Question 1: 

Which of the following would be considered an Ineffective

Contract Term?

Answer-exclusion of liability for negligence.

An ineffective contract term is one that cannot legally be

enforced, usually because it goes against a country's national
law. Having liability for negligence is a legal requirement,
therefore a contract cannot exclude liability for negligence. p. 135

Question 2: 
In what area of a contract may you find KPIs or SLAs?

Answer- Schedules

Explanation
Project-Specific details such as KPIs or SLAs can be included in a
contract by including them as a Schedule. P.19

Question 3: 
Which of the following is a type of Price Index? (in the UK)?

Answer-RPI
Explanation
RPI is the Retail Price Index. The other major Index to be aware
of is CPI (p.180)

Question 4: 
When would a 'Pay-less notice' be issued?

Answer-when an invoice will only be paid in part.

Explanation
A Pay-less notice is a formal notice under a contract stating that
an invoice will only be paid in part and giving the reasons why the
lower amount is being paid. P.190

Question 5: 
What is the name given to a contract that sits directly below and
is directly linked to a higher contract?

Answer-Subcontract
Explanation
A Subcontract sits below a main contract. Sub = below. P. 153

Question 6: 

What does a price index such as CPI measure?

Answer- Change in the cost of living.

Explanation
CPI and RPI are indeces that measure the cost of living. It's
usually expressed as a percentage. P.180

Question 7:
What is the liability period of a Deed?

Answer-12 years.
Explanation
The liability period of a Deed is 12 years. A contract signed
'Under Hand' has a liability period of 6 years. P.40

Question 8: 
Which of the following people would not be legally entitled
to sign a contract?

Answer- a16 years old who works at a procurement

company in the UK.
Explanation
In the UK the age of majority is 18. Therefore anyone under this
age cannot enter into a contract. There are 3 reasons someone
cannot enter into a contract: 1) they are a minor 2) they are
under the influence of drugs / alcohol 3) they are suffering from a
mental illness. There is no upper age restriction and no
restrictions for other medical conditions including hospitalisation.
Having a learning difficulty does not automatically mean you can't
sign a contract, it would depend on whether the courts consider
that there is diminished capacity to understand the contract. P.33

Question 9: 
In a Contract which word is commonly used at the
beginning of each phrase in the Recitals?

Answer- Whereas
Explanation
Whereas conventionally starts each recital. P.18 of the
studyguide.

Question 10: 
Which of the following is not one of the 5 Rights of
Procurement?

Answer-People
Explanation
People is incorrect. The 5 Rights of Procurement are; quantity,
quality, time, place and price. P.76
Question 11: 
When should KPIs be reviewed?

Answer-regularly throughout the lifetime of the contract.

Explanation
KPIs should be reviewed regularly (this is verbatum what the
textbook says on p.116)

Question 12: 
Which of the following is a disadvantage to using a
template contract?

Answer-it may become out-of-date.

Explanation
Template contracts can quickly become out-dated. Particularly if
there is a change in the law. Many templates therefore use a
Schedule of Ammendments for when this happens. P. 147

Question 13: 
When does legal liability transfer from the purchaser to
the insurance company?

Answer-Never.
Explanation
Legal liability does not transfer to the insurance company - the
insurance company agrees only to meet the costs on behalf of the
party with the liability, not to take on that liability. P. 150

Question 14: 
When is the best time for the buyer's express terms to be
provided to a supplier in an open competition process ?

Answer-as part of the invitation to tender.

Explanation
Express terms should be stated in the ITT. This will allow
suppliers to understand what the buyer requires and whether
they would be happy to fulfil those terms.
Question 15: 
Which of the following are appendices to a contract?

ANSWER-SCHEDULES.
Explanation
Schedules are appedices to the contract- they usually provide
more detail on the requirements of the contract. P. 129

Question 16: 
Bobby has negotiated a firm fixed price throughout a
contract with a duration of two years. Was this the right
thing to do?

Answer-Yes, this has provided certainty and so it is an aid

to budgeting.
Explanation
Really, we don't know enough about Bobby's situation to know for
sure. So the best approach to this type of question is to look at
each option and determinte if it's true or false. Bobby's
negotiated a fixed price which means it can't change- so the first
option is definately incorrect. The second option is also incorrect -
this isn't an unfair term, it's pretty common and who's to say
what's fair anyway? The last answer is also incorrect because
fixed prices aren't always better than spot prices, it depends on
the situation. Therefore the correct answer must be 'this has
provided certainty and is an aid to budgeting'. If Bobby knows the
price for the next two years- this will make his forcasting a lot
easier!

Question 17: 
What is the name given to the series of forms issued
between buyer and supplier which each contain terms that
override the previous documents?

Answer- Battle of the Forms

Explanation
The Battle of the Forms is the correct name for when a buyer and
supplier issue forms (such as POs and delivery notes) each with
their own terms and conditions on. The winner of the Battle of the
Forms is the party who issues the last document - as those are
the T+Cs which will apply. For more on the Battle of the Forms
see p.44
Question 18: 
Protecting information systems, databases, networks etc is
known as what?

Answer- Information Assurance(IA)

Explanation
Information Assurance is the correct answer. More about this can
be found on p.100 (look particularly at the 5 pillars of AI and its
role in developing specifications.)

Question 19: 
What industry is likely to use an IMechE/ IET templated
contract?

Answer-Electrical and Mechanical Plant.

Explanation
IMechE/IET contracts stands for - Institution of Mechanical
Engineers/ Institution of Enginners and create contracts for
design and supply of electrical, electronic and mechanical plant.
This seems like such a super random piece of knowledge but a
very similar question was in my exam. I recommend memorising
the table of Model Contracts on p.142 if you can.

Question 20: 
Stephanie works for a chemical company which needs to
procure a chemical compound. It is vital that this
compound has a certain molecular structure. What type of
specification should she use?

Answer- conformance
Explanation
This should be a conformance specification; the item must be
exactly as Stephanie outlines in the specification or it might not
be suitable. A Performance, Output or Outcome specification are
not suitable for procuring specific chemicals. There are many
exam questions on different types of specifications, I recommend
revising this topic prior to the exam P.8
Question 21: 
What is a non-disclosure agreement?

Answer-A promise not to share information.

Explanation
A non-disclosure agreement, aslso known as an NDA or
confidentiality agreement, is a promise not to share information.
A buyer might ask a supplier to sign an NDA if it is worried the
supplier might leak information to competitors. P. 79

Question 22: 
What does ISO27001 refer to?

Explanation
ISO 27001 = information security management. This is an actual
question on the exam. I recommend learning all of the ISOs listed
on p. 86 as other ones may also be asked.

Question 23: 
Which of the following is a fixed cost in a factory that
makes biscuits?

Aznswer-Rent of the premises.

Explanation
Rent is a fixed-cost (this is the same every month). The other
items are variable costs as costs might increase if demand
increases and more biscuits are produced. Fixed and variable
costs come up in several modules, not just this one, and there
are lots of questions on this throughout the different module
exams.

Question 24:

Which of the following has no legal standing?

Answer- estimate
Explanation
An estimate has no legal standing. It is a supplier's best guess.
P.3 of the study guide
Question 25: 
There may be a valid reason for a buyer to not allow a
supplier to subcontract. Which of the following would be a
valid reason?

Answer-there are security or defense implications.

Explanation
A valid reason for not allowing subcontracting is if there is a
security or defence implication (e.g. in supplying stuff to the
military). The EU Public Procurement Directive 2014 states that
suppliers must be allowed to rely on the resources of others, so a
buyer needs a very good reason not to want the supplier to
subcontract and there are very few exceptions. The above is the
one mentioned in the CIPs textbook. p. 156

Question 26: 
Is a specification a contract document?
Answer-No. A specification is tender document not a
contract document.
Explanation
A specification is only a contract document if it says it is. P. 11

Question 27: 
Why would a company choose to use an e-tendering
system?

Answer-It would improve transparency and accountability.

Explanation
E-tendering systems vastly increase the robustness of the
tendering process- ensuring that fixed deadlines are set, and the
process is transparent to all parties. P.7

Question 28: 
Which of the following is a risk of using a one-off purchase
contract?

Answer-it may not be possible to demonstrate value for

money.
Explanation
Of all of the options listed, only number 4 is a risk. All of the
statements are true for one-off contracts, however only one of
the answers is a risk and therefore correct. Be careful to read the
question as there may be clues that can help! More on one-off
contracts can be found on p.58

Question 29: 
Toby is creating a contract and wants to include a
document which recommends how the supplier should act.
However he doesn't want to be too prescriptive as he
appreciates that there may be other approaches that are
acceptable. What type of document should Toby refer to in
his specification?

Answer-A code of practice.

Explanation
Toby should use a Code of Practice- these are less prescriptive
than Standards; they explain how people working in a particular
sector should behave, but do not detail specific outcomes to be
achieved. P. 85

Question 30: 
Celia is selling a diamond ring that she no longer wants.
Kelly has offered to buy this from her for 50p. Is this
sufficient consideration?

Answer-Yes, this is sufficient consideration as the offer

has monatary value.
Explanation
Sufficient Consideration is anything which has monatary value.
This is not to be confused with Adequate Consideration which
means that the consideration is fair. If Kelly had offered £500 for
the ring, and this was the market value, this would be Adequate
Consideration. 50p is Sufficient Consideration. p.38

Question 31: Correct
A supplier has responded to an email from a potential
buyer who has enquired about their prices for providing
paving slabs. The supplier has also included details
regarding the costs of labour to install the paving slabs.
Can the supplier's email be taken as an offer?

Answer-No, provision of information does not constitute

and offer.
Explanation
Actions which are not considered offers include; ITT, declaration
of intention, a 'mere puff', provision of information. In this
example, the supplier is only providing information. Case Law in
the UK states that responding to requests for information is not
an offer to sell at that price p.30

Question 32: 
A trust runs several hospitals throughout the UK and
spends a significant amount of money maintaining the
buildings and buying equipment. Which of the following is
the most effective arrangment between the organisation
and its suppliers?

Answer- Framework agreements

Explanation
Framework agreements is the correct answer- this is the only
option which is an arrangement between a buyer and supplier.
For more information on Framework Agreements see section 1.3

Question 33: 
In a contract- what is an Article?

Answer- A summary that sets out who the parties are.

Explanation
The Articles is the first aspect of a contract and sets out who the
parties are and what they will be refered to in the contract. The
other definitions given are those of Recitals (factual statement
covering who will perform what role) , Contract Particulars
(specific variables such as completion date) and Schedules
(project specific details like KPIs). See p.18-19 for full details on
this.

Question 34: 
When is a Service-Level Agreement legally enforceable?

Answer-only when it is included in a contract.

Explanation
A Service Level Agreement is only legally enforceable if it is
included / refered to in the contract. Therefore it's always
advisable to include it. P. 110

Question 35: 
What is an advantage of using a template contract?
Answer-the legal meaning of expressions will have been
fully considered.
Explanation
There is only one advantage listed in the options. Although all
statements are true it is important to read the question carefully;
an advantage to using a template contract is that the legal
meaning of words will have been fully considered and possibly
even tested in court p.16

Question 36: 
Which of the following would you not find in a Service
Level Agreement?

Answer- Force Majeur

Explanation
A Force Majeur clause may be included into a contract, but this
doesn't form part of a Service Level Agreement. A Service Level
Agreement details what minimum standards are acceptable, and
what will happen in the event these aren't achieved. For a full list
of what an SLA may include see p. 115

Question 37: 
The United Nations Convention on the Sale of Goods is
commonly referred to as what?

Answer- The Vienna Convention

Explanation
This is the Vienna Convention. There is a clue in the question- the
word convention is used, which should eliminate two of the
answers which are treaties not conventions. For details on the
Vienna Convention see p.35

Question 38: 
In what year was the Sale of Goods Act released?
Answer-1979
Explanation
1979 is the correct answer. This isn't actually in the textbook but
it's rumoured that questions about this piece of Legislation can
come up on the exam.

Question 39: 
Jennifer works for a company that supplies maintenance
and plumbing parts. She has created a Schedule of Rates
to include in a contract. What would this contain?

Answer-An itemized list of component parts with a price

for each item.
Explanation
A schedule of rates is an itemised breakdown of costs - usually
detailing the name of the item and its price. There may be
volume discount applied if large amounts of the item are ordered.
P. 168

Question 40: 
Section 12 of the Sale of Goods Act details what?

Answer-'ownership and the right to sell'

Explanation
The correct answer is 'ownership of right to sell'. This isn't
actually in the textbook but it's rumoured that questions about
this piece of Legislation can come up on the exam. I recommend
learning what each of the sections 12-15 of the Sale of Goods Act
cover in brief detail.

Question 41: 
Richard has offered to buy a house from Tom at the price
of £1m. Which of the following circumstances would not
see this offer ended?

Answer- Richard does not put his offer in writing.

Explanation
The offer doesn't end if Richard doesn't put it in writing. If it's a
verbal offer, it is still valid, even if there's nothing in writing.
There are 6 ways an offer can end; acceptance, withdrawal, lapse
of time, death, rejection, failure of conditionality, acceptance. In
this example, all the other answers would see the offer ended P.
32

Question 42: 
A document which sets out the detailed requirements of
the goods or services you require is known as what?

Answer- specification
Explanation
This is a specification.

Question 43: 
What is a KPI?
Answer- a performance management framework that sets
targets to a supplier.
Explanation
KPIS are a performance management framework; a series of
standards and targets to be achieved by the supplier. This is the
definition given on p.11 Not hitting the KPIs doesn't automatically
make a contract voidable so this is not the correct answer.

Question 44: 
What is a potential problem of using too many KPIs in a
contract?

Answer-It can be time consuming and expensive to

monitor.
Explanation
Using too many KPIs in a contract can be a bad thing; it can lead
to unecessary spending and can take up a lot of time in recording
things that might not be that important. This question is very
similar to a real one in the exam. It's actually quite easy when
you look at the question; it asks you for a problem. Only one of
the options is a problem. Although all of the options may be
correct statements, only one of them is a problem and that is
wasting time and money. Therefore this must be the correct
answer. CIPS love logic questions like this.

Question 45: 
Which of the following can be accepted as 'Consideration'

Answer-Something which the other party doesn’t need.

Explanation
Consideration is something that has monatary value and will be
completed in the future. You must not be under any an obligation
to do this anyway. Therefore the correct answer is 4- whether or
not the other party 'needs' what you are offering doesn't matter it
is still 'consideration' in the legal sense. p.38

Question 46: 
What is 'the ability of a buyer to deduct debts owed from
one contract, from payments for another contract' more
commonly known as?
Answer-'Right of Set-Off'
Explanation
This is the definition 'Right of Set-Off' given on p. 159 of the
studyguide.

Question 47: 
What is an SLA?
Answer- Service Level Agreement.
Explanation
Service Level Agreement. See p.15 for a full description

Question 48: 
Which of the following is not an agency which provides
National Standards which may be included in a
specification?

Answer-ISO
Explanation
This question tests your reading skills, more than your
procurement knowledge, and hinges on the word national. Three
of the answers given are national agencies as they include a
country in the title. ISO is the International Organisation for
Standardisation which is a multi-national organisation. These
types of questions come up in the exam- sometimes the answer
is obvious if you think about it logically, and you don't need to
know anything about the subject. However if you do want to
know about Standards- there's a list of organisations that
produce standards on p. 85.

Question 49: 
Which of the following is an example of a KPI between a
manufacturing company and a supplier who delivers raw
materials?

Answer- delivery on time in full.

Explanation
A common KPI for deliveries is 'on time in full'; the supplier
arrives with all the items required, at the time the buyer
requests. If this doesn't happen, this may affect the buyer's
performance and their profits. It's therefore important that the
supplier is monitored on this throughout the contract. The other
options given are examples of delivery instructions, rather than a
Key Performance Indicators.  P. 110
Question 50: 
Under what circumstances is Collateral Warantee legally
binding?

Answer-when the contract is issued as a deed.

Explanation
Collateral warantee is only legally binding if executed as a Deed
p.39

Question 51: 
Sally is considering using a cost-plus pricing model on a
contract with her new supplier. What is one disadvantage
of this model that Sally should be aware of?

Answer- the supplier has no motivation to control costs.

Explanation
In a cost-plus model, the supplier has no incentive to control
costs as they simply add a % onto the base price as their profit.
That means if the cost of raw materials increase, they have no
incentive to do anything about this, as they'll still make the same
profit selling this on to a buyer. This is explained in further detail
on p.185. The other 3 answers are incorrect; cost-plus models
allow for greater visibility in how prices are arrived at and there's
no reason Sally would pay more using this pricing structure than
another one. The price is inflexible answer describes a 'fixed
price' model, rather than a 'cost-plus' model.

Question 52: 
When a contract benefits society at large (for example in
the creation of additional jobs in the local area), this is
known as what?

Answer- Social Value

Explanation
This is Social Value and links in with Corporate Social
Responsibility. P.97 (Be careful not to confuse Added Value and
Social Value. Added value is something that you as a buyer gain
(such as efficiencies), rather than something society gains.)

Question 53: 
Which of the following would you use if there is more than
one variable to consider when buying?
Answer- Tender.
Explanation
You should use a tender if there is more than one variable. A
quote is for when the only variable is price. An estimate is a 'best
guess' from a supplier. An offer could be anything and isn't
specific.

Question 54: 
Which of the following could be used to motivate a
supplier to identify cost savings?

Answer- Gainshare.
Explanation
Gainsharing is a system of management used by a business to
increase profitability by motivating employees or suppliers to
improve their performance or reduce costs. As this happens
everyone shares financially in the gain

Question 55: 
Which of the following is a provision in a contract under
which one party commits to compensate the other for any
harm or loss arising out of the contract?

Answer- Indemnity.
Explanation
Indemnity is when one party commits to compensate the other
party for loss. An exclusion clause talks about the limits of that
indemnity.

Question 56: 
In which of the following circumstances is consideration
not required?

Answer-where the promise is made by way of a deed.

Explanation
The major exception when consideration is not required to form a
contract is where the promise is made by way of a Deed. P.40

Question 57: 
What type of term is something that is included in a
Schedule within a Contract?

Answer- Express term.

Explanation
Anything set out in a schedule of a contract is considered to be an
express term. There are 2 types of terms; express and implied
(the other options given are therefore incorrect). An implied term
is anything that is implied by law, but isn't necessarily stated in
the contract (such as adherence to the law). An express term is
agreed between the two parties p. 129

Question 58: 
There is a rule to acceptance of offers which means that
letters of acceptance are valid from the date they are
posted, even if they never arrive. What is the name give to
this rule?

Answer- The Mailbox Rule.

Explanation
This is the Mailbox Rule. Note- this rule does not apply in
countries with civil law codes. For more details on the mailbox
rule see p.34

Question 59: 
When using a Framework Agreement, which supplier is
usually selected for a Direct Call-Off?

Answer-the supplier who is the highest ranked.

Explanation
When doing a call-off from a Framework, the Direct-Award
usually goes to the highest ranked supplier. They may not
necessarily be the cheapest; as this will depend on how the
framework was created (e.g. quality may also be considered as
well as price). For more information on Frameworks see p.61