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L5M3 Managing Contractual Risk Paper *7.
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1.
Which of the following are examples of an invitation to treat?
- Asking one party to pay a certain amount for an enhanced product
- Displaying goods with a price tag on a supermarket display
- Asking for a price reduction on a product perceived as old
- Advertising a newly manufactured product to stimulate demand
2.
A buyer has not been managing contract delivery since the agreement was created a year ago. The supplier has not been delivering what was required, although the procurement organization has been paying its monthly invoices for the last year. In all likelihood, the courts would regard this as ….
3.
Which payment mechanism is perceived as more risky to the buying organization?
4.
A counter offer is treated as a rejection of the initial offer. Is this statement correct
5.
The use of third party subcontractor is allowed in a contract between the parties. Is this statement correct?
6.
Specific performance is always a legal right for the buyer in the event of supplier breach of contract.Is this correct.
7.
A loss that cannot be easily linked to the risk event is known as which of the following
8.
Which of the following methods can be used by the courts to assess the damages in the event of breach of contract? Select TWO that apply
9.
Which of the following are the factors that may be considered by the parties regarding the conflict resolution to select?
- Cost
- Power
- Privacy
- Competition
10.
Which of the following are the legitimate reasons why a contract could legally come to an end before its original agreed term? Select TWO that apply.
11.
Where a subsidiary company is bidding for a contract but it has a poor credit rating, the procurement organisation could obtain which of the following from the parent company to reduce the risk?
12.
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 itwill incur costs and losses 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?
13.
A buyer has not been managing contract delivery since the agreement was created a year ago. The supplier has not been delivering what was required, although the procurement organisation has been paying its monthly invoices for the last year. In all likelihood, the courts would regard this situation as...
14.
Which of the following will terminate an offer?
- Acceptance
- Consideration
- Revocation
- Intention
15.
A buyer is seeking to include a clear performance procedures clause within the contract to act as a lever to encourage the supplier to focus on achieving the stated performance measures. Should they consider using a clause applying service credits?
16.
Specific performance is always a legal right for the buyer in the event of a supplier breach of contract. Is this correct?
17.
Which of the following are recognised conflict resolution approaches? Select THREE that apply.
18.
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)?
- Contract variation clause
- Indemnity from FM's parent
- Agreement of all parties
- Assessment of unliquidated damages
19.
In relation to contract formation, completion of both offer and acceptance constitutes which of the following?
20.
A large financial services organisation (FSO) is entering into a long-term contract with a supplier for the provision of information technology (hardware, software and support). The FSO anticipates that there will be a need for the contract to change from time to time during its term. To facilitate this, which type of clause should be included within the contract when it is set up?
21.
Which of the following are contractual financial remedies relating to either non- or under-performance of a supplier?
- Liquidated damages
- Payment terms
- Service credits
- Termination clauses
22.
Which of the following are recognised approaches for attempting to resolve a breach of contract?
- Liquidation
- Consideration
- Mediation
- Arbitration
23.
When a contractual dispute arises, an appropriate first step to resolve the issue should be a negotiation between the parties. Is this correct?
24.
Liquidates damages are used within a contract to exclude liability for specific events which are outside the control of the contracting parties. Is this correct?
25.
Which of the following are legitimate reasons why a contract could legally come to an end before its original agreed term? Select TWO that apply.
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