L3M3 Contract Administration Question and Answers

Explanation

Consideration is one of the essential elements of a contract in English law, and it essentially means the exchange of something of value for something else of value, typically goods or services for money.

Normally it is the price to be paid in exchange for goods or services.

Explanation

'Invitation to treat' is less than an offer ie it is not capable of being accepted in any contractual sense.

A common example given of an invitation to treat are goods on display in a shop window.

Explanation

The business case will justify the expenditure.

Of the other answers offered, the only one which needs explanation presumably is 'cost analysis'. This needs to be distinguished from 'price analysis'.

Explanation

Supplier liquidations are to be expected; workers' strikes likewise.

Cargo ships do sink, and your course creator has had cargo in at least two ships which have sunk on the high seas, one of them in The English Channel.

A global pandemic (Covid-19) was highly unlikely (2019), but arrived with devastating conse-quences for commerce and people. Low likelihood, huge impact.

Just because it seems unlikely doesn't mean it's not going to happen.

If you're seriously interested on the effect of apparently chance happenings in our lives, read Nassim Nicholas Taleb - you'll either love him or hate him.

Explanation

The benefit of in-depth interviews is that one may unearth deeper thoughts, ideas or concerns than through a larger quantitative exercise. Qualitative exercises lend themselves to more freedom to ex-plore interesting issues.

Explanation

In English law, implied terms exist, even if you can't see them in the contract documents. They commonly derive from statute. An example is the Sale of Goods Act.

Explanation

When profitability is spoken of as a % the selling price, the profit element is called the margin.

Explanation

Equilibrium price.

The closing price is the price at the end of the day when the market closes.

The other 'prices' shown are nonsense.

Explanation

Essentially the contract is now between two different parties because one party has assigned the contract to someone else.

It's always a good idea to check whether this is permitted under a contract, otherwise you might finish up doing business with someone you didn't plan to do business with.

Explanation

An opportunity cost is the cost of not being able to do something else.

For example, if a firm opts to build a new factory, it may not be able to create ten new retail outlets which was another option open to it, in spending these particular funds. Or if you buy a holiday, you may not be able to buy a new television. The television is the opportunity cost of the holiday ie the benefit foregone.

The other types of cost shown are methods of classifying actual (real) costs. Opportunity costs are, in a sense, not real; they are hypothesized and therefore do not show in the balance sheet or profit and loss account of a business.

Explanation

Term contracts are set up for a period of time, or a 'term'.

The other answer options shown here are the subject of other QUESTION NO: s within this test.

Explanation

Post-tender negotiation.

In my opinion, potentially a very rewarding activity where the rules permit.

Explanation

The answer is 'environmental'.

Explanation

All of those shown are barriers to trade.

Quotas place a numerical limit on what may be imported; embargoes ban certain goods (for exam-ple, no goods originating in Israel may be imported); duties discourage imports; subsidies of local industries undercut foreign competitors (have a search for stories on large airlines being subsidised in various countries, commonly for reasons of prestige); complex customs procedures make import-ing foreign goods difficult (great examples involving France); exchange controls limit the amount of a currency which can be converted into another currency, limiting payment possibilities for imports. Etc.

Of course, most countries using any of these mechanisms repeatedly eulogise on the benefits of free trade....

Explanation

Economic.

I think foreign exchange at least couldn't fit into any other STEEPLE factor, so that's a clincher and it has to be 'economic'.

Explanation

Weaknesses.

One might use a SWOT analysis when appraising potential suppliers for a significant purchase.

Explanation

An agreement between two or more parties which is enforceable in law.

This definition separates a contract from a social or domestic arrangement, in that contracts are in-tended to be enforceable at law. The other answers shown here dilute the concept, and so are unac-ceptableas answers to the question.

Explanation

Trading blocs eg EU, EFTA, ASEAN aim to free up trade within the bloc; the other answers of-fered will negatively affect free trade.

Explanation

Indemnity.

As in 'an indemnity clause'.

'The supplier hereby indemnifies the buyer against / in the event of...'

Explanation

This is true. Profit is what is left over after you've covered all your costs. In simple terms.

Explanation

Since performance specifications are all to do with outputs, 'input-driven' leaps out as being the cor-rect answer here.

Explanation

English law, with Scots and European law being different.

In many Commonwealth countries, the legal system used is based on historic English law, thus many lawyers around the world are familiar with many of the fundamental concepts of English law, including the law of contract.

Contracts should state which legal system applies.

Explanation

The 'firm and unequivocal offer' and 'the basis of a contract' indicate the reference to a formal and binding tender procedure. The answer is therefore 'invitation to tender'.

Explanation

A mini-competition may be held to select a supplier, depending on the wording in the framework arrangement documentation and circumstances at the time.