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CIPS L4M3 Exam
- Topic 1: Risks presented by contracting on suppliers terms or through oral contracts/ Analyse the content of specifications for procurements
- Topic 2: Cost plus and cost reimbursable pricing arrangements/ Invitations to treat or invitations to negotiate
- Topic 3: Compare types of contractual agreements made between customers and suppliers/ Standardisation of requirements versus increasing the range of products
- Topic 4: Drafting specifications and developing marketdialogue with suppliers/ Understand the legal issues that relate to the formation of contracts
- Topic 5: Analyse contractual terms for contracts that arecreated with external organisations/ The Vienna Convention on the International Sales of Goods
- Topic 6: Appraise examples of key performance indicators (KPIs) in contractual agreements/ Analyse the legal issues that relate to the creation of commercial agreements with customers or suppliers
- Topic 7: Recognise examples of contractual terms typically incorporated into contracts that are created with external organisations/ Invitation to tender or request for quotation
- Topic 8: Terms that apply to labour standards and ethical sourcing/ Including social and environmental criteria inspecifications
- Topic 9: Recognise types of pricing arrangements incommercial agreements/ The battle of the forms and precedence of contract terms
- Topic 10: Defining contractual performance measures or key performance indicators (KPI)/ Understand the key clauses that are included informal contracts
Free CIPS L4M3 Exam Actual Questions
The questions for L4M3 were last updated On Mar. 11, 2023
Cleveland Insurance (Cleveland) offers a range of insurance services. The main software used in the call centre is a customer relationship management (CRM) system. Cleveland perceived an urgent need to replace the existing CRM system to deal with the increasing number of customers and services.
Urgent Digital Ltd (Digital) is one of the bidders of Cleveland's ITT. Its bid team is led by Hank Irvine, its technical director. Hank realises that winning the Cleveland contract (valued at approximately 50M) will enhance his career. During discussions with Cleveland, Hank offers certain assurances regarding timescales for the project. He has not carried out any investigations into the viability of the timescales. Hank has little idea whether the timescales can be met.
Cleveland decides that Digital's bid meets with its requirements, especially given the assurances in timescale offered by Hank, and decides to proceed with it, subject to a formal contract. Eventually, a formal contract is signed by both parties. The initial assurances given by Hank about the timing of the project are never going to be achieved and are at best grossly exaggerated.
Hank's pre-contractual assurance is most likely to be an example of which of the following?
Hank's pre-contractual assurances may amount to misrepresentation. Fraudulent misrepresentation is a strong possibility since Hank had carried out no investigations into the viability of the project timescales. This could amount to recklessness in using information without taking any steps to see if it is true or not.
The scenario above was constructed based on the case BSkyB v EDS, a famous case in IT sector.
LO 1, AC 1.2
Which of the following are implied terms in sales contracts? Select THREE that apply.
Generally, under the Sale of Goods Acts (in UK, Singapore, Australia,...) or Commercial Codes (in France, Germany, Vietnam,...), the sale contracts have the following implied terms:
- the seller has the right to sell the goods. This is also a condition of the contract
- the goods are free from undisclosed security interests
- the goods supplied under the contract will be reasonably fit for any purpose which the buyer made known to the seller
- sales of unseen goods will be of merchantable quality, and match their description and conform with a sample.
- Passing of risk
- Passing of possession and title
...
LO 3, AC 3.1
Which of the following is always an advantage of using fixed price arrangement in a contract for buying organisation?
Advantages of using fixed pricing arrangement are as below:
- Budget/income certainty - prices are fixed up front and should not change
- The impact of changes to the supplier's cost base is not fed through to the purchaser. If costs diminish, the supplier will benefit from this, and if costs rise, the purchaser will benefit
LO 3, AC 3.3
Which of the following are implied terms in sales contracts? Select THREE that apply.
Generally, under the Sale of Goods Acts (in UK, Singapore, Australia,...) or Commercial Codes (in France, Germany, Vietnam,...), the sale contracts have the following implied terms:
- the seller has the right to sell the goods. This is also a condition of the contract
- the goods are free from undisclosed security interests
- the goods supplied under the contract will be reasonably fit for any purpose which the buyer made known to the seller
- sales of unseen goods will be of merchantable quality, and match their description and conform with a sample.
- Passing of risk
- Passing of possession and title
...
LO 3, AC 3.1
You are to do the KPIs and targets for international supplier and the following was done
1. Delivery in an hour
2. Return orders in an hour
Is that a good thing or not?
KPIs and the targets for supplier should be SMART:
- Specific: What exactly do you want to achieve?
- Measurable: How will you identify that you have achieved your goal?
- Achievable: Is your goal really attainable?
- Relevant: Is it relevant to you or, in other words, does it align with where you want to be?
- Time-bound (or timely): When will you deliver your goal, and what are the key milestones?
The two KPIs (Delivery in one hour, Return orders in one hour) are not realistic and achievable for international suppliers. Therefore, you should not put such high targets for supplier.
- What Are SMART KPIs? (Spoiler: They Don't Really Exist!)
- CIPS study guide page 107-108
LO 2, AC 2.2
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