L5M3 Managing Contractual Risk Exam Questions

dumps2023-02-20T01:03:32+08:00

L5M3 Managing Contractual Risk is an advanced-level exam that tests the knowledge of individuals in various aspects of business, management, and leadership. The L5M3 exam questions are designed to challenge the candidates and assess their ability to apply the concepts they have learned in real-world scenarios. If you are planning to take the L5M3 exam, it is important to prepare thoroughly, and one of the best ways to do this is by reviewing and practicing the exam questions. Free Managing Contractual Risk L5M3 exam questions are below.

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1. A breach of representation by party A in a contract would allow party B to do what?

rescind the contract

claim damages

rescind the contract and claim damages

nothing - this is not a fundamental breach

2. What is a Prime Contract?

A contract between a buyer and main supplier

A contract between an end customer and a company which has full responsibility for its performance

A contract between a supplier and a subcontractor

A contract between a public sector organisation and the taxpayer

3. Mark is a consultant who works with building managers and advises them on how to make their buildings safer.

What type of insurance should Mark have?

Public Liability

Product Liability

Professional Indemnity

Property Insurance

4. Which of the following will you put into box 1?

anticipatory breach

fundamental breach

payment terms

specification

5. 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?

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

yes- a counter offer has been made

no- the clarification constitutes a conditional acceptance

no- a contract has not been signed

6. A contract term which is difficult to classify at the time of drafting a contract is known as?

condition

warranty

consideration

innominate

7. Service Credits are a form of what?

liquidated damages

indemnity

KPI

Consideration

8. Restitution Measures are an award which seeks to return the value of a benefit which has been seen to be unfairly received.

Which of the following statements about Restitution Measures is TRUE? Select TWO

restitution damages intend to return the innocent party to the position they were in be-fore the contract

restitution damages considers the position of the breaching party before the contract

restitution damages are based on how much was gained by the breaching party as a re-sult of the breach

restitution damages are not limited to pre-agreed levels stated in the contract

9. A warranty is a minor term of a contract. Is this TRUE?

yes- it does not affect the prime benefit

yes- it affects the prime benefit of the contract

no- a warranty is a fundamental term in a contract

no- a warranty is a type of innominate term

10. Parky Parks Ltd has a contract with Slides R Us for the provision of children's playground equipment. The contract contains a clause for liquidated damages and puts the figure at £500k.

Which of the following statements is correct? Select TWO

Liquidated damages needs to be a 100% accurate figure

If damages exceed £500k Parky Parks can apply to the courts to get Slides R Us to pay above this amount

Damages under the amount of £500k are not required to be paid to Parky Parks

liquidated damages is a genuine estimate of loss

costs incurred above £500k will be covered by Parky Parks Ltd

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11. 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?

Yes- this is a breach of a condition

Yes- this is a fundamental breach

no- the specification is not a contract document

no - there has been a breach in a warranty

12. R3D3 is a computer manufacturer who has had an issue with their supplier. They are seeking a conflict resolution approach which is flexible but will provide a binding and enforceable outcome. They would like the resolution to be confidential and directed by an independent third party that is appointed for them.

Which of the following would be the best conflict resolution for them to select?

mediation

arbitration

negotiation

litigation

13. Which of the following will you put into box 3?

Payment Term

Time is of the Essence

Subcontracting

Specification

14. Which of the following conflict resolution styles may involve a private caucus and a joint ses-sion?

mediation

adjudication

negotiation

litigation

15. An exchange of written documents between a buyer and supplier, each detailing their own Terms and Conditions is known as the Battle of the Forms.

Who generally wins the Battle?

The party who issued the first document

The party who issued the last document

The party with the greatest liability

The party who commits a breach

16. A failure to perform a provision of a contract which does not affect the end performance of the contract is known as what?

small breach

minor breach

major breach

warranty breach

17. Logan Gin Distillery is creating a contract for one of its new suppliers. It is a complicated item that they are ordering and if things go wrong, it would have an extremely negative impact on production, and therefore on revenue. However it is impossible to say what the cost of this would be if things were to go wrong.

What type of clause should be included in the contract?

liquidated damages

unliquidated damages

penalty clause

service credit

18. 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?

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

Balls FM have committed a fundamental breach of the contract

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

Subcontracting is never allowed in a contract unless specifically mentioned.

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

fundamental breach

condition breach

major breach

essence breach

20. Dianne has a loan agreement which contains a clause for default.

What does a clause for default imply?

this allows the lender to demand overdue payments are made straight away

this allows a lender to demand payment from a guarantor if the borrower is unable to pay

this allows the lender to declare insolvency

this allows the lender to demand full payment of the outstanding balance

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21. Which of the following will you put into box 4?

Payment Term

Time is of the Essence

Subcontracting

Specification

22. Which of the following will you put into box 1?

compete

avoid

compromise

collaborate

23. Which of the following will you put into box 7?

Condition

Warranty

Innominate Term

24. Franky B's is a popular restaurant chain which is seeking a resolution to a conflict it has with its supplier of Fried Chicken. It is looking for a dispute resolution that does not involve the court but in which an expert third party will make a binding decision.

Which is the most suitable dispute resolution method for Franky B's?

litigation

adjudication

conciliation

mediation

25. Which of the following conflict resolution styles involves a strict timeline and is commonly used within the construction industry?

conciliation

adjudication

arbitration

litigation

26. Which of these is NOT a stage in negotiation?

proposal

agreement

bargaining

adjourning

27. Which of the following would be included in a contract to assign costs and responsibilities be-tween buyer and seller when products are delivered?

Indemnity

Liquidated Damages

Liability

Incoterms

28. Which of the following are advantages to seeking a solution to conflict via litigation?

the process provides certainty that an outcome will be reached

There is no confidentiality

The decision can be made by someone who isn't an expert in their field.

The process is quick and cost-effective

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

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

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

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

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

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

30. Penguin Ltd has a contract with Blue Company. Blue Company has just broken a warranty in the contract.

What remedies does Penguin Ltd have available?

they can sue and claim damages

they can claim damages and terminate the contract

they can terminate the contract but cannot claim damages

they can claim damages but not terminate the contract

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31. Which of the following will you put into box 6?

Mediation

Arbitration

Litigation

Negotiation

32. 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?

move on to litigation

appeal the decision

nothing - the decision made by the adjudicator is binding

nothing - the decision made by the adjudicator is legally enforceable

33. Which TWO conflict resolution methods provide certainty of resolution?

adjudication and mediation

mediation and litigation

arbitration and conciliation

adjudication and litigation

34. Which of the following will you put into box 7?

Mediation

Arbitration

Litigation

Negotiation

35. Which of the following is not a form of ADR (Alternative Dispute Resolution)?

mediation

negotiation

arbitration

conciliation

36. 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?

yes- the offer was displayed and therefore must be honoured

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

no- the offer has been rescinded

no - the advert is an invitation to treat

L5M3 Managing Contractual Risk Exam Questions

L5M3 Managing Contractual Risk Exam Questions

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