CIPS Level 4 Diploma in Procurement and Supply L4M7 Question # 46 Topic 5 Discussion
L4M7 Exam Topic 5 Question 46 Discussion:
Question #: 46
Topic #: 5
Contracts for hire is a method for renting an item from a business that exists to provide items for use from time to time. A contract for hire has which of the following features?
A.
Ownership of the item transfers to the person hiring the item at the end of the agreed hire period
B.
The person hiring the item contracts to use the item for a stated period, at an agreed rate per period, on agreed terms
C.
At the end of the hire period, the person hiring the item keeps possession and lends to other customers
D.
A contract for hire is an agreement for the person hiring out the item to sell it to the person hiring the item
A contract for hire allows the hirer to use the item for an agreed period and rate, without ownership transferring. This option provides flexibility and avoids the financial commitment of ownership, aligning with whole-life asset management when short-term use or flexibility is more beneficial than purchase.
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