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CIPS L3M1 Exam - Topic 2 Question 37 Discussion

Actual exam question for CIPS's L3M1 exam
Question #: 37
Topic #: 2
[All L3M1 Questions]

A contract clause which entitles the buyer to hold back 5% of the final price for six months to en-sure everything is in order is known as a --------- clause:

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Suggested Answer: A

'Retention' - from the word 'retain', meaning to 'keep in place', 'hold back', 'keep possession of' something (Concise Oxford Dictionary, fifth edition) . In this case, 5% of the contract price.


by Ammie at Jul 12, 2025, 10:01 AM

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Johanna
2 months ago
Yep, Retention is the right term here!
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Josefa
2 months ago
Totally agree, it's all about holding back funds!
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Ernie
3 months ago
I thought it was called a Retainer clause?
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Cherry
3 months ago
Wait, is this really a standard practice? Sounds odd.
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Annelle
3 months ago
It's definitely a Retention clause.
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Nida
3 months ago
I thought "Retainer" was something else, maybe related to legal fees? This is tricky!
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Dottie
4 months ago
I practiced a similar question last week, and I believe "Retention" was the answer then as well.
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Ashley
4 months ago
I'm not entirely sure, but "Redemption" sounds familiar too. I might be mixing it up with something else though.
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Bulah
4 months ago
I think the term we're looking for is "Retention" clause. I remember studying that in relation to construction contracts.
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Lauran
4 months ago
Retention clause, got it. This is a common contract term that allows the buyer to hold back a portion of the payment to verify the work is completed properly. Easy peasy.
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Jillian
4 months ago
Okay, I remember learning about retention clauses in one of my business law classes. The buyer holding back a percentage of the final price to ensure everything is in order sounds exactly like that. I'll go with A.
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Tijuana
5 months ago
Hmm, I'm not totally sure about this one. The question is asking about a specific contract clause, and the options don't seem super clear to me. I might need to think this through a bit more.
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Johnetta
5 months ago
This one seems pretty straightforward - the description matches the definition of a retention clause, so I'm going to go with A.
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Bok
6 months ago
Retention clause, easy peasy. It's like a 'trust but verify' kind of deal. Gotta keep those contractors on their toes!
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Earlean
5 months ago
I agree, it's a good way to make sure they deliver quality work.
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Arlen
6 months ago
Retention clause, for sure. Wouldn't want to get stuck with a shoddy job, right? Although, maybe the contractor should get a 'Retention Bonus' for good work. Just sayin'.
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Bok
5 months ago
I agree, a retention clause is important to ensure quality work.
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Denny
7 months ago
Hmm, Retention? Sounds like a good way to keep the contractor honest. I'm all for it!
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Olene
7 months ago
Retention, without a doubt. Keeps the contractor on their toes and ensures quality work.
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Armanda
7 months ago
I'm not sure, but I'll go with A) Retention as well since it seems to be the most logical choice.
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Donette
7 months ago
I agree with Buddy, A) Retention seems like the correct answer based on the description of the clause.
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Buddy
7 months ago
I think it's A) Retention because it makes sense to hold back a portion of the final price to ensure everything is in order.
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Darci
7 months ago
Definitely a Retention clause! Gotta make sure the job's done right before handing over the full payment.
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Makeda
7 months ago
Yes, it's a smart way to ensure that the seller fulfills all obligations before receiving full payment.
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James
7 months ago
I agree, a Retention clause is essential for protecting the buyer's interests.
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Eun
8 months ago
A) Retention
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