[Mar 20, 2026] Get New L4M3 Practice Test Questions Answers [Q129-Q148]

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[Mar 20, 2026] Get New L4M3 Practice Test Questions Answers

L4M3 Dumps and Exam Test Engine

CIPS L4M3 certification exam is designed for individuals who are involved in commercial contracting, including procurement professionals, contract managers, project managers, and legal professionals. L4M3 exam is divided into three modules, each of which focuses on a specific aspect of commercial contracting. The first module covers the basics of contract formation, including the types of contracts, contract terms, and contract performance. The second module delves deeper into contract administration, including contract management techniques, performance monitoring, and dispute resolution. The final module focuses on contract termination, including contract close-out procedures and post-contract evaluation. Overall, the CIPS L4M3 certification exam is an excellent way for professionals to enhance their skills and knowledge in commercial contracting and advance their careers in this field.

NO.129 Which of the following would be steps in the preparation of an invitation to tender? Select TWO that apply.

Re-writing a model form contract

Creating a detailed specification

Learning International Standards

Advertising the requirement

Publishing your company’s financial reports

NO.130 John Powers is the managing director of ACC Trading Ltd, which provides components to the automotive industry. His company has been providing number plates to Elite Motors Ltd for many years. As John Powers and Peter Ellis, the MD of Elite, have been friends for a long time, there has never been a formal contract agreed between the companies. Following a downturn in the market, Elite Motors Ltd has now been placed in administration. ACC recently delivered 200 number plates but have not received payment. As the number plates have been fitted to some vehicles, the administrators are being very slow to return them. Which clause in a formal agreement would have helped John?

Force Majeure

Retention of Title (Romalpa)

Liquidated Damages

Penalty Clause

NO.131 Which of the following will be always automatically deemed as a consideration?

Promise to perform over and above an existing obligation

Promise given to a third party

Implied consideration

Past consideration

NO.132 Which of the following is the model form of contract for construction which is recommended by World Bank?

ITC

JCT

CIPS

FIDIC

FIDIC is the International Federation of Consulting Engineers (or Federation Internationale des Ingenieurs Conseils in French). FIDIC has produced many publications, including the model form contracts, best practice guidances, research on sustainability, integrity and risk management. FIDIC model form contracts have been developed by this organisation since 1999, now they consist of several different books which are marked by colours. Thus, FIDIC model contracts also have the nickname “Rainbow suite of contracts”. Basically, the “Rainbow Suite” include the following books:
* Yellow book: Plant and Design-Build Contract (2 editions: 1999 and 2017)
* Silver book: EPC/Turnkey Contract (2 editions: 1999 and 2017)
* Red book: Construction Contracts (2 editions: 1999 and 2017)
* Emerald book: Conditions of Contract for Underground Works (1st Ed 2019)
* Blue-Green book: Dredgers Contract (2 editions: 2006 and 2016)
* Gold book: Design, Build and Operate Contract Guide
* Pink book: Construction Contract Multilateral Development Bank Harmonised Ed (2 editions: 2005 and 2010) This type of model contract is commonly used around the world because its author, International Federation of Consulting Engineers, collaborates closely with development banks such as World Bank, Africa Development Bank, Asia Development Bank, etc. Every construction project that is financed by these institutions must adopt the FIDIC contracts.
The Joint Contracts Tribunal, also known as the JCT, produces standard forms of contract for construction, guidance notes and other standard documentation for use in the construction industry in the United Kingdom. From its establishment in 1931, JCT has expanded the number of contributing organisations.
ITC (International Trade Centre) produces contracts specifically designed for small companies doing international business, covering the sale of goods, distribution, services and joint ventures. Many small companies are now engaged in international trade, but don’t have access to the necessary contract forms to protect themselves. ITC and leading legal experts developed eight generic contract templates that incorporate internationally recognized standards and laws for most small business situations.
CIPS has several model forms of contract designed specifically for IT buying and servicing.
Reference:
LO 3, AC 3.1

NO.133 A procurement professional is drafting payment terms for a commercial contract. He is considering about payment method if defective products are found. Which of the following should be embedded in payment terms to control this issue?

Remedies for late payment

Pay-less notice

Invoice preparation

Retention clause

NO.134 A company is considering entering a new market. Which of the following are the external factors that influence the difference between cost and price of this company? Select THREE that apply

Procurement policy

Process efficiency

Business strategy

Threat of substitution

Competitiveness of the market

Relative bargaining power of supplier and purchaser

NO.135 XYZ Ltd and Engineer Corp signed a long-term supply contract in which both parties had agreed on performance targets. Recently, due to increased customer demands, XYZ Ltd realises that they should make changes to the contract with Engineer Corp with regards to performance management. These changes are approved and signed by both the buyer and seller. The changes to the contract are known as…?

An amendment to the prime contract

A stand-alone subcontract to the prime contract

An appendix to the prime contract

A separate counter-offer to the supplier

NO.136 Which of the following indicates the ratio between profit and costs?

Gearing

Margin

Mark-up

Liquidity

NO.137 As a result of a global pandemic, a local hospital is facing significant patient capacity pressures and would like the construction of a new 50-bed ward to be prioritised and fully operational at the earliest opportunity.
Which of the following pricing arrangements would support this aspiration?

Incentivised contract pricing

Fixed price economic adjustment pricing

Time and materials arrangement pricing

Penetration contract pricing

NO.138 Which of the following regulates barriers to the trade of goods between Member States of WTO?

NAFTA

GATT

CISG

TRIPS

NO.139 Which of the following are commonly used as model forms of contracts in construction in the UK?

Select TWO that apply

JCT

NEC

CIPS

IET

NO.140 In order to monitor supplier’s performance, an organization decides to draft performance management frameworks. Which of the following are the components of a performance management framework? Select THREE that apply:

Targets

KPIs

Consequences

Indemnity

Force majeure

Justification

NO.141 Which of the following are the conditions for revocation of offer to be valid?
1. The offeree has not received the offer yet
2. Revocation of offer must be communicated with the offeree
3. Revocation of offer must be sent via email
4. Offeree has not accepted the offer yet

2 and 4 only

1 and 4 only

1 and 3 only

2 and 3 only

NO.142 Under a framework agreement, which of the following are supplier selection mechanisms? Select TWO that apply:

Rescission of contract

Mini competition

Contract for lease

Direct call-off

Call off contract

A framework agreement is an agreement with one or more suppliers/providers which sets out terms and conditions under which individual contracts (call-offs) can be made throughout the term of the agreement.
A framework agreement itself is not a contract, but the call-offs made from it are.
Framework arrangements create a streamlined and flexible process for procuring goods, works or services Where a framework for the same goods, works or services is awarded to several suppliers, there are three possible options for awarding call-off contracts: direct award (or direct call-off), mini-competition or a combination of both.
Option 1 – Apply the terms of the framework agreement (direct award).
Where your requirements match the terms and/or specification of the framework agreement (in the event of any query, you should clarify the situation with the organisation that established the framework), a particular call-off should be awarded without re-opening competition. The call-off should be awarded to the provider who is identified as the most economically advantageous tender based on the award criteria used at the time that the framework was established (i.e. the supplier ranked no. 1). Randomly selecting a supplier off a framework is not permitted.
Option 2 – Hold a mini-competition between capable suppliers.
If your requirements do not match the terms and/or the specification of the framework, you should conduct a mini-competition exercise. Whilst it is not permitted to substantially change the basic terms or specification of the framework, in running a mini-competition it is possible to supplement or refine the basic terms of the framework prior to making a call-off. Examples of such terms are:
– The particular goods/services/works required;
– Particular delivery timescales;
– Particular invoicing arrangements and payment profiles;
– Associated services such as installation, maintenance and training;
– Quantity;
– Functional specification.
Under no circumstances should brand names or brand-specific descriptions of goods be used e.g. BIC Biro Pen, Hewlett-Packard Printer, Dell computer. Descriptions should give reference to the characteristics and outputs of the product or service. Where no other description is possible, any reference should be qualified by adding the words ‘or equivalent’.
When a mini-competition exercise is held, all suppliers appointed to the framework that are capable of meeting the requirement must be invited to submit a tender. (This might just relate to suppliers within a particular ‘lot’). You must not limit the mini-competition exercise to selected providers. A time limit for submitting the tender must be set and advised to competing suppliers. This time limit must be reasonable, taking account of the complexity of the requirement.
The call-off must be awarded on the basis of the framework award criteria and new criteria cannot be added, although, where permitted, the weightings may be varied to take account of a particular requirement. However, in adjusting the weightings, care must be taken to ensure that any such changes do not have an adverse effect on competition.
Option 3 – Combination of direct award and mini-competition
To use a combination approach, the procurement documents must state that this route may be used. The procurement documents will also specify which terms may be subject to the re-opening of competition.
Reference:
– Guidance on the Use of Framework Agreements
– CIPS study guide page 60-62
LO 1, AC 1.3

NO.143 A large company supplies a lot of products. Their shipments are often delayed and customers are not satisfied. Which of the following KPIs is most likely to be applied to this situation?

Technical support

OTIF delivery

Delay damages

Consignment stock availability

NO.144 A construction company is undertaking a housing development project. They need lots of bricks and other building materials, but the construction site doesn’t have large area for storage of materials. Therefore, the company’s suppliers must deliver the building materials with fixed quantity and at fixed time intervals. What type of contract is used between the construction company and its suppliers?

Framework agreement

Spot transaction

One off contract

Call off contract

NO.145 In the UK, Unfair Contract Terms Act 1977 regulates which of the following?

Validity of a contract when it is formed on the basis of misrepresentation

Rules regarding battle of the forms

Effectiveness of contract terms in the standard terms and conditions

Rule of offer and acceptance

NO.146 Which of the following standards gives guidance on the layout and preparation of specifications?

BS EN 60601-1-11:2015

BS 5864:2019

BS 5975:2019

BS 7373-1:2001

NO.147 Sally places a purchase order to the supplier for some components that her company requires. The supplier delivers the goods as she asks, but the quality assurance team finds that these components are defective and unfit for the company’s operations. Which document is the ground to decide whether the goods received are fit for purpose?

CSR policies

Pre-qualification questionnaire

Code of conduct

Specification

NO.148 Which of the following are reasons why a buying organisation adopts a model contract?
1. Extremely advantageous terms for buyer
2. Correct legal terminology
3. Supplier cannot make variation to the model form
4. Specific to industry

1 and 2 only

2 and 4 only

2 and 3 only

1 and 4 only

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[Mar 20, 2026] Get New L4M3 Practice Test Questions Answers [Q129-Q148]

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