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The CIPS L5M3 course is an essential qualification for procurement professionals who wish to enhance their knowledge and skills in managing contractual risk. The course is designed to provide participants with a comprehensive understanding of the legal framework, risk identification, assessment, mitigation, and monitoring involved in contract management. Upon completion of the course, participants will be equipped with the skills and knowledge required to manage contractual risk effectively, ensuring that their organizations are protected from potential legal and financial consequences.

CIPS Managing Contractual Risk Sample Questions (Q25-Q30):

NEW QUESTION # 25
Which of the following is not a way in which a contract can end?

A. breach
B. agreement
C. litigation
D. performance

Answer: C

Explanation:
Litigation is the correct answer. This is not a way in which a contract can end- it is a conflict resolution method. The three ways in which a contract can end are; performance, agreement and breach. See p. 42 for more details on how contracts end

NEW QUESTION # 26
Which of the following will you put into box 1?

A. specification
B. fundamental breach
C. payment terms
D. anticipatory breach

Answer: D

Explanation:
The correct answers are as follows:

This is an anticipatory breach as the breach hasn't happened yet- it's about what will happen to the future summer order.

NEW QUESTION # 27
George is a procurement manager at a manufacturing company and is reviewing a contract he has with a supplier. He notes that there are multiple appendices to the contract and there is no Precedence of Documents. What does this mean for the contract?

A. the contract is not valid
B. the clauses that come first in the document, take precedent
C. all clauses are considered equal
D. clauses in the contract take precedent over clauses in the appendices

Answer: C

Explanation:
Where there's no order of precedence, it is assumed that all documents have equal significance. This is a direct quote from the study guide p.15

NEW QUESTION # 28
Which of the following statements about adjudication is true?

A. the decision made by the adjudicator is binding and usually communicated within 28 days
B. the decision making process can be lengthy and expensive
C. parties are expected to present their cases in person in front of the adjudicator
D. adjudicators are appointed at random and therefore may not have specific knowledge of the subject matter

Answer: A

Explanation:
The true statement is 'the decision made by the adjudicator is binding and usually communicated within 28 days'. The other three are false- adjudicators are usually experts in their field, the decision making process has a tight timescale and parties present their arguments in writing. This is the only written conflict resolution method.

NEW QUESTION # 29
Which of the following would be included in a contract to assign costs and responsibilities be-tween buyer and seller when products are delivered?

A. Liquidated Damages
B. Incoterms
C. Liability
D. Indemnity

Answer: B

Explanation:
Incoterms assign costs and responsibilities about when products are delivered. See p. 37 for a full list of the different Incoterms. You don't need to know all Incoterms for the exam, but it's a good idea to know what they are and why they'd be put into a contract

NEW QUESTION # 30
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