Winter Sale Limited Time 60% Discount Offer - Ends in 0d 00h 00m 00s - Coupon code: wrap60

CIPS L5M3 Dumps

Page: 1 / 12
Total 120 questions

Managing Contractual Risk Questions and Answers

Question 1

What is the purpose of conflict resolution?

Options:

A.

to create a binding solution to an issue

B.

to agree on a way forward

C.

to ensure all parties are happy with the outcome

D.

to punish the party who breaks the contract

Question 2

Robert has a contract with Farmer Ted who provides his manufacturing firm with potatoes. There is a contract in place, signed by both parties that Ted will deliver 2 tonnes of potatoes per week. Due to changes in demand, Robert would like Ted to start providing 3 tonnes of potatoes every three weeks. What must be in place for this change to occur?

Options:

A.

a variation clause and a new liquidated damage fee

B.

a variation clause and a signed agreement by both parties

C.

a notification of change and adequate compensation

D.

a notification of change and indemnity

Question 3

Which of the following situations would be considered a minor breach of a contract? Select TWO:

Options:

A.

a painter is contracted to paint a room white but paints it magnolia as there was no white paint available

B.

a consultant has given bad advice

C.

a zoo orders three baby lions and is given three baby tigers

D.

a supplier has breached a non-disclosure agreement

E.

A supplier delivers a lorry-load of produce six hours late due to a burst tyre.

Question 4

Kranky Kat Ltd has just been through an adjudication process with a supplier it worked with who committed a breach in the contract. Kranky Kat is not happy with the outcome of the adjudication, what can Kranky Kat do?

Options:

A.

move on to litigation

B.

appeal the decision

C.

nothing - the decision made by the adjudicator is binding

D.

nothing - the decision made by the adjudicator is legally enforceable

Question 5

Which of these statements about mediation is true? Select TWO

Options:

A.

mediation is flexible

B.

mediation produces legal precedents

C.

mediation can be used as a stalling tactic

D.

mediation is expensive

E.

mediation involves a third party who makes a judgement on the issue

Question 6

What is the purpose of a liability clause in a contract?

Options:

A.

to limit commercial and financial exposure

B.

to punish the supplier for poor performance

C.

to ensure adherence to legal standards

D.

to give an approximate pre-determined value of loss

Question 7

Which of the following will you put into box 1?

Options:

A.

subcontracting

B.

reputational damage

C.

penalty clause

D.

consequential loss

Question 8

A breach which is so severe that it goes to the root of the contract is known as what?

Options:

A.

fundamental breach

B.

condition breach

C.

major breach

D.

essence breach

Question 9

Which of the following is a source of breach in a contract?

Options:

A.

negligence

B.

liability

C.

force majeure

D.

warranty

Question 10

A buyer and supplier have a contract and the supplier has committed a major breach. However, as they are the sole supplier to the buyer, the buyer has decided not to terminate the contract and instead to work with the supplier to remedy the situation. What is this called?

Options:

A.

affirmation of the contract

B.

conflict resolution

C.

awarding damages

D.

assigning liability

Question 11

Which of the following statements about 'Specific Performance' are TRUE? Select TWO.

Options:

A.

Orders for Specific Performance can be a lengthy and costly process

B.

Orders for Specific Performance can be a cheap and quick way to remedy a breach in contract

C.

If a party is ordered to complete a 'Specific Performance' and doesn't, they can be ar-rested

D.

The innocent party must mitigate all losses

Question 12

Which of the following will you put into box 8?

Options:

A.

adjudication

B.

arbitration

C.

mediation

D.

litigation

Question 13

Kelly and Chloe have a contract in which Kelly provides MRO supplies to Chloe's manufac-turing business. Kelly has committed a fundamental breach but Chloe has not suffered any loss. Chloe has chosen to terminate the contract. Can she claim damages?

Options:

A.

yes- Chloe can claim liquidated damages if these are stated in the contract

B.

yes- Chloe can claim unliquidated damages as the contract is terminating

C.

no- Chloe cannot claim damages as she has not incurred a loss

D.

no - Chloe cannot claim damages as she decided to terminate the contract

Question 14

Fishfingers Ltd has a contract with a supplier of cod. When the contract was set up it was not known how important specific delivery times would be for the arrival of the fish. After several months it has now become apparent that delivering the fish within 3 hours of them being caught is fundamental to the contract as delayed delivery results in poorer quality Fish Fingers. When the contract was set up what was the delivery times?

Options:

A.

a condition of the contract

B.

a warranty

C.

an innominate term

D.

a time is of the essence clause

Question 15

Popsi Cula is a manufacturer of sugared beverages and produces over 5000 tonnes of soda each day. It is extremely important that ingredients are delivered to the factory on specific days in order for the production to keep to its very tight schedule. Popsi Cula is onboarding a new supplier - which of the following clauses would it be important for the contract to contain?

Options:

A.

liquidated damages

B.

limitation of liability

C.

time is of the essence

D.

KPIs

Question 16

Sam is a factory manager and has purchased a new fixed asset on a loan purchase agreement. There is a forbearance agreement between the Factory and the provider. What does this mean?

Options:

A.

the lender agrees to give the breaching party a period of time as an extension by which to meet their obligations

B.

the lender requires the buyer to assign a guarantor in case they cannot make payments

C.

the lender is able to demand full payment of outstanding balances in case of none pay-ment

D.

the lender is able to charge interest on the purchase in line with RPI

Question 17

Sarah is a baker and orders free-range eggs from a local supplier which she uses to make cakes. There is a contract in place which included a specification that states that the eggs must be free-range. One day the supplier delivers eggs which Sarah uses in the cakes. Later she dis-covered that these were not free-range. Sarah believes that the supplier has broken the con-tract. Is this true?

Options:

A.

Yes- this is a breach of a condition

B.

Yes- this is a fundamental breach

C.

no- the specification is not a contract document

D.

no - there has been a breach in a warranty

Question 18

Which of the following will you put into box 1?

Options:

A.

compete

B.

avoid

C.

compromise

D.

collaborate

Page: 1 / 12
Total 120 questions