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CIPS Managing Contractual Risk Sample Questions (Q84-Q89):
NEW QUESTION # 84
Alan has an ongoing contract with a supplier for the provision of gardening tools to his horti-culture business. He has been working with the supplier for over 20 years and has recently discovered that the supplier committed a breach in a warranty 3 years ago. Can Alan claim damages?
- A. no- Alan cannot claim because the breach was so long ago
- B. yes- Alan can claim damages and rescind the contract
- C. no- Alan could only claim if the breach was of a condition, not a warranty
- D. yes- the breach has occurred and a contract is in place
Answer: D
Explanation:
"Yes- A Breach has occurred and a contract is in place" - this is the correct answer. Claims against warranties can be made up to six years from the date the contract is breached. Option 2 isn't correct as a breach in warranty does not allow you to rescind the contract. Options 3 and 4 are incorrect because Alan CAN claim damages. There's a useful table about warranties and conditions on p. 127
NEW QUESTION # 85
If a party is to 'repudiate' a contract, what does this mean?
- A. the party indicates they no longer intend to fulfil their contractual obligations, usually in response to a breach
- B. the party is cancelling the contract as it is no longer needed
- C. the party is using the break-clause to end the contract
- D. the party gives notice that they anticipate that they will not be able to fulfil their future obligations
Answer: A
Explanation:
"the party indicates they no longer intend to fulfil their contractual obligations, usually in response to a breach". This is the definition of 'repudiate' given on p. 128 Before the exam check you understand the difference between repudiate, rescind and revoke. These are all ways contracts can end but are slightly different.
NEW QUESTION # 86
A large financial organisation ensures that they have contracts with all of their suppliers. In which instance would indemnity not necessarily form part of the contract?
- A. A confidentiality agreement
- B. A software licence agreement
- C. A Deed of Appointment of a Consultant
- D. In assignment of intellectual property rights
Answer: A
Explanation:
Indemnity isn't usually used for confidentiality agreements - this is stated on p.21 of the study guide. This is because it's hard to indemnify against- you don't know what the consequence of a breach of confidentiality is going to be so it's hard to quantify. Unliquidated damages is more suitable. The study guide does state that indemnity is frequently used in intellectual property rights, software licence agreements and share purchase agreements. This is also written on p. 21.
NEW QUESTION # 87
Which of these is NOT a stage in negotiation?
- A. bargaining
- B. adjourning
- C. agreement
- D. proposal
Answer: B
Explanation:
Adjourning is not a stage. The 6 stages of negotiation are; preparation, opening, discussion, pro-posal, bargaining and agreement. P.64
NEW QUESTION # 88
Which of the following will you put into box 6?
- A. litigation
- B. mediation
- C. adjudication
- D. arbitration
Answer: B
Explanation:
The correct answers are as follows:
This is mediation because 1) it's private and 2) there's a third party present
NEW QUESTION # 89
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