L3M3 Contract Administration Questions and Answers

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

If it's included with the goods, it's likely to be a delivery note; and the buyer's equivalent would be a goods received note.

Explanation

MEAT: Most economically advantageous tender

An approach to tendering which takes account not only of the selling price, but also other relevant factors.

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

Transfer.

Some of the risk has been transferred to the insurance company.

Explanation

Distributive: at the other end of the spectrum from 'collaborative'.

Explanation

Risk register.

A risk manual is more likely to explain risk(s), and say what should be done regarding risks.

Explanation

Contract price adjustment.

A contract may contain a contract price adjustment clause if the parties feel that costs may move significantly over the contract period. For example, in respect of commodities, metals, currencies or even sometimes, labour. Normally reference would be made to an index or indices which would help determine the direction and extent of adjustment in a minimally controversial way. An example of a widely-used index / formula in the UK is the BEAMA formula.

Explanation

Jurisdiction.

American movies seem to spend half the time with law enforcement people arguing about who has jurisdiction.

Jurisprudence means the theory or study of law; Jurassic is about an age.

de jure means practices which are legally recognised, as opposed to de facto which is about the reali-ty (Wikipedia).

Explanation

Surprisingly, 'declared gifts of nominal value' can be accepted.

Explanation

The seller tries to penetrate the market, to build market share, depriving competitors of those sales, and hoping to retain the customers for future sales. This is penetration pricing.

'Cost mark-up' would be based on cost - add a certain amount to create the selling price. For exam-ple, in UK clothing retail often simply 100% added to the cost of the goods - simple, fast and hope-fully sufficient to coverall costs, as well to enable the goods to sell. This approach hinges on effec-tive buying, at the right cost.

Promotional pricing is a temporary price drop to encourage purchases of a particular product or range.

Competitive pricing would simply mean pricing at around the market level - monitoring market and competitor prices.

Explanation

Cost of production, and shareholder and managerial expectations of profit, are both internal factors in decision-making. Although shareholders may be outside the firm, management will condition shareholders' expectations. Customer perception of value and the extent of marketplace competition are significantly outwith the control of the company.

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

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

Liquidated damages clause.

The QUESTION NO: is pretty much a definition of a liquidated damages clause.

Explanation

There is no obligation to buy under a framework arrangement; and a framework can be used for consultancy services.

Explanation

This is the idea that negotiations can be of the sort which shares the (apple) pie, often aggressively and not 50/50 (win-lose); or it can seek to create additional value - expand the pie (win-win).

Explanation

Even if you don't know what 'Epistemological' means, you should know it's the odd one out.

It relates to the philosophical study of knowledge.

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.

Explanation

Managed.

This an old management adage, which is intended to encourage managers to measure helpful indica-tors (not everything!).

Explanation

Bidders compete against each other, reducing bid prices until one winner is found - this is the sub-mission of the lowest-priced bid (unless stated otherwise in the auction documentation).

Explanation

The answer is fixed costs. Their counterpart are variable costs, which do vary as business activity increases or decreases.

Direct and indirect costs are a different method of categorizing costs within an organisation.

Explanation

Probing.

Qualitative research enables a researcher to develop themes of interest, in more depth than simpler quantitative research.

Explanation

High level of power and a high level of interest.

You should hope that in your exam you get such an easy QUESTION NO: !