CIPS L4M8 PAPER ACTUAL QUESTIONS AND
ANSWERS SET A+
✔✔Stages of a contract: 4. Consideration - ✔✔the exchange of one thing for another
within an agreement
✔✔Stages of a contract: 5. Acceptance - ✔✔the point where the offeree accepts the
proposal from the offeror. Offers can be accepted by body language, a formal letter or
email or by paying for the goods/services
✔✔Invitation to treat - ✔✔an expression of willingness to negotiate with the intention of
forming a contract
✔✔Implied terms - ✔✔are always present in a contract in a contract and are set by
national law. The do not have to be written or verbally agreed: they always exist
✔✔Express terms are - ✔✔terms that are negotiated and created rather than being
automatically included. They are agreed between the parties negotiating the contract
✔✔Examples of Implied terms - ✔✔- Sale of Goods Act
- Goods being fit for purpose
- Negligence
- Confidential breaches
✔✔Examples of Express terms - ✔✔- Payment terms
- Specification
- Delivery details
- Quantities
✔✔Standard term contract - ✔✔A pre-written contract that leaves little or no room for
negotiation on terms between the parties
, ✔✔Standard term, or model, contracts include the following elements - ✔✔- Definitions
- General terms
- Commercial provisions: payment terms, liability, performance and delivery details
- Secondary commercial provisions: confidentiality and intellectual property rights
- Standard clauses: force majeure and the law of the country to be followed
✔✔Advantages of standard/model contracts - ✔✔- Saves time
- Saves money
- Industry standard contracts are widely accepted and understood by both buyers and
suppliers
✔✔Disadvantages of standard/model contracts - ✔✔- Bespoke terms may not be
included
- Better terms could be negotiated
- Buyers do not get experience in creating contracts
✔✔Express terms include the following - ✔✔- Price
- Specification
- Payment terms
- Warranties
- Conditions
- Retention of title
- Damages
- Exclusion clauses
- Indemnity clauses
- Breaches
- Termination
- Conflict resolution
✔✔Price can be affected by several of the following factors, which should be considered
when negotiating terms - ✔✔- Profit levels of the supplier
- Budget of the buyer
- Currency fluctuations
- Economic market
- Quality
- Volume
- Supply and demand
- Material availability
- Skill of the workforce
- Immediacy of the requirement
✔✔Negotiating tactics: Take it or leave it - ✔✔The buyer states the price that they
require and says that it cannot be changed. The supplier has to 'take it or leave it'
ANSWERS SET A+
✔✔Stages of a contract: 4. Consideration - ✔✔the exchange of one thing for another
within an agreement
✔✔Stages of a contract: 5. Acceptance - ✔✔the point where the offeree accepts the
proposal from the offeror. Offers can be accepted by body language, a formal letter or
email or by paying for the goods/services
✔✔Invitation to treat - ✔✔an expression of willingness to negotiate with the intention of
forming a contract
✔✔Implied terms - ✔✔are always present in a contract in a contract and are set by
national law. The do not have to be written or verbally agreed: they always exist
✔✔Express terms are - ✔✔terms that are negotiated and created rather than being
automatically included. They are agreed between the parties negotiating the contract
✔✔Examples of Implied terms - ✔✔- Sale of Goods Act
- Goods being fit for purpose
- Negligence
- Confidential breaches
✔✔Examples of Express terms - ✔✔- Payment terms
- Specification
- Delivery details
- Quantities
✔✔Standard term contract - ✔✔A pre-written contract that leaves little or no room for
negotiation on terms between the parties
, ✔✔Standard term, or model, contracts include the following elements - ✔✔- Definitions
- General terms
- Commercial provisions: payment terms, liability, performance and delivery details
- Secondary commercial provisions: confidentiality and intellectual property rights
- Standard clauses: force majeure and the law of the country to be followed
✔✔Advantages of standard/model contracts - ✔✔- Saves time
- Saves money
- Industry standard contracts are widely accepted and understood by both buyers and
suppliers
✔✔Disadvantages of standard/model contracts - ✔✔- Bespoke terms may not be
included
- Better terms could be negotiated
- Buyers do not get experience in creating contracts
✔✔Express terms include the following - ✔✔- Price
- Specification
- Payment terms
- Warranties
- Conditions
- Retention of title
- Damages
- Exclusion clauses
- Indemnity clauses
- Breaches
- Termination
- Conflict resolution
✔✔Price can be affected by several of the following factors, which should be considered
when negotiating terms - ✔✔- Profit levels of the supplier
- Budget of the buyer
- Currency fluctuations
- Economic market
- Quality
- Volume
- Supply and demand
- Material availability
- Skill of the workforce
- Immediacy of the requirement
✔✔Negotiating tactics: Take it or leave it - ✔✔The buyer states the price that they
require and says that it cannot be changed. The supplier has to 'take it or leave it'
