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NEW QUESTION 37
A breach which is so severe that it goes to the root of the contract is known as what?

• A. condition breach
• B. essence breach
• C. major breach
• D. fundamental breach

Answer: D

Explanation:
This is a Fundamental Breach. Fundamental Breach and Major Breach are very similar- they're both really bad and can lead to damages and the termination of the contract. The difference is that a Fundamental Breach is so bad that it goes to the root of the contract - a breach so bad that the contract is basically worthless. For example if you make a contract with a supplier to have potatoes delivered but it turns out they don't sell potatoes, only apples, and they keep sending you apples instead of potatoes. This would be a fundamental breach because its something so fundamental to the contract that there's no point in the contract existing if there's a breach like this. Condition Breach and Essence Breach are made up words- they don't exist. P.44

NEW QUESTION 38
Which of the following will you put into box 7?

• A. Litigation
• B. Arbitration
• C. Negotiation
• D. Mediation

Answer: B

Explanation:
The correct answers are as follows:

Arbitration - this is a binding resolution made by a third party. This answer could be litigation, but that option has been taken by box 6 and you can only use the answers once. Mediation would not be a binding resolution and negotiation doesn't involve a third party.

NEW QUESTION 39
Which of the following are a suitable course of action to take in the event of a minor breach of a contract? Select TWO

• A. adjudication
• B. litigation
• C. liquidated damages
• D. collaboration
• E. progress meetings

Answer: D,E

Explanation:
In the event of a minor breach, CIPS says it is best to work with the defaulting party by conducting progress meetings and collaboration. This is on p. 50 of the study guide

NEW QUESTION 40
When assessing damages caused by a breach, which of the following statements is true?

• A. damages are limited to what is stated within the contract
• B. damages can be difficult to assess before a breach has occurred and therefore should be decided through conflict resolution
• C. damages attempt to compensate the innocent party for errors made by the offending party
• D. damages attempt to position the innocent party in the position that they would have been in had the contract been performed as expected

Answer: D

Explanation:
The correct answer is: 'damages attempt to position the innocent party in the position that they would have been had the contract been performed as expected'. This is a quote from p. 121 Option1 is incorrect as unliquidated damages aren't stated in a contract. Option 2 is incorrect because liquidated damages are an assessment of damages before a breach. Option 4 is incorrect because not all breaches are caused by errors (they can be caused by negligence or the offending party withholding something).

NEW QUESTION 41
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