Practice L5M3 Exam Online

Question 1

2021-04-01-09-13-17-26ac4e281adef4bae85e39b38d532e9c

Which of the following will you put into box 4?

A :

Payment Term

B : Time is of the Essence

C : Subcontracting

D : Specification

Answer: C

Question 2

Which of the following would constitute an offer? Select TWO:

A : a display in a shop window

B : an advert on a website

C : an auction

D : a bid on an auction

E : a price proposal that is valid for 14 days

Answer: A,D

Question 3

Terry's Toys is a Toy Manufacturer who has an agreement to provide Toys to an online retailer. The retailer has ordered 500 toys from Terry and Terry has incurred costs of £3000 manufacturing the toys. Halfway through production the retailer calls Terry to cancel the order. Terry reads through the contract and sees a liquidated damages clause of £1000. What should Terry do?

A : Terry can apply to the court to increase the liquidated damages to £3000

B : Terry can sue the retailer for the additional costs incurred above the liquidated damages

C : Terry can deliver the toys as agreed as there is a contract in place

D : Terry can do nothing and must pay the additional £2000 out of his own pocket

Answer: D

Question 4

Which of the following would be included in a contract to assign costs and responsibilities between buyer and seller when products are delivered?

A : Indemnity

B : Liquidated Damages

C : Liability

D : Incoterms

Answer: D

Question 5

Sarah is a baker and orders free-range eggs from a local supplier which she uses to make cakes. There is a contract in place which included a specification that states that the eggs must be free-range. One day the supplier delivers eggs which Sarah uses in the cakes. Later she discovered that these were not free-range. Sarah believes that the supplier has broken the contract. Is this true?

A : Yes- this is a breach of a condition

B : Yes- this is a fundamental breach

C : no- the specification is not a contract document

D : no - there has been a breach in a warranty

Answer: D

Name:	CORE Level 5 Managing Contractual Risk
Exam Code:	L5M3
Certification:	Level 5 Advanced Diploma in Procurement and Supply
Vendor:	CIPS
Total Questions:	122
Last Updated:	Mar 12, 2026

CIPS L5M3 Answers