CIPS Exam L4M3 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, 01:43 PM

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Leontine

15 days ago

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

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Chau

16 days 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.

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Charlesetta

17 days ago

I think the answer is D) Call off contract.

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