Mastering Contractual Risk: A Comprehensive Guide to Passing the CIPS Level 5 L5M3 Exam

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

2. What is a Prime Contract?

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?

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

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?

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

7. Service Credits are a form of what?

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

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

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

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?

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?

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

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

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?

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

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?

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?

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

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

What does a clause for default imply?

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

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

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

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?

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

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

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?

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

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

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?

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

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?

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

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

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

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?

37. 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?

38. Which of the following will you put into box 5?

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

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