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L4M3 Exam Dumps - Commercial Contracting

Question # 4

Which of the following is most likely to be an one-off contract?

A.

Franchise Agreement

B.

Framework Agreement for supply of mono-crystalline silicon

C.

Contract for construction of a power plant

D.

Commercial lease agreement of an office building

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Question # 5

Which of the following are likely to be implied terms in a contract? Select TWO that apply:

A.

Legal precedence

B.

Definition & interpretation

C.

Contract appendix

D.

Statute

E.

Contract clause

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Question # 6

XYZ Ltd is negotiating a long-term supply contract of important parts with a supplier. Dave, procurement manager teams up with Alla, legal manager to construct a service level agreement. Dave is concerned that poor performance of supplier may cause damages to the operations of the organisation. Which of the following can be used in conjunction with SLA to compensate the buying organisation in case of supplier's poor performance?

1. Warranties

2. Force majeure clauses

3. Penalty clauses

4. Service credits

A.

1 and 3 only

B.

3 and 4 only

C.

1 and 2 only

D.

4 and 2 only

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Question # 7

Which of the following is regulated by standard ISO 14001?

A.

Energy management

B.

Quality management systems

C.

Environmental management

D.

Information security management

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Question # 8

Danielle buys a car from Aaron. Not long after, she receives an proposal from Brian, who is interested in buying the car but his budget is very constraint. Then, Brian decides to sign a hire purchase agreement with Danielle which lasts 4 years. Brian lives very far from Danielle, so he hires Charlie to deliver the car to his place. During the transport, Charlie has an accident and the car is written off. At the time of accident, who has the title of the car?

A.

Charlie

B.

Aaron

C.

Brian

D.

Danielle

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Question # 9

A procurement manager is setting KPIs measurement for user satisfaction. He also wants to encourage users to share the reason why they feel the way they do. Which of the following types of KPI should the procurement manager apply?

A.

Quantitative measure

B.

Numerical measure

C.

Binary measure

D.

Qualitative assessment

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Question # 10

Under hire purchase agreement, when will the ownership of asset legally belong to the purchaser?

A.

When the final instalment is paid

B.

When the purchaser takes possession of the asset

C.

When the down payment is made

D.

When the agreement is signed

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Question # 11

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...?

A.

Penalty

B.

Quantum meruit

C.

Liquidated damages

D.

Caveat Emptor

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Question # 12

To check whether supplier actually complies with the labour standards set out in the contract, the purchaser should have...?

A.

Right to penalise the supplier

B.

Right to terminate the contract

C.

Right of audit

D.

Right to rescind the contract

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Question # 13

Which of the following will be included in a conformance specification?

1. Brand names

2. Description of the operating environments

3. Chemical formulae

4. Required safety level

A.

1 and 2 only

B.

1 and 3 only

C.

1 and 4 only

D.

2 and 3 only

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Question # 14

What is the pricing method that incentivises the supplier to control their costs?

A.

Penetration pricing

B.

Cost-plus pricing

C.

Target Costing

D.

Skimming pricing

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Question # 15

A procurement professional is drafting payment terms for a commercial contract. He is considering about payment method if defective products are found. Which of the following should be embedded in payment terms to control this issue?

A.

Remedies for late payment

B.

Pay-less notice

C.

Invoice preparation

D.

Retention clause

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Question # 16

Which of the following are features of performance specification?

1. Method of achieving the buyer's desired result

2. What needs to be achieved when using the product

3. Purposes of the product

4. Technical and physical characteristics of the product

A.

2 and 4 only

B.

1 and 2 only

C.

1 and 4 only

D.

2 and 3 only

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Question # 17

A company is considering entering a new market. Which of the following are the external factors that influence the difference between cost and price of this company? Select THREE that apply

A.

Procurement policy

B.

Process efficiency

C.

Business strategy

D.

Threat of substitution

E.

Competitiveness of the market

F.

Relative bargaining power of supplier and purchaser

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Question # 18

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

A.

1 and 2 only

B.

1 and 3 only

C.

3 and 4 only

D.

2 and 4 only

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Question # 19

Which of the following is the best definition of “ultra vires”?

A.

Beyond powers

B.

In good faith

C.

From one party

D.

Let the buyer beware

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Question # 20

Which of the following is the set of principles that enables courts to determine exactly what the written contract says and what that must mean, then the court will uphold that?

A.

Order of precedence

B.

Rules of interpretation

C.

Unfair Contract Act 1977

D.

Rules of contract formation

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Question # 21

Which of the following statement is true about one-off contract?

A.

Suppliers have many opportunities to improve the quality during the performance of one-off contract

B.

One-off contracts can be used for services and works

C.

Ad-hoc purchase is not a type of one-off purchase

D.

One-off contracts only apply to low-value, low-risk purchase

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Question # 22

Which of the following are implied terms in sales contracts? Select THREE that apply.

A.

Payment method

B.

Customer satisfaction

C.

Transfer of ownership

D.

Risk transfer

E.

Fitness for purpose

F.

Mode of transportation

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Question # 23

When should liquidated damages clauses be written into a contract?

A.

When the innocent party wants to punish the breaching party.

B.

When the breaching party wants to exclude all its liabilities

C.

When the court approves the damages amount before the contract is executed.

D.

When the loss to the innocent party will be either too uncertain or too difficult to calculate.

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Question # 24

Which of the following are driving forces for increasing use of social and environmental criteria in specifications? Select TWO that apply.,

A.

Process efficiencies

B.

Stakeholder pressure

C.

Insufficient financial resources

D.

Scarcity of environmentally sustainable suppliers

E.

Carbon footprint measure

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Question # 25

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

A.

Exact quantity to be purchased

B.

Call-off procedure

C.

Exact price to be paid

D.

Duration

E.

Insurance

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Question # 26

In common law, which of the following documents is legally binding without the need for consideration?

A.

One-off contract

B.

Hire purchase agreement

C.

Deed

D.

Blanket order

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Question # 27

In which of the following section of a specification, requirements for training to use the equipment will be set out?

A.

Performance

B.

Consultation requirements

C.

Implementation

D.

Issue reference

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Question # 28

Which of the following are likely to be advantages of using invitation to tender? Select TWO that apply:

A.

Short turnaround times

B.

Quick implementation

C.

Driving forward planning culture

D.

Lower administration costs

E.

Reducing risks of bribery and corruption

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