Which of the following shall help the purchaser control the selection of tier 2 suppliers?
Correct Answer: A
When a party takes on a contractual obligation, they are legally required to perform the obligation. That same contracting party is still entitled to subcontract out the work to another service provider, unless the contract: - is a contract for personal services, such an employment contract - contains an express term preventing subcontracting out the work, or an implied term Subcontracting clauses are written to control whether the contractor is entitled to subcontract, and how purchaser shall control that subcontracting process. Reference: - Subcontracting clauses (delegation of contractual obligations to third parties) - CIPS study guide page 153-157 LO 3, AC 3.2
L4M3 Exam Question 82
Which of the following regulates barriers to the trade of goods between Member States of WTO?
Correct Answer: B
- The General Agreement on Tariffs and Trade (GATT) is a legal agreement between many countries, whose overall purpose was to promote international trade by reducing or eliminating trade barriers such as tariffs or quotas. According to its preamble, its purpose was the "substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis." - CISG is the Vienna Convention on Contracts for the International Sale of Goods. This is a voluntary treaty under United Nations Commission on International Trade Law (UNCITRAL). The purpose of the Vienna Convention is to set out a framework for international transactions based on a uniform approach. It establishes substantive rules that regulate the duties and obligations of both parties, including the delivery of goods, contract formation, and remedies for breach of contract. - The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an international legal agreement between all the member nations of the World Trade Organization (WTO). It sets down minimum standards for the regulation by national governments of many forms of intellectual property (IP) as applied to nationals of other WTO member nations. - The North American Free Trade Agreement (NAFTA; Spanish: Tratado de Libre Comercio de America del Norte, TLCAN; French: Accord de libre-echange nord-americain, ALENA) is an agreement signed by Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. Reference: CIPS study guide page 65-67 LO 1, AC 1.3
L4M3 Exam Question 83
Maximum Score 1 An effective key performance indicator should be:
Correct Answer: C
The recognised KPI standard is the SMART model - Specific, Measurable, Achievable, Realistic, Timely. This ensures clarity and accountability in performance measurement. Reference: CIPS L4M3 Commercial Contracting - "Setting SMART KPIs."
L4M3 Exam Question 84
A senior procurement specialist in UK is preparing a specification in which ISO standards are used to send to global suppliers. Is this action appropriate?
Correct Answer: C
ISO standards are internationally agreed by worldwide experts. They overcome countries' differences and facilitate global trade. If a buying organisation is sourcing globally, they should use ISO standards within the specification. Reference: CIPS study guide page 93-94 LO 2, AC 2.1
L4M3 Exam Question 85
Which of the following is used to detail the complex matter that may be verbiage to the main document?
Correct Answer: B
Without further explanation, a schedule may be deemed to form an integral part of the obligations of either or both parties. Obviously, the scope or binding nature of such schedule depends on the way it is referred to in the obligatory language of the main agreement. Accordingly, merely attaching the general terms and conditions of sale without explaining to which part of the sale they apply or which provisions apply does not subject a sale pursuant to the body text of the agreement to those general terms and conditions. Subcontracting is the practice of assigning, or outsourcing, part of the obligations and tasks under a contract to another party known as a subcontractor. Reference: - Schedules, annexes and exhibits - CIPS study guide page 22-26 LO 1, AC 1.1