Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Revision > 2 > Flashcards

2 Flashcards

1
Q

Which would be a key advantage of using a standard contract template?
a. the buyer will not need to negotiate any terms or conditions
b. it is likely to cover the precise needs of the procurement
c. all the main key risk areas are likely to be covered
d. It ensures that there is the capacity to contract

A

c. all the main key risk areas are likely to be covered

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
1
Q

Q17/James is a lettings manager. He tells a client that there is no water meter in a property and that they will pay a fixed cost of around £30pm. The client moves in and within the first week Thames Water contacts the client and tells them they have taken a meter reading and that they will receive the first bill in six months. It will be based on the amount of water they have used. When the client complains to James, James apologises and admits to them that he did not check whether the property had a water meter or not. This is

a. Innocent Misrepresentation
b. Fraudulent Misrepresentation
c. Negligent Misrepresentation
d. It is not misrepresentation

A

c. Negligent Misrepresentation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
1
Q

Under general legal principles of contract formation, which of the following will always automatically result in the termination of an offer? Select THREE that apply.
a. Acceptance
b. Negotiation
c. Variation
d. Non-disclosure
e. Revocation
f. Lapse

A

a. Acceptance
e. Revocation
f. Lapse

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
1
Q

James walks into a shop. There is a toy with a £5.00 ticket on it. James takes it to the counter and hands over £5.00. James’ action is called
a. a counteroffer
b. an offer
c. an invitation to treat
d. acceptance

A

b. an offer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
1
Q

Explain the following terms
a. ultra vires
b. Caveat Emptor
c. Bona fide
d. “Time is of the essence”

A

a. ultra vires- – public sector organisations may only legally be able to contract to do certain things. The equivalency in commercial companies set out in ‘articles of incorporation’
b. Caveat Emptor - it means let the buyer beware. Buyers must take responsibility for carrying out due diligence before entering into a contract. The law does not protect the buyer against making a bad bargain!
c. Bona fide in good faith
d. “Time is of the essence” it means that delivery is considered primary clause in the contract (rather than secondary) so if this is put in you can terminate the contract. If you don’t put it in them it is seen as less important and you can only claim damages

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Suggest the circumstances when it may be useful to use the following –
a. Performance based specification
b. Framework Agreement
c. Standards within a specification
d. Standard terms and conditions

A

a. Performance based specification – often used for services. i.e. when you want the supplier to determine the best way to achieve a result. You need clear outputs/outcomes
b. Framework Agreement – when the buyers want to pre-evaluate a supplier/s and agree terms and conditions up front. The buyer however may not know the exact times or volumes of requirements but want to simplify the procurement process when a requirement does arise.
c. Standards within a specification – these can act a a shortcut to suppliers and make it clear exactly what the requirements are. If there is a clear need to conform to a standard as such FCS or food standards then quoting this in the specification can make it very clear to the supplier what the requirement is. Need to be very careful not add in standards that are really not required as this can reduce competition and add cost.
d. Standard terms and conditions – low value one off purchases

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Give your own examples of the following scenarios
a. Past Consideration
b. Implied Consideration
c. A promise to perform an existing obligation

A

a. Past Consideration - supplier comes to you and states that they added 6 additional parts to the last delivery they made three months ago and now they would like payment for it.
b. Implied Consideration-a supplier contact you to ask you about the next service. They state that as well as servicing the boiler they would like to service two pumps on the shop flow. You agree
c. A promise to perform an existing obligation – a supplier is on contract to service the fire alarm systems and attend call out when the system fails. All parts, 24 hours call out charges and labour are included. The fire alarm goes off in the middle of the night. There is no fire and the alarm cannot be silenced-a fault light is showing on the panel. The company is contacted and they have to send someone out for three hours from 1am to 4am. The engineer says that the company will be sending an extra bill because it is the middle of the night they need to charge an extra £200.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Explain the following
a. title to goods
b. acceptance by performance
c. transfer of risk
d. specific performance

A

a. title to goods A Standard Clause to be used in a contract for the sale of goods to specify when title to the goods passes from the seller to the buyer. (ownership passes)
b. acceptance by performance-acceptance can be implied by actions. If the purchasers uses the goods then it is assumed that they have accepted the terms on which they are offer
c. transfer of risk- the point at which liability for damage transfers from one party to another (not the same as ownership)
d. specific performance -where a court order a party that I in breach of contract to perform exactly what it is required to do under the contract-ensures they cannot just get out of it by paying damages
e. force majeure-exclusion clause which relates to things that are outside the control of the parties, but why by their nature they are unforeseeable. Acts of good

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Q/ Express terms apply in all contracts through the buyer’s and supplier’s statutory rights. Is this correct?

a. Yes, in most jurisdictions there are expressly stated statutory rights.
b. No, these terms are specifically stated within the contract.
c. Yes, all terms must be expressly stated in the contract to be legally binding.
d. No, if it is a verbal agreement no terms will apply at all.

A

b. No, these terms are specifically stated within the contract.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Q/ Jurisdiction and Express Terms are likely to appear in (Select 2)

a. Specifications
b. Contracts
c. Service Level Agreements
d. Standard terms
e. KPIS

A

b. Contracts

d. Standard terms

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Q/ Model contract forms are popular in some industries because they offer additional protections to suppliers. Is this correct?

a. Yes, in most industries model contracts provide additional supplier protections.
b. No, they are popular because in some industries it is a legal requirement to use them.
c. Yes, in most industries model contracts considerably limit supplier liability.
d. No, they are popular because they are widely accepted in some industries.

A

d. No, they are popular because they are widely accepted in some industries.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Q/. What are the following model form contracts used for

JCT
FIDIC
NEC
IMECHE/IET
CIPS

A

JCT-construction
FIDIC-construction-electrical and mechanical works
NEC-Construction
IMECHE/IET-electrical-mechanical and engineering
CIPS-IT

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Q/ What factors need to be considered when agreeing liability and indemnity terms in contracts?

A

Liquidated damages
Exclusion of liability (i.e. force majeure)
Negligence of the other party
Indemnity
Financial limit of indemnity
Limiting scope of liability
Transfer of liability – transfer of risk

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Q/. 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?

a. Indemnity
b. Intellectual property
c. Liquidated damages
d. Warranty

A

a. Indemnity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Q/ Briefly explain the following types of insurance
Employer’s liability
Public/products liability
Professional indemnity (PI) cover
Goods in transit cover
Works/buildings

A

Employer’s liability- compensation for injury suffered in the course of employment
Public/products liability- injury, loss or damage caused by the company’s products, or on its premises, or as a result of the actions of its personnel
Professional indemnity (PI) cover - losses that occur as a result of poor or negligent advice that is given in a professional capacity (for example by accountants or engineers)
Goods in transit cover - damage caused during the delivery process
Works/buildings - cover for partially completed building works, or the buildings in which they are being carried out

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Q/ Explain why a supplier may want to limit liability

A

They will want to limit what they are legally responsible for. For examples -they may agree to accept liability for direct losses but will want to limit accepting any liability for Indirect losses.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Q/ You have contents insurance. It states that though you can make multiple claims within the year, each claim will pay out a maximum of £30,000? This is

a. each and every insurance
b. individual insurance
c. aggregate insurance
d. exclusion insurance

A

a. each and every insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Q/ A construction company employs builders and carpenters but if a requirement comes in for electrical services then they place an order on one of their suppliers who will complete the work on their behalf. This is

a. outsourcing
b. insourcing
c. employing
d. subcontracting

A

d. subcontracting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Q/ What is meant by the scoping stage of specification development?

A

Scoping means setting out the objectives of the exercise, limit and constraints, preferred processes and the roles and responsibility of the teams. This stage should normally be managed by a procurement professional. Need to consider who is responsible for producing the first draft of the specification?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Q/ A clause states that if a product breaks down within the first 12 months it will be repaired or replaced free of charge. It is a

a. Remedy
b. Guarantee
c. SLA
d. Performance standard

A

b. Guarantee

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Q/ Which of the following are necessary conditions for misrepresentation within a commercial agreement? Select the THREE that apply.

a. The statement must be made after the contract is created.
b. The statement must relate to fact.
c. The statement must be false.
d. The statement must be made by a contracting party.
e. The statement must be made in public.
f. The statement must have market credibility.

A

b. The statement must relate to fact.
c. The statement must be false.
d. The statement must be made by a contracting party.

11
Q

Q/ Describe the benefits of clearly stating within the contract the circumstances and mechanism when prices can be adjusted.

A

Gives certainty to both parties
Can be linked to contract specific indices or economic indexes (such as RPI)
Supplier less likely to inflate prices at the start of the contract because they know there are mechanisms for adjustment if their prices increase.

11
Q

Q/ How can terms be used to support labour or ethical standards?

A

Insisting on minimum labour standard
Environmental impacts-how-use of KPIs, adherences to standards
Social impacts-KPIs, express clauses such as social benefit clauses
Fraud, bribery and corruption-adherences to Bribery Act 2010 or other legislation
Subcontracting
Upstream impacts-how suppliers’ supplier act

11
Q

Q/. Explain what the difference is between cost and price

A

Price is the amount expressed in units of currency to be paid by the purchaser to the supplier in order to obtain the goods or services
Cost is the total sum of amounts paid by the supplier in order to produce the goods or services
NB- There is a clear relationship between cost and price, but it is not always a direct one

11
Q

Q/ Which of the following are characteristics of liquidated damages within a contract?

Apply excessive penalties for all breaches.
Explain the process for dispute management.
Set out the circumstances when they apply.
State the financial implications for the supplier.
a. 1 and 2
b. 2 and 3
c. 3 and 4
d. 1 and 3

A

b. 2 and 3
2. Explain the process for dispute management.
3. Set out the circumstances when they apply.

11
Q

Q/ The schedule states that the labour rate should be £250.00 per day and there is a list of parts with an agreed price per part. This is a

a. schedule of rates
b. combination rate
c. cost schedule
d. fixed fee

A

Combination rates

May require a schedule of rates-which combines both goods (parts) and services (labour). Common in maintenance

12
Q

Q/ Describe 2 advantages and 2 disadvantages of developing a specification document from a pre-written specification.

A

Benefits

1) Specifications are shorter- no need to repeat all the detail that is included in the standard-just reference the standard
2) Suppliers can understand specifications more quickly
3) Where international standards are used it removes a barrier to trade
4) Use of the standard allows for different approaches to be offered, all of which will meet the desired outcome, without procurers having to second-guess what such approaches might be
5)Use of the most up-to-date international standard should ensure that all recent influences (up to a point in time) have been considered

Disadvantages

1)In-house staff may not be familiar with which standards do or could apply, so simplification opportunities are missed
2)Staff may not fully understand the implication of the standards that they quote, and inadvertently create conflicts within the specification by drafting precise requirements that do not agree with the standard
3)Staff may not fully understand either the quoted standard or their own operating environment and, as a result, use standards in situations for which they are not designed, thereby possibly adding cost without value
4)Insufficient thought can be given to what needs to happen when the standard is updated
5)SMEs may not be as familiar with international standards as larger companies, while still being capable of doing what is actually required

12
Q

Q/ What is a non-disclosure agreement and why might it be needed in specification development?

A

Intellectual property issues (non-disclosure agreements). Needed to maintain confidentiality, particularly if a supplier is involved in the development or it will be going to external parties

12
Q

Q/ Why is it useful obtain a range of comparable specifications before starting first draft of a specification

A

It is always easier to critique than it is to create. A blank page is never a good starting point for a discussion.
Most of the necessary elements will be covered, acting as a prompt to ensure they are considered and a conscious decision made to include or omit.
Using more than one sample specification provides ideas and options regarding different potential solutions.
Using more than one sample specification is a good way of understanding the quality variations available.
Cross-references to legislation, international standards or codes of practice act as prompts to check what you need to comply with.
The sample specification(s) may suggest ways in which innovation can be promoted or captured during the life of the contract

12
Q

Q/ This type of pricing supports budgeting for the buying organisation but if prices increase the supplier will bear all the risk. This type of pricing is

a. Cost plus
b. Fixed
c. Target
d. Incentivised

A

b. Fixed

12
Q

Q/ Explain what is meant by the term cost-plus pricing and give two advantages and two disadvantages of this pricing.

A

Price is set on the basis of cost, plus an agreed profit mark-up
* Cost + (cost x % mark-up) = price (example cost £20, mark up 25%-£20 + (£20 x 25%) = £25)
* Identifying the agreed ‘cost’ figure may be challenging
* Requires a degree of trust and open-book accounting between parties
Advantages

1) You know will only be paying a fixed profit mark up-so you can ensure this is competitive
2) Risk of supplier collapse is reduced
Disadvantages

1) unable to budget, as you do not have a fixed overall price you will pay
2) There is no incentive for the supplier to manage their costs

12
Q

Q/ Explain what is meant by “standardisation” of requirements

A

The process of making products or processes conform to a standard. Standardisation has many benefits. Increased standardisation reduces the range of products available, but there might be cases where increasing the range is a better option.

12
Q

Q/ Which of the following arrangements permit the supplier to charge more, in certain circumstances, over the term of the contract? Select the TWO that apply.

a. Pricing schedules.
b. Fixed priced.
c. Incentivisation.
d. Indexation.
e. Price adjustment formula.

A

d. Indexation.

e. Price adjustment formula.

12
Q

Q/What are the disadvantages of not allowing any price adjustment in the contract. When might this approach be suitable?

A

You a guaranteed to pay a fixed price which allows budgeting, but it is inflexible, one party will lose and the other will gain and the supplier may be tempted to quote a higher initial price to cover the expected costs.
It is suitable for short term contract, which have a detailed specification and where the specification is not likely to vary.

13
Q

Q/ Shortcuts to writing specifications includes (select 3)

a. SLAs
b. KPIs
c. standards
d. codes of practise
e. standard Ts & Cs
f. Branded products

A

c. standards
d. codes of practise
f. Branded products

13
Q

Q/ A major retail organisation has come under pressure from consumers to place more emphasis on social value when sourcing its products. It should prioritise which of the following criteria when developing specifications and selecting suppliers?
1. Reducing product costs.
2. Supporting local communities.
3. Improving working conditions.
4. Increasing sales revenues.
Select one
a. 1 and 2
b. 2 and 3
c. 3 and 4
d. 1 and 3

A

b. 2 and 3
2. Supporting local communities.
3. Improving working conditions.

13
Q

Q/ Why might it be important to develop a dialogue with suppliers during the specification development process?

A

Understanding of the market can support the development of a better specification.

14
Q

Q/ Select two benefits of standardisation

Durability
Cost Savings
Reduced Inventory Levels
Flexibility
a. 1 and 2
b. 1 and 3
c. 2 and 3
d. 2 and 4

A

Cost Savings
3. Reduced Inventory Levels

14
Q

Q/ List two advantages of increasing the range of products

A

Greater competitive advantage

Greater Innovation and flexibility

15
Q

Q/ Compliance with the ILO is an example of

a. Ethical Practise
b. Environment Practise
c. Technical Standard
d. Quality standards

A

a. Ethical Practise

15
Q

Q/ How does information assurance relate to information governance?

A

Information Assurance should sit within a wider context of information governance (IG), i.e. protection of information managed outside of technical ICT systems

Key roles for IA and IG in developing specification are

ensuring that specifications based on valid and accurate data
specification should include requirements for meeting the necessary standard of IA

16
Q

Q/What is
ISO27001
ISO14001
ISO9001

A

ISO27001-information security standard
ISO14001-environmental management standard
ISO9001-quality management standard

17
Q

Q/ It is important that KPIs are linked to

a. organisation objectives
b. mission statements
c. governance mechanisms
d. delivery and quality standards

A

a. organisation objectives

18
Q

Q/ Which of the following are likely to feature within an output-specification?
1. Product functions
2. Technical inputs
3. Performance requirements
4. Conformance standards
Select one
a. 1 and 2 only
b. 2 and 3 only
c. 1 and 3 only
d. 2 and 4 only

A
  1. Product functions
  2. Performance requirements
19
Q

Q/ Suggest three elements that should be within a management response section of a service level agreement

a. a list of the KPIs
b. first action response
c. when the requirements should be waived
d. escalation process
e. the point when a failure become a potential breach of contract
f. a list of definitions

A

b. first action response
d. escalation process
e. the point when a failure become a potential breach of contract

20
Q

Q/ What should be in the quality definition of an SLA

A

What the minimum standards are, failure of which is a breach of contract
What is an unacceptable standard of quality
Poor standards which may not ever be serious enough to become a breach of contract but might warrant a service credit or penalty payments
What exceeds the standards
(Note this could be in the SLA or the spec but not both)

21
Q

Q/ Where would not you expect to see KPIS (Select 2)

a. SLA
b. Standard T & Cs
c. Specification
d. Articles
e. Contract Schedules

A

b. Standard T & Cs

d. Articles

22
Q

Q/Which would be a good approach to contracting? (select 1)

a. purchasing everything on standard ts & cs
b. having an SLA as the only contract between the parties
c. not including the specification as part of the contact
d. including a specification and SLA as part of a set of contract documents

A

d. including a specification and SLA as part of a set of contract documents

23
Q

Q/ Under what circumstances may you have to use a supplier service level agreement?

A
  • Some SLAs will be Supplier-defined, as they have standard SLAs. IT contracts often have standard supplier SLA that they insist you sign up to
24
Q

Q/ Which of the following enables bidders to present solutions that the buyer might not have considered when responding to an Invitation To Tender (ITT)? (Select 1)

a. Technical specification.
b. Input specification.
c. Performance specification.
d. Conformance specification.

A

c. Performance specification.

Revision (11 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions