CIPS L4m3 Commercial Contracting · Free Practice Question Easy
Question 6
Under a framework agreement, which of the following is required to legally bind the supplier?
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A
A letter of intent
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B
A formal handshake
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C
A verbal agreement
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D
A purchase order
Reveal correct answer
Correct answer: D
Explanation
The correct answer is: A purchase order.
Under a framework agreement, a purchase order is typically required to legally bind the supplier. This is because a purchase order is a formal document issued by a buyer to a seller, detailing the products, quantities, and agreed prices for products or services. It serves as a legally binding contract once the seller accepts it. Verbal agreements, formal handshakes, and letters of intent may express the intention to form a contract but are not legally binding in the same way a purchase order is.
Reference: CIPS L4M3 study guide page 65-66 / The new syllabus 2024
LO 1, AC 1.3
Discussion
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