Which of the following is a true statement on express and implied terms?
Answer(s): B
Express terms are the terms of the agreement which are expressly agreed between the parties. Ideally, they will be written down in a contract between the parties but where the contract is agreed verbally, they will be the terms discussed and agreed between the parties. Implied terms are terms implied into the contract by the courts. They are not expressly set out in the contract but are taken to be as effective as if they were and as if they had been included from day one of the contract. The express terms and any implied terms together create the legally binding obligations on the parties.The types of express terms to be found in a contract are many and varied and will depend on the type of contract. Any term written into the contract is an express term and may refer to price, time scales, warranties and indemnities, limitations on liability, conditions precedent and so on. An implied term is a term which the courts imply into a contract because it has not been expressly included by the parties. This may be because the parties did not consider it, did not think that any problem would arise in relation to it or simply omitted to include it. The courts are very reluctant to imply terms into contracts and will only do so in the following circumstances:1. terms implied under statute2. terms implied under common law3. terms implied because of custom or usage4. terms implied due to previous dealings5. terms implied `in fact' or to reflect the parties' intentions
- CIPS study guide page 126-132- Contracts: Express and Implied Terms LO 3, AC 3.1
Which of the following is most likely to reduce ITT preparation time while maintaining the clarity of tendering documents?
One of the major disadvantages of tendering process is that it is lengthy, bureaucratic and slow. To reduce the preparation time, buying organisation can:- Plan forward- Standardise tendering documents (such as notices, terms and conditions,...) whenever possible- Train procurement staff- Write down policies for tender-waiverBuying organisation should not eliminate the pre-qualification stage from all tendering processes. This stage is used as a filter to select the most competent suppliers for next stage in restricted tendering. To save time in this process, you can design a model questionnaire.
CIPS study guide page 5 LO 1, AC 1.1
What is the purpose of using key performance indicators in procurement and supply?
Procurement teams use key performance indicators (KPIs) to ensure vendors comply with (and hopefully exceed) the obligations outlined in a contract. They help us better understand suppliers' performance, measure their output over a long period of time, and identify areas where improvement is needed.Put simply, it's good business sense to make sure you're actually getting what you've paid for. This might be as straightforward as confirming a product or service is delivered on time, which means the KPIs you need to use will be minimal and basic.
- Supplier KPIs | 7 Performance Indicators You Should Be Measuring - Una- CIPS study guide page 101-102 LO 2, AC 2.2
Infra Constructions receive a contract for construction of a building, and following terms were agreed upon. "The entire cost of the project will be reimbursed to Infra Constructions (estimated cost of the project being $ 25 million). The profits will be 20% of the entire cost of a project subject to a max of $ 5 million." This arrangement is an example of...?
Answer(s): C
In the contract term, the buyer agrees to pay the contractor the cost of doing project plus a profit.This is an example of cost-plus pricing arrangement.On the other hand, "Fixed-pricing arrangement" often refers to lump-sum contract or supply/service contract with fixed price. "Incentive pricing arrangement" and "Gain-share/pain-share arrangement" have the same meaning. In this type of arrangement, both supplier and buyer agree on a target (it can be cost, or lead time, or quality, etc). Once the supplier reaches that target, it will be rewarded with a portion of the gain that the buyer gets, and will pay the price if it fails.
CIPS study guide page 176-178 LO 3, AC 3.3
Which of the following are most likely to be liabilities of suppliers under a guarantee clause? Select
Answer(s): B,E
A guarantee is an agreement given by a trader to a consumer, without any extra charge, to repair, replace or refund goods that do not meet the specifications set out in the guarantee. A guarantee is usually issued by the manufacturer of goods or by a trader that provides goods as part of a service - replacement windows, for instance. Generally, a guarantee provider undertakes to carry out free repairs, for a set period of time, for problems that can be attributed to manufacturing defects.
- Guarantees and warranties- CIPS study guide page 157-159 LO 3, AC 3.2
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