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L4M3 Commercial Contracting is now Stable and With Pass Result | Test Your Knowledge for Free

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L4M3 Practice Questions

Commercial Contracting

Last Update 3 days ago
Total Questions : 233

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Our free CIPS Level 4 Diploma in Procurement and Supply practice questions crafted to reflect the domains and difficulty of the actual exam. The detailed rationales explain the 'why' behind each answer, reinforcing key concepts about L4M3. Use this test to pinpoint which areas you need to focus your study on.

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Question # 11

Which of the following are benefits of using model form contracts? Select TWO that apply.

Liability is greatly reduced for suppliers

Suppliers can renegotiate terms more easily

They improve contract consistency

They are widely accepted in certain industries

Options:

A.  

1 and 3

B.  

1 and 2

C.  

2 and 4

D.  

3 and 4

Discussion 0
Question # 12

Which of the following are always considered as minimum preconditions for a contract? Select TWO that apply:

Options:

A.  

Specification

B.  

Promise

C.  

Omission

D.  

Consideration

E.  

Intention to be bound

Discussion 0
Question # 13

One of the important features in the formation of a contract is the need to have a 'consensus ad idem' between the contracting parties. 'Consensus ad idem' can be translated as meaning:

Options:

A.  

A promise to commit the contract to written form

B.  

A meeting of minds where all parties have the same understanding of the terms

C.  

Let the buyer beware before agreeing the contract

D.  

An agreement on the main item of the contract

Discussion 0
Question # 14

Various terms are used to qualify a party's obligations under contract. Which of the following gives absolute obligation?

Options:

A.  

Reasonable endeavours

B.  

Shall

C.  

Best endeavours

D.  

Should

Discussion 0
Question # 15

XYZ Ltd and Engineer Corp signed a long-term supply contract in which both parties had agreed on performance targets. Recently, due to increased customer demands, XYZ Ltd realises that they should make changes to the contract with Engineer Corp with regards to performance management. These changes are approved and signed by both the buyer and seller. The changes to the contract are known as...?

Options:

A.  

An amendment to the prime contract

B.  

A stand-alone subcontract to the prime contract

C.  

An appendix to the prime contract

D.  

A separate counter-offer to the supplier

Discussion 0
Question # 16

Maximum Score 1

Drafting a specification is important because these documents become embedded within the contract and therefore, are legally binding. Is this statement true?

Options:

A.  

No, because legally binding contracts only contain terms and conditions

B.  

No, as the specification is separate to the contract and has no legal standing

C.  

Yes, care needs to be taken because the specification should be part of the contract

D.  

Yes, because all specifications must be approved by the organisation's board according to legislation

Discussion 0
Question # 17

When should liquidated damages clauses be written into a contract?

Options:

A.  

When the innocent party wants to punish the breaching party.

B.  

When the breaching party wants to exclude all its liabilities

C.  

When the court approves the damages amount before the contract is executed.

D.  

When the loss to the innocent party will be either too uncertain or too difficult to calculate.

Discussion 0
Question # 18

Which of the following are examples of express terms in a contract? Select TWO that apply.

Options:

A.  

A retention of title term

B.  

Term inserted by the Sale of Goods Act 1979

C.  

A liquidated damages term

D.  

Term inserted through business efficacy test

E.  

Term inserted through the custom of the trade

Discussion 0
Question # 19

A procurement officer decides to approach the supply market regarding a procurement activity that will specify the use of technology that is very new to the market. The procurement officer is taking this step before the formal tender process is started. Is this approach permitted?

Options:

A.  

Yes, but only as part of early market engagement and with no commitment of contracts

B.  

No, it is time consuming and can delay tenders unnecessarily

C.  

Yes, it is a good way to understand who will have the highest prices and start negotiations

D.  

No, all suppliers must wait for the invitation to Tender (ITT) to be released

Discussion 0
Question # 20

Maximum Score 1

The nature of the "Battle of the forms" is when both buyer and supplier are attempting to ...

Options:

A.  

Secure their own terms and conditions

B.  

Create a collaborative relationship

C.  

Create a performance specification

D.  

Form a joint contract

Discussion 0
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