Question 1

When should liquidated damages clauses be written into a contract?

Options :

A : When the breaching party wants to exclude all its liabilities

B : When the innocent party wants to punish the breaching party.

C : When the loss to the innocent party will be either too uncertain or too difficult to calculate.

D : When the court approves the damages amount before the contract is executed.

Answer: C

Question 2

A company needs to source a product from oversea. It wants to overcome technical barrier to cross-border trade by using standards in the specification. Which of the following is most likely to be incorporated into that specification?

Options :

A : National standards

B : International standards

C : Company standards

D : Brands

Answer: B

Question 3

Crown Commercial Service signed a four-year framework agreement with three suppliers on providing street lightning services. When the services are needed, the agency holds a mini competition. Eventually, the deal was awarded to Amey Public Services (APS) which was not listed as a supplier on the framework. Is this action compliant with legal requirement?

Options :

A : Yes, because APS tender matched all Crown Commercial Service’s requirement

B : No, because APS tender had not been evaluated before contract award

C : No, because once the framework agreement is set up, no additional suppliers can be added to it

D : Yes, because the intention had been to award the contract to APS in line with the framework agreement

Answer: C

Question 4

You are to do the KPIs and targets for international supplier and the following was done
1. Delivery in an hour
2. Return orders in an hour
Is that a good thing or not?

Options :

A : Yes, the higher the targets are, the better the outcomes will be

B : No, because the KPIs are not a realistic and justified

C : Yes, because these targets will propel the suppliers to continuous improvement

D : No, the local suppliers are always the best choice

Answer: B

Question 5

A procurement manager is preparing a long-term contract with a major supplier. She decides to use the variable pricing arrangement using price indices. The payment terms describe the circumstances and mechanism where the price is allowed to change. In order to successfully manage this type of contract, the buying organisation should have...?

Options :

A : Good market knowledge

B : Economy of scale

C : Value for money

D : Selection of base year

Answer: A