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CIPS Commercial Contracting Sample Questions (Q76-Q81):

NEW QUESTION # 76
Which of the following are NOT covered by CISG? Select TWO that apply:

Answer: A,E

Explanation:
United Nations Convention on Contracts for the International Sale of Goods (Vienna Convention or CISG) Vienna Convention was prepared by by the United Nations Commission on International Trade Law (UNCITRAL) and adopted by a diplomatic conference on 11 April 1980. The Convention was welcomed by several countries from different geographic areas, with different legal and political systems. As of 20 August
2020, the Convention has93 Contracting States. The Convention has proved the effectiveness of an uniform text on international trade law.
What CISG covers, and what it does not
In the 6 first articles of the Convention, the authors set up the boundaries of its application.
First is about where it applies. According to UNCITRAL, the Convention applies to contracts of sale of goods between parties whose places of business are in different States and either both of those States are Contracting States or the rules of private international law lead to the law of a Contracting State. A few States have availed themselves of the authorisation in article 95 to declare that they would apply the Convention only in the former and not in the latter of these two situations. As the Convention becomes more widely adopted, the practical significance of such a declaration will diminish. Finally, the Convention may also apply as the law applicable to the contract if so chosen by the parties. In that case, the operation of the Convention will be subject to any limits on contractual stipulations set by the otherwise applicable law.
Second, the Convention has a list of goods that are not subject to its application in Article 2. Article 3 clarifies the differences between manufacturing contracts and sale contract.
Third, Article 4 and 5 clearly states what CISG does not covers, including grounds for contract invalidity and liabilities to death or injury of person caused by the the goods Finally, the Convention respects the contractual freedom of the trading parties. Trading parties may select this convention as governing law or select other instrument, such as UPICC or domestic laws.
Reference:
- Governing law in International Contracts - Would you choose CISG or UPICC (Part 1)
- CIPS study guide page 49-52
LO 1, AC 1.2


NEW QUESTION # 77
Which of the following is the procedure that makes no further competition under a framework agreement?

Answer: B

Explanation:
Direct call off is the act of placing an order under a framework agreement without having further competition.
Standing offer is an available offer.
Blanket order is another name of framework agreement
Closed system is a requirement of framework agreement. It is a system or process that, once started, does not allow new entrants.
Reference:
LO 1, AC 1.3


NEW QUESTION # 78
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

Answer: B,D,E

Explanation:
The difference between cost and price is profit. According to Michael E.
Porter, the profitability of an industry is shaped by five forces:
1. Competition in the industry
2. Potential of new entrants into the industry
3. Power of suppliers
4. Power of customers
5. Threat of substitute products
The Question: only mentions
external factor, then business strategy is not accepted.
Reference:
LO 3, AC 3.3


NEW QUESTION # 79
Which of the following key performance indicators are most likely to use numerical data as the main source of information?
The critical evaluation of project deliverables
The subjective responses of a satisfaction survey regarding a service
The instances of late deliveries within a given month
The occurrence of accidents and near misses in a year

Answer: D

Explanation:
KPIs that involve actual counts or quantifiable incidents are considered quantitative and use numerical data.
"Late deliveries" and "accidents or near misses" are measured in numbers, making them suitable for numerical performance tracking. The other options relate more to qualitative analysis or subjective feedback.
Reference:CIPS L4M3 Commercial Contracting Study Guide, Chapter 4, Section 4.3.2 - Quantitative KPIs and performance data.


NEW QUESTION # 80
In the UK, Unfair Contract Terms Act 1977 regulates which of the following?

Answer: D

Explanation:
The Unfair Contract Terms Act 1977 (c 50) is an Act of Parliament of the United Kingdom which regulates contracts by restricting the operation and legality of some contract terms. It extends to nearly all forms of contract and one of its most important functions is limiting the applicability of disclaimers of liability. The terms extend to both actual contract terms and notices that are seen to constitute a contractual obligation.
Under this regulation, if a clause within the standard terms in use is considered as 'unfair', the clause will be ineffective (or the other party will be entitled to avoid the clause). At court, the clause that is deemed to be unfair will undergo a 'reasonableness' test or an 'unfairness' test.
Reference:
- Maybe your standard terms are ineffective. Here's why
- CIPS study guide page 135
LO 3, AC 3.1


NEW QUESTION # 81
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