Discuss CIPS L4M3 Exam Topic 8 Question 76

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?

AYes, these forms aim at balanced risk/reward allocation between the parties

BNo, the buyer will bear all the risks derived from the contract

CYes, using these forms will eliminate all the risks

DNo, the contractor won't understand the legal terminology in the contract forms

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

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26 comments · newest first

Weldon 2 days ago

I feel like C is misleading. Yes, using these forms will eliminate all the risks is not true.

Lenna 7 days ago

I agree with Alice. A) Yes, it promotes fairness.

Jaclyn 12 days ago

But what about B? No, the buyer will bear all the risks derived from the contract.

Louvenia 17 days ago

I think it's a good idea. A) Yes, these forms aim at balanced risk/reward allocation between the parties.

Jin 23 days ago

D worries me too. Understanding is vital for success.

Paz 28 days ago

I lean towards B. Buyers often end up with all the burdens.

Monroe 1 month ago

A is the best choice. Clarity in risk allocation is key.

Hector 1 month ago

D is a concern. Legal terms can confuse contractors.

Dacia 1 month ago

I feel C is misleading. No contract eliminates all risks.

Shawn 2 months ago

B seems more accurate. Risks can be heavy on buyers.

Jacqueline 2 months ago

I agree, A makes sense. Fair for both sides.

Delfina 2 months ago

I think A is correct. Balanced risk is crucial.

Martha 2 months ago

D) No way, contractors are used to legal jargon in contracts!

Annmarie 2 months ago

C) Wait, can they really eliminate all risks? Sounds too good to be true.

Jamie 2 months ago

B) No, the buyer will bear all the risks derived from the contract

Shawnta 3 months ago

Totally agree, they promote collaboration!

Trinidad 3 months ago

A) Yes, these forms aim at balanced risk/reward allocation between the parties

Graham 3 months ago

Totally agree with A, it's all about fair risk sharing!

Talia 3 months ago

D) No way, the contractor won't understand the legal terminology!

Layla 3 months ago

C) Wait, using these forms will eliminate all the risks? Really?

Flo 4 months ago

B) No, the buyer will bear all the risks derived from the contract

Martin 4 months ago

A) Yes, these forms aim at balanced risk/reward allocation between the parties

Frederica 4 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?

Darrin 4 months ago

I practiced a similar question, and I think A is the best choice because these contracts do focus on balanced risk allocation.

Tennie 4 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.

Carmen 4 months ago

I remember studying that NEC and FIDIC contracts are designed to promote collaboration, so I think A could be correct.

CIPS L4M3 Exam - Topic 8 Question 76 Discussion