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L4M3 Exam Dumps - Commercial Contracting

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Question # 49

RL Corporation are developing a specification for a new piece of equipment. They have no prior experience of procuring the item. The procurement manager wants to understand the benefits and risks of conducting market dialogue to help inform the procurement strategy. Which of the following are three potential advantages of market dialogue? Select THREE that apply.

A.

There is no need to conduct a full procurement process

B.

More collaborative supplier relationships can be developed

C.

Organisations can clarify and optimise the requirements

D.

The procurement process becomes significantly quicker

E.

Purchasers can gauge market interest and competition

F.

Market dialogue is risk-free as there is no contract or agreement

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Question # 50

A supermarket purchases a new batch of house cleaner from new supplier. The supermarket is concerned about possible damage that the house cleaner may cause to consumers' floor. What type of insurance must they cover?

A.

Fire and explosion insurance

B.

Product liability insurance

C.

Professional indemnity insurance

D.

Public liability insurance

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Question # 51

To expand its operation, Steel Co. decides to build a new plant. Despite of excitement, the senior management is very concerned about the complexity and risks of such project. Hugo, the procurement manager, suggests that the company can adopt a model form of contract. What is the advantage of using model form of contract?

A.

It shifts the balance of power in the favour of the buyer rather than the contractor

B.

The company could avoid the need to draft a complex contract from blank

C.

Model form of contract eliminates the need for legal advice totally

D.

The company does not need to draft the drawings as well as specification anymore

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Question # 52

Which of the following is an invitation to treat?

A.

Purchase order

B.

Invoice

C.

Price list

D.

Tender bid

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Question # 53

Which of the following is a disadvantage of using input specifications?

A.

It is difficult to assess suitability of each quotation

B.

It requires a more proactive approach to monitoring

C.

There is less opportunity for innovation

D.

There is no limit to the number of suppliers who can quote

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Question # 54

Which of the following is set down in statute as a liability that exists without any need to prove fault?

A.

Strict liability

B.

Current liability

C.

Contingent liability

D.

Non-current liability

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Question # 55

Which of the following should include in the service level agreement that is an appendix of a contract?

1. How often the service is measured

2. Minimum qualification of supplier staffs

3. Remedies to resolve dispute

4. On time service delivery

A.

1, 3 and 4 only

B.

1, 2 and 3 only

C.

2, 3 and 4 only

D.

1, 2 and 4 only

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Question # 56

Rochdale Ltd is looking for a new IT system to automate some of its operations. In designing the specification, procurement manager supposes that it should be done solely by the IT department who have deep expertise on this matter. Is procurement manager’s opinion appropriate?

A.

No, because challenging the user's demand is the role of procurement

B.

Yes, because designing complex specification would waste procurement manager’s time

C.

Yes, because procurement professional has no expertise in IT sector

D.

No, because designing complex specification could only be outsourced

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