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CIPS L4M3 Exam - Topic 1 Question 78 Discussion

What are disadvantages of a buyer contracting on the supplier's terms? Select TWO that apply.
A) Materials will not be changed without the buyer's consent and C) Title to goods may remain with the supplier until payment is received and D) Goods received late will incur penalties for the supplier and E) Prices may increase without notification to the buyer
B) The buyer would not be subject to any indemnity clause obligations

CIPS L4M3 Exam - Topic 1 Question 78 Discussion

Actual exam question for CIPS's L4M3 exam
Question #: 78
Topic #: 1
[All L4M3 Questions]

What are disadvantages of a buyer contracting on the supplier's terms? Select TWO that apply.

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Suggested Answer: A, C, D, E

Contracting on the supplier's terms can pose risks for the buyer. Common disadvantages include retention of title clauses (C), where the supplier retains ownership of goods until full payment is made. Also, suppliers may include clauses allowing them to raise prices without notification (E). These terms shift risk to the buyer and reduce predictability and control.


CIPS L4M3 Commercial Contracting Study Guide, Chapter 3, Section 3.1.3 -- Standard forms of contract and negotiating key terms.

by Cora at Aug 12, 2026, 09:22 AM

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Frederic
4 days ago
I remember something about indemnity clauses, but I can't recall if they apply here. I need to double-check that part.
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Heidy
9 days ago
I'm not entirely sure, but I feel like prices may increase without notification to the buyer could be a disadvantage too. We discussed something similar in class.
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Yasuko
15 days ago
I think one disadvantage could be that title to goods may remain with the supplier until payment is received. That sounds familiar from our last practice session.
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