Discuss CIPS L4M4 Exam Topic 2 Question 52

A multi-national company is seeking to negotiate an agreement with a global supplier for the delivery of fresh produce.

At which stage of the procurement process should the buyer consider Incoterms?

ABefore agreeing the terms of the contract

BOnce the terms of contract have been agreed

CAt the point of placing each separate order

DBefore deciding when to collect the goods

Suggested Answer: A

Incoterms define the allocation of costs, risks, and responsibilities between buyer and seller in international trade. They must be agreed before the contract is finalised, as they form a fundamental part of the contractual terms. Considering Incoterms early ensures clarity on delivery obligations, customs responsibilities, insurance, and transport costs. Selecting Incoterms after contract agreement or at order placement would create ambiguity and risk disputes. Ethical and responsible sourcing requires clear contractual definitions to prevent misunderstandings, ensure compliance, and fairly allocate risk in global supply chains.

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12 comments · newest first

Vilma 2 months ago

I’m leaning towards B. Once terms are agreed, we can finalize Incoterms.

Brice 2 months ago

I agree, A makes sense. It sets the foundation for the deal.

Layla 2 months ago

I think A is the best choice. Incoterms should be clear before the contract.

Ryan 2 months ago

Yeah, it sets the stage for everything else!

Lou 3 months ago

Wait, are Incoterms really that important at the start?

Dalene 3 months ago

I disagree, it’s crucial to consider them early on.

Tora 3 months ago

I think it should be once the terms are agreed.

Justa 3 months ago

Definitely before agreeing the terms of the contract!

Tabetha 3 months ago

I could be wrong, but I think Incoterms might come into play after the contract terms are agreed. That makes me lean towards B, but I need to double-check my notes.

Mauricio 3 months ago

I feel like we discussed this in class, and it was emphasized that Incoterms should be set before the contract is finalized. So, A sounds correct to me.

Nina 4 months ago

I'm not entirely sure, but I remember something about Incoterms being important when placing orders. Maybe it's option C?

Justine 4 months ago

I think Incoterms should be considered before agreeing to the terms of the contract, right? It seems like the logical step to clarify responsibilities first.

CIPS L4M4 Exam - Topic 2 Question 52 Discussion