CIPS L4M8 Exam - Topic 11 Question 70 Discussion

Actual exam question for CIPS's L4M8 exam

Question #: 70
Topic #: 11

[All L4M8 Questions]

Describe a situation where amendment or an addendum would need to be created

AExplanation:
After all the due diligence is carried out, before awarding contract to the best supplier, sometimes procurement professionals find themselves in some problem solving situation; this might have been emanated from supplier facing a financial challenge or problems from external environment. Responding to this might require an amendment or an addendum, depending on the case in hand.
An amendment is for a physical change in the existing contract for example; if a contract contains a negotiated and agreed fixed price for the period of the contract but unexpected market forces such as an economic down turn or force majeure occur, the supplier may have to request an amendment order to continue to make a profit.
An addendum is when an additional document is added to the existing contract for example, If a contract have a schedule of rates and the market forces prices up, an addendum can be added to an existing contract with a revised schedule. Once accepted, the addendum becomes part of the con-tract. Addendum are physically used when the forecasted cost of a project rises and approval is needed to increase the contract spend.
*
Refer to the question column for response

Show Suggested Answer

Suggested Answer: A

by Lilli at Apr 02, 2026, 12:59 AM

Limited Time Offer

25%

Off

Get Premium L4M8 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Margo

2 days ago

I'm a bit unsure about the difference between an amendment and an addendum. I think an amendment changes the original terms, but I'm not clear on when exactly to use each one.

upvoted 0 times

...

Melodie

8 days ago

I remember we discussed amendments in class, especially how they relate to changes in pricing due to market conditions. It makes sense that suppliers would need to adjust contracts in those situations.

upvoted 0 times

...