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L5M3 Managing Contractual Risk Questions and Answers

Questions 4

Which of the following will you put into box 4?

Options:

A.

anticipatory breach

B.

fundamental breach

C.

payment terms

D.

specification

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Questions 5

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.

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Questions 6

Which of the following will you put into box 8?

Options:

A.

adjudication

B.

arbitration

C.

mediation

D.

litigation

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Questions 7

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

Options:

A.

negligence

B.

liability

C.

force majeure

D.

warranty

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Questions 8

Sally is shopping and sees an advert in a travel agent's window that says that flights to Malta are 50% off. She enters the shop and begins to speak to a travel agent who informs her that the poster she'd seen is out of date. Is the travel agent obliged to give Sally the discounted flight?

Options:

A.

yes- the offer was displayed and therefore must be honoured

B.

yes- the offer is valid until another offer or counter offer is provided

C.

no- the offer has been rescinded

D.

no - the advert is an invitation to treat

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Questions 9

George is a procurement manager at a manufacturing company and is reviewing a contract he has with a supplier. He notes that there are multiple appendices to the contract and there is no Precedence of Documents. What does this mean for the contract?

Options:

A.

all clauses are considered equal

B.

clauses in the contract take precedent over clauses in the appendices

C.

the clauses that come first in the document, take precedent

D.

the contract is not valid

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Questions 10

Which of the following will you put into box 1?

Options:

A.

compete

B.

avoid

C.

compromise

D.

collaborate

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Questions 11

Which of the following would constitute an offer? Select TWO:

Options:

A.

a display in a shop window

B.

an advert on a website

C.

an auction

D.

a bid on an auction

E.

a price proposal that is valid for 14 days

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Questions 12

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

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Questions 13

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?

Options:

A.

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

B.

Balls FM have committed a fundamental breach of the contract

C.

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

D.

Subcontracting is never allowed in a contract unless specifically mentioned.

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Questions 14

If an innocent party wishes to terminate a contract due to a breach, which of the following is true?

Options:

A.

only future obligations of the parties are excused and discharged

B.

all obligations of the innocent party are excused and discharged

C.

all obligations of the offending party are excused and discharged

D.

only past obligations of the parties are excused and discharged

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Questions 15

Which of the following will you put into box 5?

Options:

A.

liability

B.

payment terms

C.

liquidated damages

D.

Contract variation

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Questions 16

Which of these is NOT a stage in negotiation?

Options:

A.

proposal

B.

agreement

C.

bargaining

D.

adjourning

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Questions 17

Which of the following is usually the default method for resolving disputes?

Options:

A.

litigation

B.

mediation

C.

negotiation

D.

conciliation

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Questions 18

Jenny has received a written offer from a supplier. She emails them to clarify if they can do next day delivery. The supplier does not reply. The next day Jenny makes the payment. Has a contract been formed?

Options:

A.

yes- the supplier made an offer and Jenny accepted it by making a payment

B.

yes- a counter offer has been made

C.

no- the clarification constitutes a conditional acceptance

D.

no- a contract has not been signed

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Exam Code: L5M3
Exam Name: Managing Contractual Risk
Last Update: Dec 10, 2024
Questions: 120

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