L5M3 Managing Contractual Risk Paper *2

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?

"Payment to a supplier facilitates.., which ONE of the elements of a legally binding contract?"

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?

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

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?

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?

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)?

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

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?

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

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?

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

Which of the following are recognised conflict resolution approaches? Select THREE 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 of the following are characteristics of liquidated damages within a contract?

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 a contractual dispute arises, an appropriate first step to resolve the issue should be negotiation between the parties. Is this correct?

Which of the following methods of contractual protection may be suitable for the parties who their liabilities have not been limited?

Which of the following conflict resolution approaches involves the use of a third party expert whose judgement becoming bin ding on the conflicting parties?

When a conflict arises between the two parties in a contract, litigation can be used as a way of resolving the conflict between the parties? Is this statement correct?