Practice Questions Flashcards
Q1. One advantage of tendering could be:
a. It encourages close relationships .
b. It encourages competition.
c. It can involve a range of stakeholders.
d. It discourages competition.
B
Q2. A criticism of the tendering process is:
a. It encourages fraud.
b. It concentrates on value for money rather than cost.
c. It cannot be used for services.
d. It can be complex and time consuming.
D
Q3. A Buyer is concerned about prompt delivery and has insisted that the requirement for on time delivery is inserted in to the contract as an express term – was this the right thing to do?
a. No. Because on time delivery should be an implied term.
b. No. Because implied terms are more important than express terms.
c. Yes. Because express terms generally take precedence over implied terms.
d. Yes. Because otherwise any delivery requirement would not be part of the contract.
C
Q4. To be valid acceptance must be:
a. Made by a senior manager
b. In writing.
c. Made whilst the offer is open.
d. If sent by letter must be physically received
C
Q5. Which of the following best describes a ‘counter-offer’?
A. The seller agreeing to all of the buyer’s contract terms.
B. The buyer sending a purchase order after seeing a seller’s advertisement.
C. The buyer agreeing to a seller’s quote subject to a revised price.
D. The seller agreeing to negotiate contractual terms with the buyer.
C
Q6. A Buyer wishes to obtain prices for the supply of a specific item. Which of the following approaches would be most useful?
a. RFQ.
b. RFP.
c. RFI.
d. RFX.
A
Q7. If a counter offer is made what happens to the original offer?
a. It is still valid.
b. It is changed.
c. It is destroyed.
d. The original offer is deemed to be accepted.
C
Q8 Acceptance must be:
a. Unconditional.
b. Conditional.
c. In writing.
d. Verbal.
A
Q9. For which of the following purchases is it more likely that a performance specification rather than a conformance specification will be required?
a. Computer software.
b. Branded products.
c. Ready mixed Concrete.
d. Cotton Fabric.
A
Q10. Can consideration given in the past act as future consideration:
a. It can if the new contract is linked .
b. It can if the same two parties are contracting.
c. Past consideration cannot act as future consideration.
d. Past consideration cannot act as future consideration unless sufficient.
C
Q11. Which of the following approaches to developing a specification will provide a buyer with the least amount of choice in the marketplace:
a. Performance .
b. Technical.
c. Use of standards.
d. Brands.
D
Q12.Technical or conformance specifications more likely to be used in which of the following circumstances:
a. We require the part to fit with an existing product.
b. We know little about the product.
c. The performance of the product is more important than the inputs.
d. We wish to encourage supplier innovation.
A
Q13.Performance or output specifications are most appropriate for which of the following:
a. Branded Products.
b. Catering services.
c. Blended Chemicals.
d. A part to fit into an existing machine.
B
Q14. Which of these is an attribute of a service:
a. They can be stored.
b. They are tangible.
c. They can be owned.
d. They are intangible.
D
Q15.In which of the following situation would specifying by brand be most appropriate:
a. When the end user specifies it.
b. When they are perceived as better quality.
c. When the warranty specifies it.
d. When they meet the technical specification.
C
Q16. Which of these is considered to have legal Capacity:
a. Drunk People
b. Company officials
c. Minors
d. The insane
B
Q17. Which Three Ways can an offer come to an end:
a. Death.
b. Acceptance.
c. Deposition.
d. Failure of Conditionality.
A, B & D
Q18. What term is given for specifications where the buyer outlines what they expect the part or material to be able to achieve?
A. Input specification.
B. Performance specification.
C. Conformance specification.
D Technical specification.
B
Q19.The Vienna convention is a voluntary agreement covering:
a. Goods Only.
b. Goods and Services.
c. Goods, Services and Works.
d. Goods, Services, Works and Software
A
Q20.Model forms of contracts are developed by:
a. Governments.
b. Suppliers.
c. Trade associations.
d. Buyers.
C
Q21. What are the benefits of using Standard Terms? (2 apply)
a. It removes the need for expensive legal advice each time they are used.
b. It gives basic contractual protection at low cost.
c. It mitigates the issue of battle of the forms.
d. It gives basic contract protection at high cost.
A & B
Q22. The battle of the forms occurs when:
a. In every transaction.
b. In transactions where the terms have not been pre agreed.
c. Where standard terms and conditions do not apply.
d. Only when agreed by the buyer and the seller.
B
Q23. A Buyer wishes to control sub contracting in a particular contract – which clause could the insert to cover this?
a. Payment clause.
b. Transition clause.
c. Indemnity clause.
d. Assignment clause.
D
Q24. A Supplier publishes a catalogue on an biannual basis. If a buyer wished to purchase from the catalogue when would the contract come into existence?
a. When the supplier publishes the catalogue.
b. When the buyer sends the PO to the supplier.
c. When the order is acknowledged by the supplier.
d. When delivery is made.
C
Q25. An organisation has decided to include an NDA in a contract with a supplier for the design and development of some new equipment was this the right thing to do?
a. No – NDA’s have no legal basis.
b. No- NDA’s cannot be used between organisations only individuals.
c. Yes- An NDA will ensure the supplier keeps all information confidential including that in the public domain.
d. Yes – Providing it specifies the information to be kept confidential and the duration.
D
Q26.Which of the following is a key section of a contract?
a. Articles.
b. Warranties.
c. List of stakeholders.
d. Glossary.
A
Q27. A Contract for hire covers which of the following:
a. It transfers title and possession to the hirer.
b. It transfers title and temporary possession to the hirer.
c. It transfers temporary possession to the hirer but not the title.
d. It doesn’t deal with the issues of title or possession.
C
Q28. A comprehensive quotation provided by the supplier to the buyer can be regarded as which of the following:
a. An Invitation to treat.
b. A Formal offer.
c. A Formal acceptance.
d. A Conditional offer.
B
Q29. Which of the following is a remedy for Misrepresentation?
A. Restitution.
B. Rescission.
C. Repudiation.
D. Remediation
B
Q30. A Buyer has an arrangement with a local bakery for the provision of catering for meetings on a fixed price per head basis. The supplier can end the arrangement at any time. This is an example of which of the following:
a. Spot Contract.
b. Term Contract.
c. Standing Offer.
d. Call Off Contract.
C
Q31. The element of a contract requiring each party to give up something of value is called?
a. Capitalisation.
b. Condition.
c. Consolidation.
d. Consideration
D
Q32. Which of the following are types of Misrepresentation?
A. Fraudulent, Conflicting, Rescission.
B. Fraudulent, Negligent, Innocent.
C. Negligent, Innocent, Guilty.
D. Innocent, Guilty, Fraudulent
B
Q33. A KPI that sets a target for customer satisfaction is concerned with:
a. Cost performance.
b. Quality performance.
c. Sufficiency of resources
d. Delivery performance.
B
Q34. Customer Opinion Surveys are examples of what type of KPI?
A. Qualify.
B. Qualitative.
C. Quantitative.
D. Quantity.
B
Q35. An organisation has procured a cleaning service and wishes to communicate to stakeholder the minimum level of performance expected. They have decided to use an SLA – is this the right move?
a. No- SLA’s only describe the services provided not the expected performance.
b. No – SLA’s only describe the maximum performance levels not the minimum.
c. Yes- It is a legal requirement to provide an SLA for any services procured.
d. Yes- SLA’s do cover the minimum level of performance expected.
D
Q36. Which of the following would be considered when defining KPIs.
a. How often should performance be measured.
b. Does the individual setting the measures have contractual authority.
c. Is the KPI contractually binding.
d. Qualitative measures would not be relevant as they need to be numerical.
A
Q37.In order to ensure a SLA is effective it must (3 apply)
a. Have the same force as any other part of the contract.
b. Be legally binding.
c. Define the consequences for breach.
d. Include a pre-determined and realistic financial penalty.
A, B & C
Q38. One starting point for finding information when developing a specification is to use:
a. A standard form.
b. A sample version.
c. A tender.
d. A model form.
B
Q39. Which of the following best describes the legal interpretation of the term ‘damages’?
A. The supplier being forced by the court to reimburse the buyer for costs
Incurred due to unsatisfactory performance of a contract by the supplier.
B. The buyer invoking a contract clause that enables them to buy the goods from another supplier in the event of late delivery by the original supplier.
C. A supplier being forced by the buyer to replace goods that are found, upon receipt, to be faulty.
D. A supplier being forced by a court to perform a contract in the manner and time stipulated by the buyer.
A
Q40. Which of the following best describes one of the main advantages for the buyer of the‘fixed price’ method of contract pricing?
A. Prices are monitored by reference to independently-published indices.
B. It is particularly useful for contracts for goods whose prices fluctuate over time.
C. It can be used when the exact nature of the work to be done is not known at the outset.
D. The supplier would bear any risk of the contract being under-priced.
D
Q41.Which of the following contracts would be best suited to a ‘indexation pricing ‘method?
A. A contract for the supply of 100 printing machines to be delivered next month.
B. A contract for window cleaning during the next three months.
C. A contract for the supply of lubricating oil for immediate delivery.
D. A contract for road building estimated to take five years to complete.
D
Q42. Which of the following best describes ‘price indices’ that might be used in a contract price adjustment formula?
A. A measure of cost movements of a range of materials published independently of both buyer and seller.
B. Records kept by the buyer of price increases requested by the seller over time.
C. Records kept by the buyer of many suppliers’ price increases over a period of time.
D. A statement by the government indicating that the prices of goods such as oil have increased.
A
Q43. Which of the following best describes the legal significance of an initial written enquiry sent by the purchaser to a potential supplier?
A. An invitation to treat.
B. Acceptance.
C. An offer.
D. Consideration.
A
Q44. Which of the following best describes a potential benefit for the buyer of negotiating a ‘prompt payment’ clause?
A. It is likely to improve the buying organisation’s cash-flow.
B. It is likely to improve the supplier’s cash-flow.
C. It is likely that the supplier will negotiate extra discount with the buyer.
D. It is likely that the buyer will not need to verify the invoice before payment.
C
Q45. Which of the following would most likely be regarded as a disadvantage to a buyer of the fixed pricing method within a contract?
A. The purchaser knows its financial commitment to the contract from the outset.
B. The price of the contract will reflect the supplier’s risk.
C. Any risk of under-pricing is loaded onto the seller, which should ensure that its costing is sound.
D. It can be used for products or services where the supplier can accurately estimate the resources required to fulfil the contract.
B
Q46. Quotations requested from several potential suppliers with the aim of getting better prices are commonly known as which of the following?
A. Counter offer.
B. Competitive bids.
C. Marginal costings.
D. Independent expert estimate.
B
Q47. What is a Force Majeure term in a contract
a. A term implied into the contract to give it business efficacy.
b. An exclusion of liability for events outside the control of either party.
c. An exclusion of liability term for events caused by negligence.
d. A term that highlights the major contractual obligations of the parties.
B
Q48. Which of these is NOT normally a requirement of a good specification:
a. It should be of the correct type.
b. It should be accurate.
c. It should be clear.
d. It should specify the quantity required.
D
Q49. Should you include an insurance clause in major contracts?
a. Yes, to ensure supplier maintains correct level of financial protection.
b. Yes, to ensure that all liabilities are limited.
c. No, because the contract is for goods only.
d. No, as warranties and conditions will cover all eventualities.
A
Q50. Which of the following would generally use stage payments?
a. A Spot purchase.
b. A Long-term contract.
c. A Framework agreement.
d. A Call-off contract.
B
Q51. Which contractual clause allows for an immediate right to compensation without the need for a lengthy dispute?
a. Payment.
b. Indemnity.
c. Assignment.
d. Transition.
B
Q52. Which of the following best describes liquidated damages?
A. Formal written assurance of quality conditions.
B. Predetermined amount payable on breach.
C. A court decision on losses which have been liquidated
D. Damages where a company has gone out of business during the contract.
B
Q53. Labour standards cover which of the following:
a. Employment and procurement procedures.
b. Employment of sub-contractors only.
c. Employment of the workforce.
d. Employment of buyers staff only.
C
Q54.Which statement is true in relation to contractual responsibility?
a. Liability is being legally responsible for something.
b. Indemnity is being legally responsible for something.
c. Warranty is being legally responsible for something.
d. Damages is being legally responsible for something.
A
Q55. Which of the following is a standard covered by the ILO?
a. Unfair discrimination on the basis of marital status.
b. Unfair discrimination of the basis of appearance.
c. Unfair discrimination on the basis of class.
d. Unfair discrimination on the basis of gender identity.
D
Q56. Why would a buyer use a target pricing arrangement?
a. In order to incentivise suppliers.
b. In order to place all the risks on to the buyer.
c. In order to comply with legislation.
d. In order to use a model form contract.
A
Q57.In order to be valid Consideration has to be:
a. Sufficient.
b. Adequate.
c. Complete.
D. Financial.
A
Q 58. A buyer has let a construction contract (for which they have a limited budget) for a new head office for their organisation on a cost plus basis – was this the right thing to do?
a. Yes. Because otherwise the buyer would be unsure of having the project completed on time.
b. Yes. Because it provides cost certainty for the buyer.
c. No. Because the supplier will have no motivation to control costs.
d. No. Because cost plus is unsuitable for large construction projects
C
Q59. In large high risk contracts such as construction it is usual for the Buyer to hold back a proportion of the payment for a specific time in case of defects- this is know as what:
a. Retention sum.
b. Repudiation sum.
c. Defect Sum.
d. Deposit Sum.
A
Q60. Whose terms generally prevail in the Battle of the Forms:
a. It is always the buyers.
b. It is always the sellers.
c. It is who fired the last shot.
d. It is hard to determine.
C
Q61 Which remedy for breach of contract involves one party paying the other for the value of the work performed so far?
a. Force Majeure.
b. Quantum Meruit.
c. Rescission.
d. Liquidated Damages.
B
Q62. Which is the legal phase used in situations where the buyer had the opportunity to read the contract terms and conditions but chose not to.
a. Caveat Emptor.
b. Frustration
c. Force Majeure.
d. Duress.
A
Q63. Which are the Remedies for breach of contract – 4 apply
a. Specific Performance.
b. Impeachment.
c. Damages.
d. Quantum Meruit.
e. Injunction.
f. Imprisonment.
A, C,D ,E
Q64. Which are the 4 ways a contract can be declared void or voidable
a. Illegality.
b. Breach.
c. Duress and Undue influence.
d. Misrepresentation.
e. Failure to perform.
f. Mistake.
a,c,d,f
Q65. A minor term in a contract would is known as:
a. A condition.
b. A penalty clause.
c. A warranty.
d. Innominate.
C
Q 66. A clause considered to be a major term in a contract is known as what:
a. A penalty clause.
b. A condition.
c. A warranty.
d. Innominate.
B
Q67. What is the correct legal name for the situation where one party voluntary forgoes its legal rights in a contract?
a. Lien.
b. Surrender.
c. Waiver.
d. Let.
C
