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CIPS L4M3 Exam - Topic 8 Question 76 Discussion

EAC Facilities Management is planning for a new construction project in the suburban area. They decide to use NEC or FIDIC model form of contract for this project. Is this a right course of action?
A) Yes, these forms aim at balanced risk/reward allocation between the parties
B) No, the buyer will bear all the risks derived from the contract
C) Yes, using these forms will eliminate all the risks
D) No, the contractor won't understand the legal terminology in the contract forms

CIPS L4M3 Exam - Topic 8 Question 76 Discussion

Actual exam question for CIPS's L4M3 exam
Question #: 76
Topic #: 8
[All L4M3 Questions]

EAC Facilities Management is planning for a new construction project in the suburban area. They decide to use NEC or FIDIC model form of contract for this project. Is this a right course of action?

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Suggested Answer: A

Construction procurement is particularly complex and risky. Forming a contract in construction may take lots of time and energy of both client and contractor. Therefore, standardisation inconstruction contract would help the buying organisation to save their precious resources. Furthermore, the wording of these model form contracts is accurate as it has been agreed among the professionals within an industry.

One of the advantage of using model forms of contract is the balanced of risk and reward allocation between the contractor, consultant engineer and the client.


- An Introduction to FIDIC model contracts

- CIPS study guide page 139-147

LO 3, AC 3.1

by Floyd at Jun 30, 2026, 06:22 AM

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Martha
4 days ago
D) No way, contractors are used to legal jargon in contracts!
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Annmarie
9 days ago
C) Wait, can they really eliminate all risks? Sounds too good to be true.
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Jamie
14 days ago
B) No, the buyer will bear all the risks derived from the contract
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Shawnta
19 days ago
Totally agree, they promote collaboration!
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Trinidad
25 days ago
A) Yes, these forms aim at balanced risk/reward allocation between the parties
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Graham
30 days ago
Totally agree with A, it's all about fair risk sharing!
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Talia
1 month ago
D) No way, the contractor won't understand the legal terminology!
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Layla
1 month ago
C) Wait, using these forms will eliminate all the risks? Really?
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Flo
2 months ago
B) No, the buyer will bear all the risks derived from the contract
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Martin
2 months ago
A) Yes, these forms aim at balanced risk/reward allocation between the parties
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Frederica
2 months ago
I recall that these contracts can be complex, but I'm not convinced that D is true. Contractors usually get legal advice, right?
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Darrin
2 months ago
I practiced a similar question, and I think A is the best choice because these contracts do focus on balanced risk allocation.
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Tennie
2 months ago
I'm not so sure about that. I feel like the buyer might still face significant risks, so B could also be a valid point.
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Carmen
2 months ago
I remember studying that NEC and FIDIC contracts are designed to promote collaboration, so I think A could be correct.
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