Sample Questions of L4M3 Dumps With 100% Exam Passing Guarantee [Q50-Q74]

NEW QUESTION 50
A procurement professional is preparing a sale & purchase contract of a machinery. Which of the following clauses should be added to the contract? Select TWO that apply

Supplier selection mechanism

Insurance requirements

Period of hire

Ratio decidendi

Guarantees

NEW QUESTION 51
Carillion Ltd is a major construction contractor in the UK. The company commits to continuous improvement and sets out a performance management program that is integrated across the organisational, individual, and supplier levels. To ensure that the suppliers acknowledge the program, every time negotiating the contract terms with suppliers, the procurement team of Carillion appends a performance management framework to the draft document as a schedule. Is the action of procurement team appropriate?

No, because the framework will increase the complexity of the contract

No, because the performance management should be solely developed by suppliers

Yes, because the framework should have legal standing as a part of contract

Yes, because Carillion wants to implement early supplier involvement

NEW QUESTION 52
In a sale contract, a clause requires the seller to “defend, reimburse, and hold harmless” the buyer and its personnel from and against any and all damages arising in connection with some specific circumstances. This clause is an example of…?

Insurance

Liquidated damages

Indemnity

Force Majeure

NEW QUESTION 53
Cleveland Insurance (Cleveland) offers a range of insurance services. The main software used in the call centre is a customer relationship management (CRM) system. Cleveland perceived an urgent need to replace the existing CRM system to deal with the increasing number of customers and services.
Urgent Digital Ltd (Digital) is one of the bidders of Cleveland’s ITT for designing, building and managing the new CRM system. Its bid team is led by Hank Irvine, its technical director. Hank realises that winning the Cleveland contract (valued at approximately £50M) will enhance his career. During discussions with Cleveland, Hank offers certain assurances regarding timescales for the project. He has not carried out any investigations into the viability of the timescales. Hank has little idea whether the timescales can be met.
Cleveland decides that Digital’s bid meets with its requirements, especially given the assurances in timescale offered by Hank, and decides to proceed with it, subject to a formal contract. Eventually, a formal contract is signed by both parties. The initial assurances given by Hank about the timing of the project are never going to be achieved and are at best grossly exaggerated.
Cleveland brought the case to the court and sought rescission of contract with Digital. Is Cleveland’s claim appropriate in this case?

Yes, because Cleveland needs to seek rescission first before claiming for damages

Yes, because both parties agreed with rescission of their contract

No, because the work had been carried out which could not be returned

No, because the contract does not include any provision on rescission

NEW QUESTION 54
GPP, the employer, and Prosolia UK, the contractor, entered into five EPC contracts for the development of five different solar power generation plants in the United Kingdom. Four out of the five developments failed to be commissioned by the relevant due dates, with the delays ranging from 44 to 285 days.
Among other claims, GPP, acting through its two investment vehicles, claimed liquidated damages of £500 per day in all four contracts for Prosolia UK’s failure to achieve completion of the plants by the due date. The liquidated damages claimed amounted to £1,804,221 across the four delayed contracts.
Prosolia, alongside various other defences, raised the defence that the liquidated damages provision in each contract was a penalty, and therefore unenforceable against it. Is Prosolia contractually obliged to make the payment to the plaintiff?

No, the amount claimed is too excessive and it may put Prosolia into insolvency. The clause must be void

No, the clause must be treated as a penalty clause which is unenforceable in UK

Yes, the amount is a reward to the employer as they have supervised and monitored the projects

Yes, the clause is a genuine estimate of possible losses that GPP may have suffered and therefore, it is enforceable.

A liquidated damages clause specifies a predetermined amount of money that must be paid as damages for failure to perform under a contract. The amount of the liquidated damages is supposed to be the parties’ best estimate at the time they sign the contract of the damages that would be caused by a breach. If a breach occurs and the liquidated damages clause is enforceable, the parties do not calculate the actual damages (i.e., how much money a party actually lost as a result of the breach). Instead, the breaching party pays the predetermined sum provided by the liquidated damages provision.
To be enforceable, a liquidated damages clause should meet the following criteria.
Damages are difficult to estimate. A court will be more likely to enforce a liquidated damages provision if the damages that will be incurred as a result of a breach of the contract are difficult to estimate when the contract is entered into. In certain situations, injuries are easy to prove. For example, if a breach will result in the loss of sales, it is easy to determine the actual damages by calculating lost profits. Others are more difficult, like the harm caused by breach of a confidentiality agreement or theft of trade secrets. To be enforceable, the damages should be either uncertain or difficult to quantify at the time the contract is entered into.
The amount is reasonable and not a penalty. If the amount of the liquidated damages is grossly disproportionate to the actual harm incurred, a court will likely find it is a penalty or punishment and will not enforce the provision. When making this analysis, courts usually consider what was reasonable at the time the contract was entered into as opposed to when the breach occurred. There have been cases, however, where courts will decide the reasonableness of the damage estimate based on the actual harm at the time of the breach.
The scenario is excerpted and edited based on a real world case law. In that case, the court held that GPP was entitled to liquidated damages under all four of the EPC contracts, ruling that the provisions did not amount to unenforceable penalties in each of the contracts.
Reference:
– CIPS study guide page 158-159
– Liquidated damages in energy projects
– What Is a Liquidated Damages Provision?
LO 3, AC 3.2

NEW QUESTION 55
Cleveland Insurance (Cleveland) offers a range of insurance services. The main software used in the call centre is a customer relationship management (CRM) system. Cleveland perceived an urgent need to replace the existing CRM system to deal with the increasing number of customers and services.
Urgent Digital Ltd (Digital) is one of the bidders of Cleveland’s ITT. Its bid team is led by Hank Irvine, its technical director. Hank realises that winning the Cleveland contract (valued at approximately £50M) will enhance his career. During discussions with Cleveland, Hank offers certain assurances regarding timescales for the project. He has not carried out any investigations into the viability of the timescales. Hank has little idea whether the timescales can be met.
Cleveland decides that Digital’s bid meets with its requirements, especially given the assurances in timescale offered by Hank, and decides to proceed with it, subject to a formal contract. Eventually, a formal contract is signed by both parties. The initial assurances given by Hank about the timing of the project are never going to be achieved and are at best grossly exaggerated.
Hank’s pre-contractual assurance is most likely to be an example of which of the following?

Inaccuracy in communication

Threat

Initial impossibility

Fraudulent misrepresentation

NEW QUESTION 56
A service contract is going to be expired, which data source is good to create specifications for ITT?
1. Incumbent supplier
2. Maintenance services
3. Alternative supplier
4. User’s knowledge

1, 2 and 3

1, 3 and 4

1, 2 and 4

2, 3 and 4

NEW QUESTION 57
The pricing arrangement in which markup is added into cost base to calculate the final price is known as…?

Fixed Price approach

Market based approach

Price indices

Cost plus pricing

NEW QUESTION 58
Which of the following is the best definition of consideration in contract law?

Full statement about something to provide

The act of thinking carefully about one thing

One thing given in exchange

Formal discussion between people who are trying to reach an agreement

NEW QUESTION 59
Which of the following would be useful tools to incentivise supplier innovation over the duration of the contract?
1. Gainshare arrangement
2. Liquidated damages
3. Service credits
4. Fixed bonus payments

3 and 4 only

2 and 4 only

1 and 4 only

1 and 3 only

NEW QUESTION 60
A procurement manager is setting KPIs measurement for user satisfaction. He also wants to encourage users to share the reason why they feel the way they do. Which of the following types of KPI should the procurement manager apply?

Quantitative measure

Numerical measure

Binary measure

Qualitative assessment

NEW QUESTION 61
When a supplier signs an insurance policy with an insurance company, which of the following is transferred to insurance company?

Right

Risk

Legal responsibility

Contractual obligation

NEW QUESTION 62
Which of the following are implied terms in sales contracts? Select THREE that apply.

Payment method

Customer satisfaction

Transfer of ownership

Risk transfer

Fitness for purpose

Mode of transportation

NEW QUESTION 63
Which of the following are among five ‘pillars’ of information assurance?
1. Recovery plan
2. Availability
3. Non-repudiation
4. Governance

2 and 3 only

1 and 2 only

1 and 4 only

3 and 4 only

Information Assurance (IA)
Information Assurance (IA) is the practice of managing information-related risks and the steps involved to protect information systems such as computer and network systems. The IA transformation is a partnership that stretches across the Department of Defense (DoD), Office of National Intelligence, Committee on National Security Systems, National Institute of Science and Technology (NIST), and the Office of Management and Budget.
The US Government’s definition of information assurance is:
“measures that protect and defend information and information systems by ensuring their availability, integrity, authentication, confidentiality, and non-repudiation. These measures include providing for restoration of information systems by incorporating protection, detection, and reaction capabilities.” Information Assurance (IA) is essentially protecting information systems, and is often associated with the following five pillars:
– Integrity
– Availability
– Authentication
– Confidentiality
– Nonrepudiation
The following pillars can be applied in a variety of ways, depending on the sensitivity of the information, or information systems within your organization. Currently, these five pillars are used at the heart of the US Governments ability to conduct safe and secure operations in a global environment.
1. Integrity
Integrity involves assurance that all information systems are protected and not tampered with. IA aims to maintain integrity through means such as anti-virus software on all computer system, and ensuring all staff with access to know how to appropriately use their systems to minimize malware, or viruses entering information systems.
2. Availability
Availability simply means those who need access to information, are allowed to access it. Information should be available to only those who are aware of the risks associated with information systems.
3. Authentication
Authentication involves ensuring those who have access to information, are who they say they are. Ways of improving authentication involve methods such as two-factor authentication, strong passwords, bio-metrics and other devices. Authentication may also be used to not only identify users, but also other devices.
4. Confidentiality
IA involves the confidentiality of information, meaning only those with authorization may view certain data. This step is closely mirrored by the six data processing principles of the General Data Protection Regulation (GDPR), where by personal data must be processed in a secure manner “using appropriate technical and organizational measures” (“integrity and confidentiality”).
5. Nonrepudiation
The final pillar simply means someone with access to your organizations information system cannot deny having completed an action within the system, as there should be methods in place to prove that they did make said action.
Reference:
– What is Information Assurance (IA)?
– CIPS study guide page 99-100
LO 2, AC 2.1

NEW QUESTION 64
According to rule of contract formation, which of the following is a valid acceptance?

The person orally agrees to pay the offered price

The person states that she is able to pay the offered price

The person asks for a lower price

The person says that she will think about it overnight

NEW QUESTION 65
The model form contract invented by Institute of Civil Engineers is…?

NEC

IMechE/IET

FIDIC

JCT

NEC – New Engineering Contracts is a family of contracts invented by Institute of Civil Engineers. The contracts are suitable for procuring a diverse range of works, services and supply, ranging from major framework projects through to minor works and the purchase of supplies and goods.
FIDIC is a French language acronym for Federation Internationale Des Ingenieurs-Conseils, which means the international federation of consulting engineers. It was started in 1913 by the trio of France, Belgium and Switzerland. The United Kingdom joined the Federation in 1949. FIDIC is headquartered in Switzerland and now boasts of membership from over 60 different countries. FIDIC published its first contract, titled The Form of contract for works of Civil Engineering construction, in 1957. As the title indicated, this first contract was aimed at the Civil Engineering sector and it soon became known for the colour of its cover, and thus, The Red Book. It has become the tradition that FIDIC contracts are known in popular parlance by the colour of their cover. This first contract by FIDIC was undertaken jointly with the International federation of Building and Public works. FIDIC’s concerted effort at achieving broad consultation and acceptance of its contract forms has seen subsequent editions of its contracts being ratified by the International Federation of Asian and Western Pacific Contractors Association, Associated General Contractors of America and the Inter-American Federation of the Construction Industry, Multilateral Development Banks among others. Because of the broad support it enjoys, FIDIC contracts are the foremost contracts in international construction.
The Joint Contracts Tribunal, also known as the JCT, produces standard forms of contract for construction, guidance notes and other standard documentation for use in the construction industry in the United Kingdom. From its establishment in 1931, JCT has expanded the number of contributing organisations.
IMechE/IET: Institution of Mechanical Engineers/Institution of Engineering and Technology – two separate institutes that issue jointly agreed model forms covering the design, supply and installation of electrical, electronic and mechanical plant including special conditions for the ancillary development of software.
Reference:
LO 3, AC 3.1

NEW QUESTION 66
Which of the following is the best definition of “ultra vires”?

Beyond powers

In good faith

From one party

Let the buyer beware

NEW QUESTION 67
Which of the following is the procedure that makes no further competition under a framework agreement?

Closed system

Direct call-off

Standing offer

Blanket order

NEW QUESTION 68
Which of the following are examples of incentives which can be embedded in contract terms? Select THREE that apply

Gainshare

Indemnity

Contract extensions

Service credits

Liquidated damages

Faster payment

NEW QUESTION 69
Which of the following best defines an ‘express’ term in general contract arrangements?

It is a standard set of terms and conditions published by CIPS

It is not necessarily discussed by the parties, but nonetheless forms part of the contract

It is the term that is added to the contract by the law or based upon the facts of the case.

It is clearly agreed between the parties, and is virtually always written down in the contract

NEW QUESTION 70
Which of the following documents are likely to have legal standing? Select TWO that apply:

Quotation

Request for information

Tender

Requisition

Estimate

NEW QUESTION 71
In a contract, both buyer and supplier agreed the lead time is 3 days. The contract also requires that any variation must be made in writing. Then the buyer places an order by phone call and requests delivery the next day, but the supplier delivers on the third day since the order. Can buyer refuse to pay as supplier did not deliver per time?

No, the supplier delivers within a reasonable time

Yes, late delivery is a force majeure event

Yes, the supplier has breached the contract

No, supplier has shortened lead time to 1 day

NEW QUESTION 72
Which of the following are reasons why a purchaser wants to embed a subcontracting clause into the main contract? Select TWO that apply:

To induce the conflicts between the main contractor and subcontractors

To improve supply chain transparency

To reduce the main contract complexity

To keep main contractor liable

To condemn whole liabilities to subcontractors

NEW QUESTION 73
Which of the following are likely to be advantages of using request for quotation? Select TWO that apply:

Lower administration costs

Short turnaround times

No specification required

Helping the buying organisation assess both price and quality

Encouraging suppliers to submit creative solutions

NEW QUESTION 74
Which of the following contracts would be best suited to a ‘variable pricing’ arrangement?

A contract for window cleaning during the next three months

A contract for road building estimated to take five years to complete

A contract for the supply of 100 printing machines to be delivered next month

A contract for the supply of lubricating oil for immediate delivery

Exam Practice Questions

Sample Questions of L4M3 Dumps With 100% Exam Passing Guarantee [Q50-Q74]

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