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NEW QUESTION 20
John has signed a document with Larry that says that he will give Larry his car. Both John and Larry are over the age of 18 and are of sound mind. Larry accepts this offer and signs the document. Is this a contract?

• A. no- there is no consideration
• B. yes- it has been signed
• C. yes- both parties consent and have capacity to do so
• D. no- this document is an invitation to treat

Answer: A

Explanation:
No - There is no consideration. For a document to be considered a contract there must be consideration. This means something of value must be exchanged. In this example John gives Larry something but Larry doesn't give John anything. Therefore there is no consideration and this is not a contract. See p.12

NEW QUESTION 21
Lisa has a contract with an internet provider and the contract stated the need for Wi-Fi to be online 100% of the time. The Wi-Fi has only been available 97% of the time. In order for Lisa to claim compensation from her internet provider, which of the following would need to be present in the contract?

• A. liability clause
• B. change control
• C. service credits
• D. subcontracting

Answer: C

Explanation:
This would be service credits. If this is present and the contract stated 100% online access- Lisa could claim 3% of her money back. See p.112 for information on service credits

NEW QUESTION 22
Which of the following is not a form of ADR (Alternative Dispute Resolution)?

• A. mediation
• B. arbitration
• C. conciliation
• D. negotiation

Answer: D

Explanation:
Negotiation isn't an alternative dispute resolution because it's supposed to be the 'default' dispute resolution- the one you automatically do when a problem occurs. Only if negotiation fails should you turn to ADR. P. 142

NEW QUESTION 23
Sam is a factory manager and has purchased a new fixed asset on a loan purchase agreement. There is a forbearance agreement between the Factory and the provider. What does this mean?

• A. the lender is able to demand full payment of outstanding balances in case of none pay-ment
• B. the lender agrees to give the breaching party a period of time as an extension by which to meet their obligations
• C. the lender requires the buyer to assign a guarantor in case they cannot make payments
• D. the lender is able to charge interest on the purchase in line with RPI

Answer: B

Explanation:
1 is the correct answer. This is a direct quote from p. 104 of the study guide.

NEW QUESTION 24
What is the purpose of conflict resolution?

• A. to ensure all parties are happy with the outcome
• B. to create a binding solution to an issue
• C. to punish the party who breaks the contract
• D. to agree on a way forward

Answer: D

Explanation:
The purpose is 'to agree a way forward'. This is a direct quote from p.61. The other answers are incorrect- conflict resolution isn't always binding and sometimes not all parties are happy with the outcome. It certainly isn't about punishing about anyone (this is a common red herring option given in the exam)

NEW QUESTION 25
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