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CIPS L4M3 Exam Questions
- 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
Note: Premium Questions for L4M3 were last updated On Apr. 30, 2025 (see below)
If service level agreement is used as a schedule that makes up the contract, it will be most likely to be a part of...?
If a service level agreement is used as a schedule to a contract, it will generally have the following contents:
- Service definitions. If the service information is provided by the specification, SLA should only refer to the specification to avoid any inconsistencies.
- Details on how to measure KPIs, who will measure KPIs
- Minimum requirements or targets
- Remedies if the minimum requirements are not met
...
Since SLA often lists out the KPI targets, consequences for not meeting the KPI targets and remedies to situation of poor performance, it is a part of performance management.
LO 2, AC 2.2
EAC Facilities Management is planning for a new construction project in the suburban are
a. They decide to use NEC or FIDIC model form of contract for this project. Is this a right course of action?
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 in construction 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
Which of the following is the international standard for labelling hazardous substances?
GHS stands for the Globally Harmonized System of Classification and Labelling of Chemicals. GHS defines and classifies the hazards of chemical products, and communicates health and safety information on labels and safety data sheets). The goal is that the same set of rules for classifying hazards, and the same format and content for labels and safety data sheets (SDS) will be adopted and used around the world. An international team of hazard communication experts developed GHS.
The Global Positioning System (GPS), originally NAVSTAR GPS, is a satellite-based radionavigation system owned by the United States government and operated by the United States Space Force. It is one of the global navigation satellite systems (GNSS) that provides geolocation and time information to a GPS receiver anywhere on or near the Earth where there is an unobstructed line of sight to four or more GPS satellites. Obstacles such as mountains and buildings block the relatively weak GPS signals.
CODEX STAN 1-1985 is general standard for the labelling of packaged goods.
Environment (E), health (H) and safety (S) (together EHS) is a discipline and specialty that studies and implements practical aspects of environmental protection and safety at work. In simple terms it is what organizations must do to make sure that their activities do not cause harm to anyone.
LO 2, AC 2.1
Infra Constructions receive a contract for construction of a building, and following terms were agreed upon. "The entire cost of the project will be reimbursed to Infra Constructions (estimated cost of the project being $ 25 million). The profits will be 20% of the entire cost of a project subject to a max of $ 5 million." This arrangement is an example of...?
In the contract term, the buyer agrees to pay the contractor the cost of doing project plus a profit. This is an example of cost-plus pricing arrangement.
On the other hand, 'Fixed-pricing arrangement' often refers to lump-sum contract or supply/service contract with fixed price. 'Incentive pricing arrangement' and 'Gain-share/pain-share arrangement' have the same meaning. In this type of arrangement, both supplier and buyer agree on a target (it can be cost, or lead time, or quality, etc). Once the supplier reaches that target, it will be rewarded with a portion of the gain that the buyer gets, and will pay the price if it fails.
LO 3, AC 3.3
Which of the following are most likely to be liabilities of suppliers under a guarantee clause? Select
A guarantee is an agreement given by a trader to a consumer, without any extra charge, to repair, replace or refund goods that do not meet the specifications set out in the guarantee. A guarantee is usually issued by the manufacturer of goods or by a trader that provides goods as part of a service - replacement windows, for instance. Generally, a guarantee provider undertakes to carry out free repairs, for a set period of time, for problems that can be attributed to manufacturing defects.
- Guarantees and warranties
- CIPS study guide page 157-159
LO 3, AC 3.2
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