Title: Pass Guaranteed Quiz 2026 L4M3: CIPS Commercial Contracting Newest Verified Answ [Print This Page] Author: willsha669 Time: 17 hour before Title: Pass Guaranteed Quiz 2026 L4M3: CIPS Commercial Contracting Newest Verified Answ P.S. Free & New L4M3 dumps are available on Google Drive shared by DumpsFree: https://drive.google.com/open?id=12QDEX2Y5w--giDXrPA52w8iKdJwttgmq
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CIPS (Chartered Institute of Procurement and Supply) L4M3 exam is one of the most important exams for professionals who want to enhance their skills in commercial contracting. L4M3 exam is designed for individuals who are interested in gaining knowledge and skills in contract management, drafting, and negotiation. It is a Level 4 exam that is equivalent to a foundation degree and is part of the CIPS diploma in procurement and supply. L4M3 Exam is recognized globally and is highly valued by employers in the procurement and supply chain field.
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Maximum Score 1
Buyer O has placed an order for the supply and installation of six new servers for a total amount of £600,000 from Supplier A. Which of the following could potentially be treated as examples of a liquidated damages clause within the contract for the supply of the servers?
* If the supplier delivers any of the servers late, £1,000 per server will be deducted from the order per day
* This contract is subject to delay remedies of £X - the amount to be agreed by both parties during delivery
* The sum for breach of the completion date for the order is £40,000 per day up to a maximum of 50% of the contract price
* If the performance of any of the servers degrades within five years, a full refund of £600,000 will be provided
A. 1 and 2 only
B. 2 and 4 only
C. 1 and 3 only
D. 3 and 4 only
Answer: C
Explanation:
Liquidated damages are pre-agreed fixed sums payable for specific breaches, such as late delivery.
Clauses 1 and 3 meet this definition.
Clause 2 is uncertain ("to be agreed") and unenforceable; clause 4 is a warranty, not LDs.
Reference: CIPS L4M3 Commercial Contracting - "Remedies for breach - liquidated damages."
NEW QUESTION # 155
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?
A. No, because the work had been carried out which could not be returned
B. Yes, because both parties agreed with rescission of their contract
C. No, because the contract does not include any provision on rescission
D. Yes, because Cleveland needs to seek rescission first before claiming for damages
Answer: A
Explanation:
Hank's pre-contractual assurances may amount to misrepresentation. Remedies for misrepresentation could be rescission of contract or damages. Rescission will be impossible in the following instance:
- Where the innocent party has affirmed the contract; that is, acted in a way confirming that they wish it to continue
- Where the claim has not been brought within a reasonable time (this is a point of general law)
- Where restitution (returning to the pre-contractual position) is impossible (e.g. because the goods have been consumed or have deteriorated)
- Where there has been intervention of innocent third-party (e.g., if the goods have been sold on) In this case, the subject of contract is designing, building and managing the new CRM system which is impossible to be restituted. Therefore, the contract cannot be rescinded.
Reference: CIPS study guide page 53-55
LO 1, AC 1.2
NEW QUESTION # 156
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. Final price
C. Actual cost
D. Purchaser goodwill
E. Accrual expense
Answer: A,C
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 # 157
Consequences and actions that arise from certain KPI scores must be...? Select TWO that apply.
A. Documented
B. Terminated
C. Unilaterally imposed by the purchaser
D. Mutually agreed
E. Deliberately omitted
Answer: A,D
Explanation:
Supplier performance management and monitoring is a fundamental part of contract management. It starts with setting KPIs, targets and consequences or actions that arise from KPI scores. The measures, objectives and targets used in the monitoring of the supplier's performance must reflect those that were agreed when the contract was let. That is why it is important to specify a commitment to continuous improvement at the outset.
It would be unfair to the supplier to suddenly introduce a range of measures after the contract had begun - however if such an introduction mid-term through the contract is unavoidable then it should be negotiated and agreed in a professional manner and not merely imposed on the supplier.
In conclusion, the details of how KPIs will be monitored and the actions or consequences resulting from scores achieved must be documented and agreed between the parties. This details may be embedded in the specification or the main body of the contract or it may be set out in a SLA.
Reference:
- Performance Monitoring of Suppliers - CIPS Knowledge summary
- CIPS study guide page 101-109
LO 2, AC 2.2
NEW QUESTION # 158
Which of the following is the most suitable model contract for car lift manufacturing?
A. CIPS
B. FIDIC
C. ITC
D. IMechE/IET
Answer: D
Explanation:
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. Car lifts are mechanical products, so IMechE/IET is the most suitable model contract for this type of product.
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 Chartered Institute of Procurement and Supply (CIPS) has some model contracts for IT functions including: supply and installation of computer equipment, support and maintenance of bespoke software, servicing of computer equipment,...
The International Trade Centre (ITC) produces contracts specifically designed for small companies doing international business, covering the sale of goods, distribution, services and joint ventures.
Reference: CIPS study guide page 142
LO 3, AC 3.1
NEW QUESTION # 159
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