2023 CIPS Updated L4M3: CIPS Commercial Contracting Exam Cram Review
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Download CIPS Commercial Contracting Exam Dumps
NEW QUESTION 37
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 for designing, building and managing the new CRM system. 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.
Cleveland brought the case to the court and sought rescission of contract with Digital. Is Cleveland’s claim appropriate in this case?
- A. Yes, because both parties agreed with rescission of their contract
- B. No, because the contract does not include any provision on rescission
- C. Yes, because Cleveland needs to seek rescission first before claiming for damages
- D. No, because the work had been carried out which could not be returned
Answer: D
Explanation:
Hank’s pre-contractual assurances may amount to misrepresentation. Remedies for misrepresentation could be rescission of contract or damages. Rescission will be impossible in the following instance:
– Where the innocent party has affirmed the contract; that is, acted in a way confirming that they wish it to continue
– Where the claim has not been brought within a reasonable time (this is a point of general law)
– Where restitution (returning to the pre-contractual position) is impossible (e.g. because the goods have been consumed or have deteriorated)
– Where there has been intervention of innocent third-party (e.g., if the goods have been sold on) In this case, the subject of contract is designing, building and managing the new CRM system which is impossible to be restituted. Therefore, the contract cannot be rescinded.
Reference:
LO 1, AC 1.2
NEW QUESTION 38
Consequences and actions that arise from certain KPI scores must be…? Select TWO that apply.
- A. Unilaterally imposed by the purchaser
- B. Documented
- C. Terminated
- D. Deliberately omitted
- E. Mutually agreed
Answer: B,E
Explanation:
Supplier performance management and monitoring is a fundamental part of contract management. It starts with setting KPIs, targets and consequences or actions that arise from KPI scores. The measures, objectives and targets used in the monitoring of the supplier’s performance must reflect those that were agreed when the contract was let. That is why it is important to specify a commitment to continuous improvement at the outset. It would be unfair to the supplier to suddenly introduce a range of measures after the contract had begun – however if such an introduction mid-term through the contract is unavoidable then it should be negotiated and agreed in a professional manner and not merely imposed on the supplier.
In conclusion, the details of how KPIs will be monitored and the actions or consequences resulting from scores achieved must be documented and agreed between the parties. This details may be embedded in the specification or the main body of the contract or it may be set out in a SLA.
Reference:
– Performance Monitoring of Suppliers – CIPS Knowledge summary
– CIPS study guide page 101-109
LO 2, AC 2.2
NEW QUESTION 39
Royal Naval Hospital at Rockstown, Anyport manages a fleet of nine ambulance vehicles. During busy periods, it becomes very difficult to keep track of the location of each ambulance (and the nature of their journey). Continual problems lead to the proposal for a new control system (ERNS).
For this ERNS project, the procurement department has drafted a specification in which only a bullet point list of basic requirements was written down. The procurement manager understands that the specification should be developed more specifically but a cross functional team from the Hospital could not do that. A senior buyer suggests that some of Hospital’s pre-qualified suppliers could support them in developing the specification.
Which of the following should be a priority approach of procurement department in developing dialogue with those suppliers about specification development?
- A. Request for quotation from the suppliers
- B. Internal discussion
- C. General networking
- D. One-to-one meeting with the suppliers
Answer: D
Explanation:
The procurement team has drafted basic requirements in the specification. They will need to develop it further and more specific. Developing market dialogue with supplier is a good solution. There are number of approaches which can be taken to engage with suppliers:
– General meetings: buyer meets supplier at a networking event (such as trade show) or social media. These discussions are unlikely to deliver very specific information.
– One-to-one meetings: This will be most likely to deliver direct input into specification development and supplier-specific product development information.
– Group visits
– Meet-the-buyer events
– Formal negotiations or competitive
The answer for this QUESTION should be One-to-one meeting.
Reference:
LO 2, AC 2.1
NEW QUESTION 40
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