Practice L5M3 Exam Online

Question 1

Logan Gin Distillery is creating a contract for one of its new suppliers. It is a complicated item that they are ordering and if things go wrong, it would have an extremely negative impact on production, and therefore on revenue. However it is impossible to say what the cost of this would be if things were to go wrong. What type of clause should be included in the contract?

A : liquidated damages

B : unliquidated damages

C : penalty clause

D : service credit

Answer: B

Question 2

Which of the following processes is the most adversarial?

A : mediation

B : litigation

C : adjudication

D : negotiation

Answer: B

Question 3

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 4

Which of the following is not a form of ADR (Alternative Dispute Resolution)?

A : mediation

B : negotiation

C : arbitration

D : conciliation

Answer: B

Question 5

Harry is negotiating a contract for a new IT system for his business. He is investing heavily in the system and wants the system to be able to provide the services he requires for the next 10 years. However he is aware that technology is changing quickly and would like to include a clause in the contract to ensure that the system he is purchasing is useable for the next 10 years. What should Harry include in the contract?

A : limitation of liability

B : service credits

C : benchmarking

D : change control

Answer: C

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:	May 16, 2024

CIPS L5M3