L5M10 paper 3

@A counter-offer is treated as a rejection of the initial offer. Is this statement correct?

@The use of third-party subcontractor is allowed in a contract between the parties. Is this statement correct?

@Which of the following options does the innocent party have in the event of a major breach of contract?

@Which of the following factors must the courts consider before awarding damages to the innocent party in case of a breach of contract?

@BAMT Limited has been contracted in the building of a high school which needs to have a capacity of 10 000 students completed. The project has tight completion schedules which BAMT Limited has to comply with. As the project continues, BAMT Limited realise that there is a need to subcontract due to the need of some special and technical skills arising which they do not have the capacity to fulfil. BAMT Limited immediately decides to find a subcontractor to carry out these special activities? Is this the right approach?

@Which of the following are ways in which a contract between two parties can be terminated? Select the THREE that apply.

@Which of the following are characteristics of liquidated damages within a contract?

@An indemnity clause is suitable to be used under which of the following circumstances? Select the TWO that apply.

@Which of the following is the main disadvantage of using liquidated damages as a method for compensation of breach?

@Which of the following are recognised approaches to resolve a breach of contract?

@Which payment mechanism is perceived as more risky to the buying organisation?

@A large manufacturing company has begun a project to increase the size of its premises. The procurement team has estimated that if the main supplier fails to complete the project on schedule it will incur costs and loses of $20,000 per day for every day there is a delay. Which of the following clauses should the large manufacturer use in the contract with the supplier?

@Perfect Constructions Limited has been contracted by a procurement organisation to complete a construction of some apartments to be used for accommodation. Before the contract was signed, PCL was required by the procurement organization to provide a written promise to take responsibility for any faults or costs that might be incurred if any unsatisfactory performance is identified? Which of the following was used by the procurement organisation to reduce the risk of poor performance from PLC?

@It is important to include a contract variation clause in every long-term contract. Is this statement TRUE?

@In a contract between two parties, consideration must have which of the following to meet its sufficiency requirements?

@A risk management strategy by transferring a risk to a third party is known as which ONE of the following?

@Which of the following are the benefits of using negotiation to as a means of conflict resolution between the parties? Select the TWO that apply.

@When assessing the amount of damages to be awarded to an injured party, it is always important for the courts to consider the amount of work already performed by the defaulting party. Is this statement correct?

@. Major Factories Organisation (MFO) is a world leading shoe manufacturer. The produce a wide range of fashion shoes, others made from cloth and others from leather. They procure the two different raw materials from suppliers in different countries, cloth from United States and leather from Pakistan. SELL IT Limited (SIL) is a South African based shoe retailer buying a range of shoes from MFO to resell to customers around South Africa. They have placed an order of 10 000 leather shoes which MFO has accepted and promised to fulfil in 3 months time. Soon after the contract was agreed, wars broke up in Pakistan which lead to many factories being affected and supplier ceasing to export raw materials. This affected MFO’s ability to fulfil its contract with SIL. MFO communicated to SIL that they will be unable to fulfil the contract. This is an example of which ONE of the following?

@Payment of supplier facilitates which of ONE of the elements of a legally binding contract?

@Which of the following are recognised conflict resolution approaches? Select THREE that apply.

@Which of the following is the option available to the innocent party in the event of a minor breach?

@Which of the following are examples of the losses that cannot be indemnified in a contract between the buyer and supplier?

@MAKE IT Manufacturers is one of the world’s leading manufacturing companies in France. They procure large quantities of raw materials from suppliers to use in the manufacturing operations. They collaborate with their suppliers by obtaining raw materials, check defects and ensure quality before they can make payments to their suppliers. This is an example of which type of payment mechanism?

@Regional Social Housing (RSH) is a public body which operates within a strictly regulated environment. It is under close public scrutiny in terms of how it manages its finances. It has a contract in place with a facilities management provider (FM). It is a five year contract and year two has just commenced. Within its regulations RSH is allowed to make some changes to contracts once awarded. There has been a recent change in safeguarding legislation which has necessitated a change in the contract. An initial meeting has taken place between RSH and the supplier. Which of the following are required to enable the change to go ahead (assume RSH can make this change within the procurement regulations)?