[Dec-2022] L4M3 PDF Dumps Are Helpful To produce Your Dreams Correct QA’s [Q60-Q76]

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[Dec-2022] L4M3 PDF Dumps Are Helpful To produce Your Dreams Correct QA’s

New L4M3 exam Free Sample Questions to Practice

CIPS L4M3 Exam Syllabus Topics:

Topic	Details
Topic 1	Drafting specifications and developing marketdialogue with suppliers Understand the legal issues that relate to the formation of contracts
Topic 2	Cost plus and cost reimbursable pricing arrangements Invitations to treat or invitations to negotiate
Topic 3	Terms that apply to labour standards and ethical sourcing Including social and environmental criteria inspecifications
Topic 4	Appraise examples of key performance indicators (KPIs) in contractual agreements Analyse the legal issues that relate to the creation of commercial agreements with customers or suppliers
Topic 5	Recognise types of pricing arrangements incommercial agreements The battle of the forms and precedence of contract terms
Topic 6	Risks presented by contracting on suppliers terms or through oral contracts Analyse the content of specifications for procurements
Topic 7	Compare types of contractual agreements made between customers and suppliers Standardisation of requirements versus increasing the range of products
Topic 8	Defining contractual performance measures or key performance indicators (KPI) Understand the key clauses that are included informal contracts
Topic 9	Recognise examples of contractual terms typically incorporated into contracts that are created with external organisations Invitation to tender or request for quotation

QUESTION 60
Express terms in a contract are stated in which of the following? Select TWO that apply

Orality

Idea

Trade customs

Writing form

Statutes

QUESTION 61
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

QUESTION 62
Which of the following KPIs is qualitative?
1. Openness and co-operation of supplier
2. Responsiveness of supplier
3. Customer satisfactory ratings
4. Cost management
5. OTIF deliveries

2 and 5 only

1 and 3 only

2 and 3 only

1 and 4 only

QUESTION 63
Bandpro is a reseller of branded computer products to the private and public sector. The procurement team must purchase 500 items each day solely by multiple phone calls and emails to suppliers. Due to this practice, it takes a lot of time to track and collect relevant documents. Some important documents even get lost, which makes procurement audit more burdensome. Which of the following would increase the robustness of audit trails in procurement activities?

Every evidence must be recorded by paper

Adopt e-procurement

Spend less time on auditing procurement procedures

Rectify non-compliant activities

QUESTION 64
Which of the following will be included in a conformance specification?
1. Brand names
2. Description of the operating environments
3. Chemical formulae
4. Required safety level

1 and 2 only

1 and 3 only

1 and 4 only

2 and 3 only

QUESTION 65
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

QUESTION 66
Which of the following should be done by procurement professionals right after obtaining a pre-written specification for a critical item so that the added value will be the greatest?

Evaluate tender or quotation

Select the best supplier

Challenge the used specification

Issue invitation to tender or request for quotation

QUESTION 67
Which of the following statement is true about insurance?

An insurance policy can be mechanism of substance to back up indemnity

The supplier must always pay the insurance premium for goods-in-transit

An insurance policy transfers the legal liabilities from the insured to the insurer

Professional indemnity insurance provides the insured business with financial protection against the liabilities caused by or arising out of the products supplied

QUESTION 68
Which of the following should include in the service level agreement that is an appendix of a contract?
1. How often the service is measured
2. Minimum qualification of supplier staffs
3. Remedies to resolve dispute
4. On time service delivery

1, 3 and 4 only

1, 2 and 3 only

2, 3 and 4 only

1, 2 and 4 only

QUESTION 69
The cost in cost reimbursable contract is…?

Actual cost

Variable cost

Fixed cost

Profit

QUESTION 70
Consequences and actions that arise from certain KPI scores must be…? Select TWO that apply.

Mutually agreed

Deliberately omitted

Documented

Unilaterally imposed by the purchaser

Terminated

QUESTION 71
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

QUESTION 72
Is the government only source of industrial standards within a country?

No, the government can only adopt standards regarding security and defence

Yes, while ISO make standards for international trade, the government standardises other facets of their country

No, an organisation can also generate its own internal standards

Yes, the standards must be made by legislative branch of the country

QUESTION 73
XYZ Ltd is negotiating a long-term supply contract of important parts with a supplier. Dave, procurement manager teams up with Alla, legal manager to construct a service level agreement. Dave is concerned that poor performance of supplier may cause damages to the operations of the organisation. Which of the following can be used in conjunction with SLA to compensate the buying organisation in case of supplier’s poor performance?
1. Warranties
2. Force majeure clauses
3. Penalty clauses
4. Service credits

1 and 3 only

3 and 4 only

1 and 2 only

4 and 2 only

QUESTION 74
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

QUESTION 75
Which of the following are features of performance specification?
1. Method of achieving the buyer’s desired result
2. What needs to be achieved when using the product
3. Purposes of the product
4. Technical and physical characteristics of the product

2 and 4 only

1 and 2 only

1 and 4 only

2 and 3 only

QUESTION 76
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…?

An amendment to the prime contract

A stand-alone subcontract to the prime contract

An appendix to the prime contract

A separate counter-offer to the supplier