty clauses
4. Service credits

13 What does the term quantum meruit mean?
14 Which characteristics define performance specifications?

1. Method to achieve the desired result
2. Desired outcome of using the product
3. Purpose of the product
4. Technical and physical properties of the product

15 ABC Insurance requires a new CRM system due to an increase in customer demand. Tech Ltd is chosen to supply the system, but Thomas, the technical director at Tech, made unrealistic assurances about project deadlines. ABC later seeks contract rescission. Is ABC’s request valid?
16 What tool helps clarify complex details that could be overly verbose in the primary document?
17 What should the purchaser have to ensure the supplier follows the labor standards outlined in the contract?
18 Nasa intends to contract with Oxford for software and IT services, using IBM products. To avoid potential risks and legal action, which clause should be incorporated into the primary contract to hold IBM accountable
19 Which of the following elements are likely in an outcome-based specification?

1. Dimension
2. Performance requirement
3. Input material
4. Product function

20 Which rewards can be included in contract terms to encourage better performance? Select THREE.
21 Which components are typically included in a conformance specification?

1. Brand names
2.Operating environment description
3.Chemical composition
4. Required safety level

22 What pricing method involves adding a markup to the base cost to determine the final price?
23 Which term refers to the relationship between profit and costs?
24 What do you call an item purchased once for a specific purpose or use?
25 In a sales contract, a clause requiring the seller to "protect, reimburse, and absolve" the buyer from damages is an example of:
26 A machinery supplier sells an industrial generator to a construction firm. The firm agrees to pay in monthly installments over three years. The contract states that ownership will only transfer once the final installment is paid. After six months, the generator is delivered to the site and is accidentally destroyed in a flood. Which party legally owns the generator at the time of the accident?
27 When considering entering a new market, which THREE external factors impact the difference between cost and price?
28 Which area does the ISO 14001 standard govern?
29 Under common law, which of the following contractual instruments is valid without needing consideration?
30 What benefits can the tender process offer? Select TWO.
31 What are TWO reasons a purchaser may wish to include a subcontracting clause in the main contract?

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