Important CIPS L4M3 Exam Questions

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CIPS Commercial Contracting L4M3 Exam

Attempt the Level 4 Diploma in Procurement and Supply practice test and solve real exam-like L4M3 questions to prepare efficiently and increase your chances of success. Our CIPS L4M3 practice questions match the actual Commercial Contracting exam format, helping you enhance confidence and improve performance. With our L4M3 practice exam software, you can analyze your performance, identify weak areas, and work on them effectively to boost your final Level 4 Diploma in Procurement and Supply exam score.

Vendor:	CIPS
Exam Name:	Commercial Contracting
Registration Code:	L4M3
Related Certification:	CIPS Level 4 Diploma in Procurement and Supply Certification
Exam Audience:	Procurement and Supply Professionals,

Total Questions

233

Last Updated

14-07-2026

Exam Duration

90 MINUTES

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Question: 1

Which of the following is most likely to reduce ITT preparation time while maintaining the clarity of tendering documents?

AUsing request for quotation

BStandardising documentation whenever possible

CMonitoring usage

DEliminating pre-qualification stage from all tendering processes

Answer: B

Explanation:

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-waiver

Buying 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.

LO 1, AC 1.1

Question: 2

Bethy sees a coat on shop window with a $100 price tag. She comes and asks the shop owner to buy it. The owner states that the price has not been updated and the current price for the coat is $120. Bethy says the owner should honour the quoted price on window shop. Is Bethy correct?

AYes, the owner has made an offer by showing his product on the shop window and he must honour that offer

BYes, $120 for a coat is extremely unreasonable and the owner's later offer therefore void

CNo, the display on shop window is just an invitation to treat and the owner may change the price at his will

DNo, the owner is revoking his initial offer to sell at $100 and he is proposing new offer to Bethy

Answer: C

Explanation:

Based on two famous precedents, Fisher v. Bell (1961) and Pharmaceutical Society of Great Britain v. Boots Cash Chemists (1953), the display on shop window is considered as an invitation to treat. The shop owner can change the price when his customer asks to buy.

LO 1, AC 1.2

Question: 3

John is a new procurement manager who has recently joined Smiths Facilities Management Ltd. The company provides maintenance services through the utilisation of subcontractors. It is experiencing a number of issues with its supply chain which has resulted in customer complaints, and John would like to introduce service level agreements (SLAs) to some of its key providers. Which of the following should be included?

How often the service will be provided

The procedures to be followed to resolve disputes

The qualifications needed by staff providing the service

The stock maintained by the subcontractor

A1, 3 and 4 only

B2, 3 and 4 only

C1, 2 and 4 only

D1, 2 and 3 only

Answer: A

Explanation:

An SLA typically specifies:

Service frequency (1) -- how often services are delivered.

Staff qualifications (3) -- competence and skill standards.

Stock levels (4) -- inventory of parts or materials the subcontractor must maintain.

Dispute resolution procedures (2) are more appropriately included in the main contract terms, not the SLA itself.

Question: 4

Maximum Score 1

Adornical Toys Ltd have recently declared their commitment to international labour standards. Karim is sourcing a supplier for a new range of wooden toys and is keen to ensure that the organisation's corporate objectives are met. Which of the following approaches could he include as part of his specification requirements to achieve this labour outcome?

ACertification to an ethical trading initiative

BUse ecologically certified raw materials

CAccreditation to waste reduction schemes

DFormally measure their carbon footprint

Answer: A

Explanation:

To meet labour standards, the most appropriate requirement is ethical trading certification (A) -- ensuring fair wages, safe conditions, and compliance with global labour rights.

The other options relate mainly to environmental, not labour, outcomes.

Question: 5

Which of the following is an invitation to treat?

APurchase order

BInvoice

CPrice list

DTender bid

Answer: C

Explanation:

An invitation to treat is an action inviting other parties to make an offer to form a contract. These actions may sometimes appear to be offers themselves, and the difference can sometimes be difficult to determine. The distinction is important because accepting an offer creates a binding contract while 'accepting' an invitation to treat is actually making an offer.

One simple test to distinguish an offer and an invitation to treat is to ask what this statement will become when it is accepted. Now we apply this test to four options:

- Tender bid: Tender bid is submitted by a supplier to an invitation to tender from the buyer. It states the specific quantity, price and other elements. If buyer accepts the bid, there will be a contractbetween them. Therefore, a tender bid is an offer.

- Purchase order: Purchase order which is sent by a buyer will state the items, the quantity, the price and terms and conditions. If supplier accepts the purchase order, there will also be a contract between two parties. It is also an offer.

- Price list: Price list is prepared by a supplier. The price list often states the items and unit price. If a buyer accepts it, the contract has not yet been formed since the contract scope has not yet been decided. It is an invitation to treat.

- Invoice: Invoice is often sent after a contract is formed. It is in fact a request for payment, neither offer nor invitation to treat.

- CIPS study guide page 29-32

- What Is an Invitation to Treat?

LO 1, AC 1.1

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