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CIPS L5M3 Practice Exams Questions

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CIPS Managing Contractual Risk Sample Questions (Q69-Q74):

NEW QUESTION # 69
Which of the following will you put into box 2?

• A. Payment Term
• B. Time is of the Essence
• C. Specification
• D. Subcontracting

Answer: A

Explanation:
The correct answers are as follows:

This is payment terms. The scenario mentions processing invoices, which is to do with paying the supplier

NEW QUESTION # 70
A warranty is a minor term of a contract. Is this TRUE?

• A. yes- it affects the prime benefit of the contract
• B. no- a warranty is a type of innominate term
• C. yes- it does not affect the prime benefit
• D. no- a warranty is a fundamental term in a contract

Answer: C

Explanation:
The correct answer is 1. The statement is True so the answer needs to start with 'yes'. Therefore options 3 and 4 should be discounted. Option 2 is incorrect a warranty does NOT affect the prime benefit of the contract. See p. 126 for more details on Contractual Warranties and Conditions

NEW QUESTION # 71
What is the name given to a term in a contract where one party promises to compensate the other party for a trigger event?

• A. warranty
• B. liability
• C. indemnity
• D. damages

Answer: C

Explanation:
Indemnity- this is the definition given on p. 20

NEW QUESTION # 72
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 She enters the shop and begins to speak to a travel agent who informs her that the poster she'd seen is out of date.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?

• A. yes- the offer is valid until another offer or counter offer is provided
• B. no- the offer has been rescinded
• C. no - the advert is an invitation to treat
• D. yes- the offer was displayed and therefore must be honoured

Answer: C

Explanation:
Adverts are invitations to treat - not offers. Therefore the travel agent isn't bound to provide the discounted flight. See p.3 for more information on offers and ITTs

NEW QUESTION # 73
If an innocent party wishes to terminate a contract due to a breach, which of the following is true?

• A. all obligations of the innocent party are excused and discharged
• B. only future obligations of the parties are excused and discharged
• C. all obligations of the offending party are excused and discharged
• D. only past obligations of the parties are excused and discharged

Answer: B

Explanation:
The correct answer is "only future obligations of the parties are excused and discharged" - all cur-rent and past obligations need to be fulfilled, or remedied (e.g. through liquidated damages). When an innocent party terminates a contract, they are still obliged to fulfil their own obligations. P.47

NEW QUESTION # 74
......

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