CIPS L3M3 Contract Administration Exam Practice Test

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Total 90 questions
Question 1

What do we call a contract term which is part of the contract, but which is not written into the con-tract documents?



Answer : A

In English law, implied terms exist, even if you can't see them in the contract documents. They commonly derive from statute. An example is the Sale of Goods Act.


Question 2

After a framework arrangement is in place, a further XXXX competition can be held. Which word replaces XXXX?



Answer : A

A mini-competition may be held to select a supplier, depending on the wording in the framework arrangement documentation and circumstances at the time.


Question 3

Which one of the following is from the STEEPLE framework?



Answer : C

Socio-cultural. The only 'S' in the framework.


Question 4

Which of the following risks, which could severely impact on a business, is least likely to occur, in your judgment?



Answer : D

Supplier liquidations are to be expected; workers' strikes likewise.

Cargo ships do sink, and your course creator has had cargo in at least two ships which have sunk on the high seas, one of them in The English Channel.

A global pandemic (Covid-19) was highly unlikely (2019), but arrived with devastating conse-quences for commerce and people. Low likelihood, huge impact.

Just because it seems unlikely doesn't mean it's not going to happen.

If you're seriously interested on the effect of apparently chance happenings in our lives, read Nassim Nicholas Taleb - you'll either love him or hate him.


Question 5

Which of the following are external factors in supplier decision-making? Choose two.



Answer : B, C

Market conditions, determining demand and supply, and customer perceptions of value are external factors. One could argue that customer perceptions of value can be altered by the selling company, but in the short-term this is clearly external.


Question 6

The official power to make legal decisions and judgments in a given location, for example



Answer : D

Jurisdiction.

American movies seem to spend half the time with law enforcement people arguing about who has jurisdiction.

Jurisprudence means the theory or study of law; Jurassic is about an age.

de jure means practices which are legally recognised, as opposed to de facto which is about the reali-ty (Wikipedia).


Question 7

A bottle of sparkling water sells for $1. The variable cost is 50 cents. Fixed costs for the business are $100,000 (one hundred thousand dollars). How many bottles of water must be sold for the business to reach breakeven point?



Answer : B

The 'contribution' (selling price minus variable cost) for each bottle is 50 cents. Divide the fixed costs by the contribution (100,000 / 0.5) = 200,000

If your textbook or tutor has not covered this type of calculation, don't worry; it is a difficult ques-tion and is unlikely to be a significant issue in the CIPS examination.


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Total 90 questions