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CIPS Managing Contractual Risk Sample Questions (Q103-Q108):

NEW QUESTION # 103
Which of the following is usually the default method for resolving disputes?

  • A. conciliation
  • B. mediation
  • C. litigation
  • D. negotiation

Answer: D

Explanation:
Negotiation is usually the default method for resolving disputes. This is a direct quote from p.63


NEW QUESTION # 104
An exchange of written documents between a buyer and supplier, each detailing their own Terms and Conditions is known as the Battle of the Forms. Who generally wins the Battle?

  • A. The party who issued the first document
  • B. The party who commits a breach
  • C. The party who issued the last document
  • D. The party with the greatest liability

Answer: C

Explanation:
The Battle of The forms is won by the party who sends the last form. This is referred to in the study guide as 'the last shot wins'


NEW QUESTION # 105
Which of the following will you put into box 6?

  • A. Condition
  • B. Innominate Term
  • C. Warranty

Answer: B

Explanation:
The correct answers are as follows:

This is a warranty as it is a minor term. If the invoices aren't processed in 30 days this isn't a major breach- the supplier has said they'd be okay with it.


NEW QUESTION # 106
Kelly and Chloe have a contract in which Kelly provides MRO supplies to Chloe's manufac-turing business. Kelly has committed a fundamental breach but Chloe has not suffered any loss. Chloe has chosen to terminate the contract. Can she claim damages?

  • A. no- Chloe cannot claim damages as she has not incurred a loss
  • B. yes- Chloe can claim liquidated damages if these are stated in the contract
  • C. yes- Chloe can claim unliquidated damages as the contract is terminating
  • D. no - Chloe cannot claim damages as she decided to terminate the contract

Answer: A

Explanation:
3 is the correct answer. Damages cannot be claimed is there has not been any loss. This is stated on p. 122


NEW QUESTION # 107
Penguin Ltd has a contract with Blue Company. Blue Company has just broken a warranty in the contract. What remedies does Penguin Ltd have available?

  • A. they can claim damages but not terminate the contract
  • B. they can claim damages and terminate the contract
  • C. they can sue and claim damages
  • D. they can terminate the contract but cannot claim damages

Answer: A

Explanation:
They can claim damages but not terminate the contract. If Blue company has broken a Condition, they would be able to terminate the contract, but this isn't the case for a breach of a Warranty. See p.43 for more details


NEW QUESTION # 108
......

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