L5M3 by CIPS Actual Free Exam Questions And Answers

Question 1

Which of the following would not be considered a contract? Select TWO

A. A written agreement between two robbers to rob a bank which states that the money gained would be split evenly between the two.

B. an email chain between a buyer and supplier which includes a PO and Invoice

C. a written document in which Paul agrees to clean Freda's house for £10

D. a phone call between a supplier and buyer in which the buyer agrees to purchase 100 teddy bears from the supplier for £100.

E. a domestic agreement between two parents about who will pick the kids up from school

Discussion 0

Correct Answer: A,E Vote an answer

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Question 2

Which of the following will you put into box 7?

A. Negotiation

B. Mediation

C. Litigation

D. Arbitration

Discussion 0

Correct Answer: D Vote an answer

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Question 3

ABC has a contract with its supplier DEF who delivers pasta to ABC's manufacturing plant. DEF has committed a breach and conflict resolution has taken place. The Court has awarded ABC 'specific performance' damages. What could this involve?

A. DEF must deliver the pasta required by ABC

B. DEF must pay money to ABC as stated in the liquidated damages clause

C. DEF must rescind the contract

D. DEF must pay an amount of money as determined by the courts

Discussion 0

Correct Answer: A Vote an answer

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Question 4

GoGo Ltd has contracted Reny Manufacturing to produce a bespoke piece of equipment for them. It is an asset and costs a significant amount of money. A contract is drawn up which states that GoGo Ltd has the right to terminate the contract at any time for any reason. Halfway through production of the asset, GoGo Ltd calls Reny Manufacturing to cancel the order. Reny Manufacturing has incurred many costs already. Can GoGo Ltd cancel the order?

A. yes- the order has not yet been delivered meaning that GoGo Ltd can cancel- there has been no transfer of ownership

B. no- Reny Manufacturing will sue for damages

C. yes- there is a termination clause in the contract

D. no- the termination clause is unfair

Discussion 0

Correct Answer: C Vote an answer

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Question 5

Which TWO conflict resolution methods provide certainty of resolution?

A. mediation and litigation

B. arbitration and conciliation

C. adjudication and mediation

D. adjudication and litigation

Discussion 0

Correct Answer: D Vote an answer

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Question 6

What is the name given to a term in a contract where one party promises to compensate the other party for a trigger event?

A. damages

B. indemnity

C. liability

D. warranty

Discussion 0

Correct Answer: B Vote an answer

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Question 7

Which of the following will you put into box 6?

A. payment terms

B. liquidated damages

C. Contract variation

D. liability

Discussion 0

Correct Answer: B Vote an answer

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Question 8

What is a boilerplate clause?

A. a type of warranty

B. the clause that will take precedent if there are conflicting pieces of information within a contract

C. a set of clauses that are commercially standard and expected in all contracts

D. a clause that allows the contract to be modified if both parties are in agreement

Discussion 0

Correct Answer: C Vote an answer

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Question 9

Derrek owns a factory and employs a Facilities Management Company called Balls FM to look after certain aspects of the factory including cleaning and testing the machinery to ensure they are in good working condition. One day he realises that one of the cleaners doesn't work for Balls FM, he works for another company called Bells FM. Which of the following statements regarding subcontracting is true?

A. Subcontracting would be if Derrek delegated responsibility for managing the contract to a member of his team

B. It is okay for Balls FM to subcontract out part of the contract to Bells FM if they are unable to fulfil their obligations

C. Subcontracting is never allowed in a contract unless specifically mentioned.

D. Balls FM have committed a fundamental breach of the contract

Discussion 0

Correct Answer: B Vote an answer

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CIPS Managing Contractual Risk - L5M3 Exam Practice Test

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