[Jul 14, 2025] Ultimate L4M3 Guide to Prepare Free Latest CIPS Practice Tests Dumps [Q33-Q54]

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[Jul 14, 2025] Ultimate L4M3 Guide to Prepare Free Latest CIPS Practice Tests Dumps

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NEW QUESTION 33
When a supplier signs an insurance policy with an insurance company, which of the following is transferred to insurance company?

Right

Risk

Legal responsibility

Contractual obligation

NEW QUESTION 34
Which of the following are key features of standard terms and conditions? Select TWO that apply

Standard terms always comply with implied terms

Specific to each purchase order

Non-disclosure

Non-negotiable

Designed to be used in repetitive transactions

NEW QUESTION 35
Which of the following will always give rise to a claim of misrepresentation?
1. Silence
2. False thought
3. Statement of fact
4. Representation by conduct

1 and 2 only

1 and 3 only

3 and 4 only

2 and 4 only

NEW QUESTION 36
Which of the following best defines an ‘express’ term in general contract arrangements?

It is a standard set of terms and conditions published by CIPS

It is not necessarily discussed by the parties, but nonetheless forms part of the contract

It is the term that is added to the contract by the law or based upon the facts of the case.

It is clearly agreed between the parties, and is virtually always written down in the contract

NEW QUESTION 37
Which of the following are examples of express terms in a contract? Select TWO that apply.

A retention of title term

Term inserted by the Sale of Goods Act 1979

A liquidated damages term

Term inserted through business efficacy test

Term inserted through the custom of the trade

NEW QUESTION 38
A fashion company is drafting a specification for an order in next year. The company wants to expand its supply base in low cost countries. The procurement department is considering applying standard ISO 3759 on method for the preparation, marking and measuring of textile fabrics, garments and fabric assemblies for use in tests for assessing dimensional change after a specified treatment. Which of the following should be taken into account when embedding this standard into the specification?

Date of publication

Supplier selection

Type of specification

Legality

NEW QUESTION 39
Which of the following is a benefit to the buyer of using model form contracts?

The terms used are advantageous to the buyer

It reduces time and costs in developing a formal contract

No legal advice is required as variations are not accepted

Most suppliers are unfamiliar with the terms used

NEW QUESTION 40
A large company supplies a lot of products. Their shipments are often delayed and customers are not satisfied.
Which of the following KPIs is most likely to be applied to this situation?

Technical support

OTIF delivery

Delay damages

Consignment stock availability

NEW QUESTION 41
A large company supplies a lot of products. Their shipments are often delayed and customers are not satisfied. Which of the following KPIs is most likely to be applied to this situation?

Technical support

OTIF delivery

Delay damages

Consignment stock availability

NEW QUESTION 42
Which of the following are most likely to be substantive elements of the specification of a truck? Select TWO that apply:

Guarantee

Foreword

Expected lifespan

Ethics

Abbreviation

NEW QUESTION 43
Which of the following are always included within a framework agreement? Select TWO that apply:

Exact quantity to be purchased

Call-off procedure

Exact price to be paid

Duration

Insurance

NEW QUESTION 44
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?

Inaccuracy in communication

Threat

Initial impossibility

Fraudulent misrepresentation

NEW QUESTION 45
Which of the following is a key feature of liquidated damage clauses?

The amount of damage is predetermined

Liquidated damage is a penalty

The amount of liquidated damages must be exceptionally larger than the actual damages incurred

The liquidated damages are non-negotiable

Liquidated damages are presented in certain legal contracts as an estimate of otherwise intangible or hard-to-define losses to one of the parties. It is a provision that allows for the payment of a specified sum should one of the parties be in breach of contract.
Understanding Liquidated Damages
Liquidated damages are meant as a fair representation of losses in situations where actual damages are difficult to ascertain. In general, liquidated damages are meant to be fair, rather than punitive.
Liquidated damages may be referred to in a specific contract clause to cover circumstances where a party faces a loss from assets that do not have a direct monetary correlation. For example, if a party in a contract were to leak supply chain pricing information that is vital to a business, this could fall under liquidated damages.
A common example is a design phase for a new product that may involve consultation with outside suppliers and consultants in addition to a company’s employees. The underlying plans or designs for a product might not have a set market value. This may be true even if the subsequent product is crucial to the progress and growth of a company. These plans may be deemed to be trade secrets of the business and highly sensitive. If the plans were exposed by a disgruntled employee or supplier, it could greatly hamper the ability to generate revenue from the release of that product. A company would have to make an estimation in advance of what such losses could cost in order to include this in a liquidated damages clause of a contract.
Limitations of Liquidated Damages
It is possible that a liquidated damages clause might not be enforced by the courts. This can occur if the monetary amount of liquidated damages cited in the clause is extraordinarily disproportional to the scope of what was affected by the breached contract.
Such limitations prevent a plaintiff from attempting to claim an unsubstantiated exorbitant amount from a defendant. For instance, a plaintiff might not be able to claim liquidated damages that amount to multiples of its gross revenue if the breach only affected a specific portion of its operations. The concept of liquidated damages is framed around compensation related to some harm and injury to the party rather than a fine imposed on the defendant.
The courts typically require that the parties involved make the most reasonable assessment possible for the liquidated damages clause at the time the contract is signed. This can provide a sense of understanding and reassurance of what is at stake if that aspect of the contract is breached. A liquidated damages clause can also give the parties involved a basis to negotiate from for an out-of-court settlement.
Reference:
– Liquidated Damages
– CIPS study guide page 158-159
LO 3, AC 3.2

NEW QUESTION 46
Which of the following are typically included in an SLA? Select TWO that apply:

Requirements for packaging

Service definition

KPI detailsCorrect)

Code of conduct

Product’s lifespan

NEW QUESTION 47
Is a verbal contract legally enforceable?

Yes, a verbal agreement is just as legally enforceable as a written one

Yes, but only if you have a witness at the time the verbal agreement was made

No, only contracts in writing will be legally enforceable

No, verbal contracts are never legally enforceable

NEW QUESTION 48
Under English law’s general legal principles of contract formation, which of the following are likely to be offers? Select TWO that apply.

Invitation to tender

Quotation

Purchase order

Catalogue

NEW QUESTION 49
In which scenarios would it be appropriate for a procurement organisation to include contractual indexation and/or price adjustment formulae clauses in a services contract? Select TWO that apply.

The supplier’s directors shall be paid dividends during the term

The supplier’s contract staffing costs will be subject to regulatory increase

The material components were tendered as fixed costs for the term

The supplier’s preference is to switch to a more expensive material specification

The market rates for the supplier’s material costs will vary during the term

NEW QUESTION 50
John Powers is the managing director of ACC Trading Ltd, which provides components to the automotive industry. His company has been providing number plates to Elite Motors Ltd for many years. As John Powers and Peter Ellis, the MD of Elite, have been friends for a long time, there has never been a formal contract agreed between the companies. Following a downturn in the market, Elite Motors Ltd has now been placed in administration. ACC recently delivered 200 number plates but have not received payment. As the number plates have been fitted to some vehicles, the administrators are being very slow to return them. Which clause in a formal agreement would have helped John?

Force Majeure

Retention of Title (Romalpa)

Liquidated Damages

Penalty Clause

NEW QUESTION 51
Which of the following is the model form of contract for construction which is recommended by World Bank?

ITC

JCT

CIPS

FIDIC

FIDIC is the International Federation of Consulting Engineers (or Federation Internationale des Ingenieurs Conseils in French). FIDIC has produced many publications, including the model form contracts, best practice guidances, research on sustainability, integrity and risk management. FIDIC model form contracts have been developed by this organisation since 1999, now they consist of several different books which are marked by colours. Thus, FIDIC model contracts also have the nickname “Rainbow suite of contracts”. Basically, the “Rainbow Suite” include the following books:
* Yellow book: Plant and Design-Build Contract (2 editions: 1999 and 2017)
* Silver book: EPC/Turnkey Contract (2 editions: 1999 and 2017)
* Red book: Construction Contracts (2 editions: 1999 and 2017)
* Emerald book: Conditions of Contract for Underground Works (1st Ed 2019)
* Blue-Green book: Dredgers Contract (2 editions: 2006 and 2016)
* Gold book: Design, Build and Operate Contract Guide
* Pink book: Construction Contract Multilateral Development Bank Harmonised Ed (2 editions: 2005 and 2010) This type of model contract is commonly used around the world because its author, International Federation of Consulting Engineers, collaborates closely with development banks such as World Bank, Africa Development Bank, Asia Development Bank, etc. Every construction project that is financed by these institutions must adopt the FIDIC contracts.
The Joint Contracts Tribunal, also known as the JCT, produces standard forms of contract for construction, guidance notes and other standard documentation for use in the construction industry in the United Kingdom. From its establishment in 1931, JCT has expanded the number of contributing organisations.
ITC (International Trade Centre) produces contracts specifically designed for small companies doing international business, covering the sale of goods, distribution, services and joint ventures. Many small companies are now engaged in international trade, but don’t have access to the necessary contract forms to protect themselves. ITC and leading legal experts developed eight generic contract templates that incorporate internationally recognized standards and laws for most small business situations.
CIPS has several model forms of contract designed specifically for IT buying and servicing.
Reference:
LO 3, AC 3.1

NEW QUESTION 52
Which of the following are always considered as minimum preconditions for a contract? Select TWO that apply:

Specification

Promise

Omission

Consideration

Intention to be bound

NEW QUESTION 53
Which of the following are express terms?
Sale by description
Fitness for purpose
Passing of risk
Passing of title

1 and 2 only

2 and 3 only

2 and 4 only

3 and 4 only

NEW QUESTION 54
A tire manufacturer entered into a contract with a distributor. In the contract, the distributor is prohibited from selling the tire under the price list. The distributor must pay $5 for each tire sold in breach. The amount of $5 is known as…?

Penalty

Quantum meruit

Liquidated damages

Caveat Emptor

CIPS L4M3 (CIPS Commercial Contracting) Exam is one of the most prestigious qualifications in the procurement and supply chain management field. It is designed to test the knowledge, skills, and competency of professionals who are involved in commercial contracting. L4M3 exam is instrumental in ensuring that individuals have all the necessary skills and knowledge to manage contracts and commercial agreements effectively.

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[Jul 14, 2025] Ultimate L4M3 Guide to Prepare Free Latest CIPS Practice Tests Dumps [Q33-Q54]

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