L4M3 Chapter 1 Flashcards

Question

What is the definition of a Performance Specification?

Answer 1

A Performance Specification focuses on the outputs, not the inputs. This is often when the buying organization does not have subject matter expertise and leaves it to the supplier to dictate the inputs via their proposal.

Answer 2

A Conformance Specification focuses on the inputs and the outputs. i.e. buying organisation has expertise to dictate methods, processes, brands, part numbers etc.

Answer 3

Performance Specification enables the supplier to apply their expertise and inhibit innovation of solutions, driving added value.

Answer 4

Conformance Specifications enable the supplier to control the input and thus, outputs, ensuring consistency. However, it stifles supplier innovation, added value etc.

Answer 5

Multiple key technical stakeholders, who will add expertise and value to drafting. The buyer is expected to challenge these stakeholders to avoid bias and encourage engagement.

Answer 6

Purpose Perspective Scope Improvement and innovation Regulatory compliance and quality Type Relevance Performance Clarity Service conditions

Answer 7

You must expressly state the specification is a contract document by adding it to a schedule which is then expressly called out in the contract clauses.

Answer 8

A Performance Management Framework is a series of standard and targets the supplier must achieve and sets out corrective actions.

Answer 9

KPIs - what you are measuring Targets - To performance level to be achieved Consequences - What happens if target are not achieved

Answer 10

Measuring KPIs shows the buyer the following supplier relationship status: Stable Improving Declining

Answer 11

You must expressly state the PMA/ KPI is a contract document by adding it to a schedule which is then expressly called out in the contract clauses.

Answer 12

During the specification design stage, and issues with RfP invites/ briefs

Answer 13

Contractual terms, often called T&Cs

Answer 14

The terms are set out in detail Both parties agree to terms and intend to make them enforceable by law When either party has written down details of the terms and signed it

Answer 15

Implement a decision tree, process map and publish internally.

Answer 16

Contracts with a specified period of time until expiration i.e. not evergreen.

Answer 17

Articles - parties names, identification, how parties will referred to as i.e. 'The Client' and the basis of the contract i.e. the purpose of the contract is to provide goods or services. Recitals - sets out the facts and deliverables. This is where error lead to weakness in legal standings. Contract particulars (standard terms) - sets out the specific variables. Full terms and conditions - correct reference to support schedule needed here to legally enforce them. Schedules - document based on negotiation between parties setting out the specific project details. i.e. pricing, KPIs etc

Answer 18

Power of the purchaser to influence commercial negotiation. Also known as Buyer Power

Answer 19

You must expressly state the Schedule in a contract document by referencing the Schedule as an Express clause.

Answer 20

No. Contract must expressly state whether this is possible and advise of the process. i.e. Who can request, who can autorise, who can accept and the mechanism i.e. by email or post.

Answer 21

Offer Acceptance Consideration Intention to be legally bound Capacity to contract

Answer 22

Statues and regulation

Answer 23

Previous legal cases with support of statutes and regulation

Answer 24

When a relevant case comes to court. When governing authorities choose to change the law by statute, officially terminating the previous rules.

Answer 25

A written law passed by a legislative body

Answer 26

A statement of what the offeror is willing to provide and the terms they are willing to provide it with

Answer 27

Invitation to treat – Where the supplier can discuss willingness to make an offer but has not discuss the terms for doing so yet. I.e., a tender if an invitation to treat as the buyers is discussing their willingness to make a deal but the tender and its documents do not act as the terms to offer. Another example is where a product is on display as an invitation, however, an offer doesn’t exist as the seller can refuse to sell. Declaration of intention – where an offer was intentional, however, later declined. i.e., an auction house advertising a product for sale, but cancel event thereby declining to offer. A mere puff (or boast) – Anything not intended to be taken literally. i.e., an exaggerated TV ad which isn’t true. A silly statement that a soft drink can make you stronger etc. Provision of information – i.e., a plaintiff requests the price of a product, which supplier confirm back price only. This is not an offer to sell. This is just provision of information.

Answer 28

Where a court orders a defendant to complete the obligation of a contract, sometimes in support of financial fine. This is so companies cannot get away with simply paying the fine.

Answer 29

Withdrawal, also known as revocation Lapse Death Rejection including counteroffer Failure of conditionality Acceptance

Answer 30

Can only occur if the offer is still open It must be absolute and not conditional It cannot be made by someone with diminished capacity

Answer 31

No. Letter of Intent only shows intention. Tradition of the construction industry using letter of intents as acceptance of offers is a hot debate

Answer 32

No. An offer can only be made whilst an offer is open

Answer 33

No. An acceptance of an offer can be implied too. For example, is a supplier send a purchaser goods they never asked for, but the purchaser then uses them, an implied acceptance has occurred. This is also known as acceptance by performance.

Answer 34

No. acceptance cannot take place if supplier is silent about an offer. For example, a buyer cannot send money to a supplier and assume title of goods if supplier stays silent. If a cheque was sent and supplier cashed it, however, that would be the acceptance.

Answer 35

The seller can write into contract that it does not need to communicate acceptance i.e. contracts state call offs with automatically be accepted Mail box rule. If buyer can provide acceptance via letter was sent then supplier does not need to communicate acceptance

Answer 36

The Vienna Convention for the International Sales of Goods. Note, it does not cover services. Is forms part of UNCITRAL.

Answer 37

Both parties should expressly state in any contract what merits an offer & acceptance via a deemed receipt with assumptions made

Answer 38

The bargain of one thing in exchange for another Consideration must have a value Cannot be vague Must be specific Can trade goods for goods/ services for services Cannot be for an something already done, or an existing duty

Answer 39

The act enables third party's to enact the contract even though they are no directly party to it. They do not have automatic rights. The contracting parties must expressly state they offer 3rd party rights. In the UK, it is common for contracts to expressly state 3rd party rights do not exists anyway to avoid confusion.

Answer 40

Give third party's the right by express terms

Answer 41

No. it is uncommon due to the risk is poses the direct parties.

Answer 42

Agreement under which a subcontractor guarantees to a third party (purchaser) that it shall fulfil its obligation under contract. This is only legally binding if issued as a Deed

Answer 43

If subcontractor does something wrong, purchaser can claim via the contractor as standard, however, if the contractor went bust, then under standard contracts purchaser cannot claim against sub contractor. Remember, third party rights are not likely (are not automatic by UK law) to exist in the contractor and subcontractor contract to the benefit of purchaser. Collateral Warranty's ensure that Purchaser can claim against sub contractor in any event. If subcontractor goes bust, purchaser would claim against contractor as contractor is responsible.

Answer 44

Collateral warranty must expressly state that it is a deed to be legally binding. A deed is needed because there is no consideration between purchaser and sub contractor. With out a deed, the lack of consideration, would not support a claim.

Answer 45

Create a deed and expressly state it is a deed!

Answer 46

Infants/ those under the age of 18 Sufferer of mental health Someone under the influence of drugs and alcohol

Answer 47

No. Person without capacity is no longer obligated, however, organisation signing it is still obligated.

Answer 48

No. Even if an employee was drunk when signing a contract, the organization is still legally bound.

Answer 49

Legal capacity or legal competency

Answer 50

When a company is limited to what they can commit to through legal law. Also known as Beyond Powers. More prevalent in public sector organizations. I.e. if a company is limited to what it can commit itself too by law, any contract is signs could become redundant. Restrictions are set by acts of parliament. i.e. Ultra Vires on the NHS.

Answer 51

Legal document creating a commercial company and setting out its purpose.

Answer 52

When a formal contract does not exist expressly stating the contract will supersede/ take precedent over any other terms, meaning petty exchange of quote, purchase order, delivery note take precedent over the next. The last parties terms across the fence become legally binding. Each new document is a counteroffer of the previous so acts as a rejection and so on.

Answer 53

Yes. but not when implied terms are based on statute/ regulation. Then implied terms take precedent.

Answer 54

When a contract dispute goes to court due to the use of contract language being unclear, Rules of Interpretation will be applied as a guide to what the contract should mean

Answer 55

The original will take precedent and the court will rule that not enough care and attention was given so it should no stand.

Answer 56

Yes, but hard to evidence. this often leads to battle of the forms because no ones knows if an agreement exists orally

Answer 57

States who have signed the CISG under the United Nations Commission of International Trade Law (UNCITRAL)

Answer 58

To create uniformed frameworks to help govern international transactions. It’s intended to create a uniformed framework by setting a common law to follow rather than the multiple local laws for different countries.

Answer 59

‘Good faith’ cannot be accurately defined or measured. Lack of time to review proposal Lack of interest in the business community Threat of London losing its position in international litigation

Answer 60

It covers goods, not services – it does cover goods made to specification of the buyer It covers B2b sales but not public sectors. It also doesn’t cover B2C It only applies when both contracting parties are based in different countries Contract states can expressly state which parts do not apply to them Contract state can expressly state which region it does not apply to. i.e., Hong Kong for China At contract level parties of a contract can expressly state exclusions of the convention/ treaty In short, all CISG laws automatically apply in contracting states unless they or contracting parties expressly state exclusions. i.e., an exclusion could be that local laws of China are precedent over CISG

Answer 61

Distribution agreement – as these are agreement for transport and not the transfer of goods Where payment is not money – i.e., trades for goods for services or more goods Framework agreement – as they are not contract/ agreements on their own Franchise Agreements Sales of ships or aircraft Electricity (although it does apply to gas) Anything sold at auction

Answer 62

Yes, to not make it automatic, you must expressly states which parts of CISG should not apply in your contract

Answer 63

Chamber of Commerce published terms covering the allocation of risk between buyer and seller

Answer 64

False statement of fact which encouraged a party to contract

Answer 65

Statement must be made Statement must relate to fact Statement must be false Statement must be made by a contracting party Statement must induce the contract – statement must have direct influence over a party’s willingness to contract

Answer 66

3 in total: Fraudulent Negligent Innocent

Answer 67

Rescission of contract – remedy that see both parties return to their pre contract state Damages In the case of Fraudulent and Negligence, the court may award both Rescission and Damages. In the case of innocent, only one or the other.

Answer 68

One off purchase Complex one off

Answer 69

Framework arrangements, otherwise known as approved supplier lists, have no legal standing, do not guarantee work to supplier nor guarantee them terms for a transaction. It is not a legal contract because there is no consideration. Mini competitions are often ran using that specific supplier base

Answer 70

A direct call off. Focused on the purchased rather than a term.

Answer 71

A term contract which exists for a fixed period. They are used where purchaser has a regular demand for goods or services where they want to be provided by a single supplier. i.e., elevator maintenance and repair, stationery. Focused on the term, not the purchase.

Answer 72

General Agreement on Tariffs and Trade. International agreement regulating barriers to international trade i.e., tariffs and only applies to goods

Answer 73

General Agreement on Tariffs and Trade in Services. International agreement regulating barriers to international trade i.e., tariffs. Only applies to services.

Answer 74

No, because there is transfer of ownership there is no ‘sale. Because there is no sale, no regulation or similar applying to sale of goods applies. i.e., UK sales of goods act or Vienna convention CISG

Answer 75

Where an asset is hired/ leased for a period of time with the intention of a transfer of ownership through purchase. In legal terms, it starts as a hire contract and become a purchase contract. i.e., sale of goods to usual regulation around sales of goods would then apply. Example, is PCP car lease I have.