CIPS L4M3 Exam - Topic 2 Question 63 Discussion

Actual exam question for CIPS's L4M3 exam

Question #: 63
Topic #: 2

[All L4M3 Questions]

A construction company is undertaking a housing development project. They need lots of bricks and other building materials, but the construction site doesn't have large area for storage of materials. Therefore, the company's suppliers must deliver the building materials with fixed quantity and at fixed time intervals. What type of contract is used between the construction company and its suppliers?

AFramework agreement

BSpot transaction

COne off contract

DCall off contract

Show Suggested Answer

Suggested Answer: D

In the scenario, the contract between the company and its suppliers is continuous rather than one-off. So it cannot be one-off contract or spot purchase. The quantity and time is well known and fixed, this type of contract is known as call-off contract or blanket order.

LO 1, AC 1.3

by Veronica at Aug 16, 2025, 12:43 PM

Limited Time Offer

25%

Off

Get Premium L4M3 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Aliza

2 months ago

One off contract doesn't fit the ongoing supply needs.

upvoted 0 times

...

Katie

2 months ago

I think it's a Framework agreement.

upvoted 0 times

...

Loren

3 months ago

Wait, are they really using a fixed schedule? Sounds risky!

upvoted 0 times

...

Herminia

3 months ago

Spot transaction seems too random for this.

upvoted 0 times

...

Kate

3 months ago

Definitely a Call off contract!

upvoted 0 times

...

Gerry

3 months ago

I feel like spot transactions are more for immediate needs, so I don't think that's right. Call off contract seems more appropriate here.

upvoted 0 times

...

Tammara

4 months ago

I'm a bit confused; I thought a one-off contract was for single deliveries, but this situation seems to need something more ongoing.

upvoted 0 times

...

German

4 months ago

I remember practicing a question about contracts, and I think a call off contract fits this scenario because of the fixed quantities and intervals.

upvoted 0 times

...

Jolene

4 months ago

I think the answer might be a framework agreement since it allows for ongoing deliveries, but I'm not entirely sure.

upvoted 0 times

...

Glenn

4 months ago

I'm a bit confused on the difference between a one-off contract and a call off contract. They both seem like they could work for this scenario, but I'm not sure which one is more accurate. I'll have to review those contract types again before answering.

upvoted 0 times

...

Dorothy

4 months ago

Okay, I think I've got this. The key details are the limited storage space and need for just-in-time delivery, so the suppliers can't do one-off spot transactions. It has to be some kind of ongoing contract, and a call off contract sounds like the best fit.

upvoted 0 times

...

Paulene

5 months ago

Hmm, I'm not sure about this one. The fixed quantity and time intervals make me think it could be a framework agreement, but I'm not totally confident. I'll have to think it through carefully.

upvoted 0 times

...

Altha

5 months ago

This sounds like a call off contract, where the construction company has an agreement with suppliers to deliver materials at fixed intervals. That seems to fit the description of the limited storage space and need for just-in-time delivery.

upvoted 0 times

...

Reita

5 months ago

I'm not sure, but I think A) Framework agreement could also work in this situation. It provides a structure for future orders.

upvoted 0 times

...

Leontine

6 months ago

I agree with Charlesetta. A call off contract allows the company to order materials as needed without having to store them on site.

upvoted 0 times

...

Chau

6 months ago

D) Call off contract, that's the correct answer. The company needs a flexible arrangement to manage the delivery of materials in small quantities at fixed intervals, which is what a call-off contract provides.

upvoted 0 times

...

Charlesetta

6 months ago

I think the answer is D) Call off contract.

upvoted 0 times

...