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The CIPS L4M3 exam covers a wide range of topics related to commercial contracting including the different types of contracts, their formation and termination, contract performance, and legal and regulatory frameworks. It also assesses candidates' ability to manage the contractual relationship with suppliers, and their ability to draft and negotiate effective contracts. Passing the CIPS Commercial Contracting Certification Exam is an indication of the candidate's capability to deliver successful outcomes through effective contract management. CIPS Commercial Contracting certification is a valuable addition to a procurement and supply management professional's qualifications and enhances their career prospects.
CIPS L4M3 (CIPS Commercial Contracting) certification exam is designed to test the knowledge, skills, and expertise of professionals in the field of commercial contracting. CIPS Commercial Contracting certification is offered by the Chartered Institute of Procurement and Supply (CIPS), which is a globally recognized professional body that provides training, education, and certification in procurement and supply chain management.
L4M3 Exam Exam Syllabus & Newest L4M3 Valid Test Format Pass SuccessTestKingIT offers the best CIPS L4M3 prep material to attempt the test successfully in one go. Every year hundreds of applicants fulfill their dream of having the L4M3 certification by just relying on real CIPS L4M3 Dumps. TestKingIT aids you on your CIPS L4M3 Certification preparation journey with the best study material in CIPS L4M3 PDF, desktop practice exam software, and a web-based CIPS L4M3 practice test. CIPS Commercial Contracting Sample Questions (Q91-Q96):NEW QUESTION # 91
CMS Corp goes into a gainshare agreement with the contractor, EIP Ltd. Both parties agree that the final fee will be calculated on target cost - target fee basis. Which of the following will affect the final fee payable in this gainshare agreement? Select TWO that apply:
A. Supplier share
B. Accrual expense
C. Purchaser goodwill
D. Final price
E. Actual cost
Answer: A,E
Explanation:
An incentive contract is a sub-segment of a fixed-price or cost-reimbursement contract when there are specific cost or time commitments that are desired for a project. The standard incentive contract will allow for a fixed price to be paid for work to be completed by a specific deadline and at a specific cost.
There are two major types of incentive contracts: Cost-plus-incentive fee and Fixed-price incentive (firm target) contracts. Both types have the same formula for calculating final fee and final price.
The target fee is the amount that will be paid if the actual costs (which can be proven) match thetarget costs The actual fee will be adjusted in proportion to the difference between the target cost and the actual cost. The usual calculation is:
Target fee + ((target cost - actual cost) x Supplier share) = final fee The final price then becomes:
Actual cost + final fee = final price
Reference: CIPS study guide page 185
LO 3, AC 3.3
NEW QUESTION # 92
When a supplier signs an insurance policy with an insurance company, which of the following is transferred to insurance company?
A. Right
B. Legal responsibility
C. Risk
D. Contractual obligation
Answer: C
Explanation:
An insurance policy transfers a specific set of risks such as the fire and flood risk for a particular asset.
The legal liability does not transfer to the insurance company (known as insurer).
Reference:
LO 3, AC 3.2
NEW QUESTION # 93
SFO procurement manager sent a request for quotation to Vogon International in which he determined the contract terms and specification. In SFO's standard terms and conditions, it is stated that 'Goods shall be delivered and Services performed by the applicable Delivery Date. Supplier must notify Buyer 3 days prior to the Delivery Date if Supplier is likely to be unable to meet a Delivery Date.' Vogon replied with a quotation without any amendment to SFO's terms & conditions. The SFO procurement manager found the prices were reasonable and submitted to senior management. Senior management team accepted that quotation and sent a notification to Vogon. On the Delivery Date, Vogon said they had no capacity to supply the product as the quotation due to a workers' strike. Did Vogon breach any agreement with SFO?
A. Yes, because the contract was formed since Vogon had sent the quotation as an acceptance to SFO's offer
B. No, because the strike is a force majeur event, so Vogon did not breach any contract with SFO
C. Yes, because the contract had been formed between SFO and Vogon with the quotation as an offer and the notification as an acceptance
D. No, because Vogon had no intention to be bound by the quotation, therefore, it didn't constitute a contract
Answer: C
Explanation:
SFO issued an RFQ with defined terms and condition and detailed specification. This RFQ can be considered as an invitation to treat. Vogon's quotation is an answer to the purchaser's RFQ and is an offer to SFO. The contract come to life at the time Vogon received the notification from SFO senior management.
The strike may be a force majeur event, depending on the contract particular clauses and jurisdiction. In common law countries, force majeur is applicable as an exclusion of liability only if the contract allows it. In many civil law countries, force majeur is an implied term. But in every jurisdiction, force majeur is only a reason for excluding liability for non-performance of a contract. In other words, the non-performance party is not liable for any breach if force majeur event occurs but the event does not exclude the breach.
LO 1, AC 1.2
NEW QUESTION # 94
Which of the following is the set of principles that enables courts to determine exactly what the written contract says and what that must mean, then the court will uphold that?
A. Unfair Contract Act 1977
B. Rules of interpretation
C. Rules of contract formation
D. Order of precedence
Answer: B
Explanation:
Courts may be called upon to interpret a statute due to disputes over the meaning of a word or phrase contained within a statute. These disputes may arise through a variety of reasons. It has long been held that words are an imperfect means of communication. Omissions may have occurred at the drafting stage, word or phraseology ambiguity, etymological change through time, oversight on specific points, or a failure to adapt legislation to new developments. This may result in the judiciary providing a role in statutory interpretation. Statutory interpretation in its broadest sense is the process of determining the true meaning of a written document. In UK, the Interpretation Act 1978 provides limited scope to assist judges with statutory interpretation in that it only provides standard definitions to common provisions such as a rebuttable presumption that terminology in the masculine gender also include the feminine, and that the singular includes plural.
An order of precedence clause sets out the order in which the contract documents take precedence in the event of an inconsistency.
The Unfair Contract Terms Act 1977 (c 50) is an Act of Parliament of the United Kingdom which regulates contracts by restricting the operation and legality of some contract terms. It extends to nearly all forms of contract and one of its most important functions is limiting the applicability of disclaimers of liability. The terms extend to both actual contract terms and notices that are seen to constitute a contractual obligation.
Reference:
- Rules of Statutory Interpretation
- CIPS study guide page 43-46
LO 1, AC 1.2
NEW QUESTION # 95
Which of the following are true statements about RFQ process? Select TWO that apply.
A. Buying organisation should only send RFQ to pre-qualified suppliers
B. RFQ process requires the suppliers to submit their technical proposals
C. Price is often the only variable in the RFQ and quotations
D. RFQ process creates heavier administrative burdens than tendering process
E. RFQ process is not suitable for low value purchase
Answer: A,C
Explanation:
Request for quotations is often used when the only variable is price and the purchase value is under a financial threshold. This process is less formal than ITT. RFQ should be used in the following circumstances:
- Low-value, low-risk purchases
- When the specifications are sufficiently defined or the product/service is standardised
- Where the suppliers are pre-qualified
- Where there is a framework agreement which specifies the contract terms and conditions.
Reference:
LO 1, AC 1.1
NEW QUESTION # 96
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