Free PDF Quiz L5M3 - Managing Contractual Risk Pass-Sure Exam Registration

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CIPS Managing Contractual Risk Sample Questions (Q83-Q88):

NEW QUESTION # 83
Alan has an ongoing contract with a supplier for the provision of gardening tools to his horti-culture business. He has been working with the supplier for over 20 years and has recently discovered that the supplier committed a breach in a warranty 3 years ago. Can Alan claim damages?

A. no- Alan cannot claim because the breach was so long ago
B. yes- Alan can claim damages and rescind the contract
C. yes- the breach has occurred and a contract is in place
D. no- Alan could only claim if the breach was of a condition, not a warranty

Answer: C

Explanation:
"Yes- A Breach has occurred and a contract is in place" - this is the correct answer. Claims against warranties can be made up to six years from the date the contract is breached. Option 2 isn't correct as a breach in warranty does not allow you to rescind the contract. Options 3 and 4 are incorrect because Alan CAN claim damages. There's a useful table about warranties and conditions on p. 127

NEW QUESTION # 84
David is selling his house and Barbera would like to buy it. David is expecting to get £100,000 for his house. Barbera offers £80,000 and David asks Barbera if she'll pay £90,000 instead. Barbera says no. After a week David hasn't had any other offers so would like to accept Bar-bera's offer. Can he do this?

A. no- he waited too long and Barbera's offer has expired
B. no - David's counter offer rescinded Barbera's offer
C. yes- Barbera's offer is still valid as it didn't come with a time clause attached
D. yes- Barbera's offer is the best he will receive

Answer: B

Explanation:
"No - David's counter offer rescinded Barbera's offer" is the correct answer. Remember: "once a counter offer is made, the original offer is viewed as rejected" - p.6 of the study guide. What this means is when David goes back to Barbera about the £80,000 - he is now the offeror - and Barbera has the option to reject this. David is no longer in a position to accept or reject - Barbera is.

NEW QUESTION # 85
Which of the following will you put into box 3?

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

Answer: B

Explanation:
The correct answers are as follows:

This is a fundamental breach. The key here is the scenario says 'huge issue'. Out of the four scenarios this one is the most important / serious and therefore will be the fundamental breach.

NEW QUESTION # 86
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 dis-covered that these were not free-range. Sarah believes that the supplier has broken the con-tract. Is this true?

A. Yes- this is a fundamental breach
B. Yes- this is a breach of a condition
C. no- the specification is not a contract document
D. no - there has been a breach in a warranty

Answer: D

Explanation:
"No- there has been a breach in warranty" is the correct answer. The key to answering this question lies in the fact that the specification in this example is a warranty rather than a condition of the contract. P.45 of the study guide explains that the Sale of Goods Act has implications on whether or not a specification is a condition, warranty or innominate term and it's all about whether the product is in 'good condition' and can be used for its intended purpose. In this example the eggs were used for their intended purpose and were in good condition (or Sarah wouldn't have put them in the cakes). Therefore in this example, the eggs needing to be free-range is a warranty of the contract not a condition. Therefore options A and B are both wrong. Answer C is also wrong because the question mentioned that the specification was included in the contract. If you want to know more about the implication of the Sale of Goods act on specifications see p.45.

NEW QUESTION # 87
A failure to perform a provision of a contract which does not affect the end performance of the contract is known as what?

A. minor breach
B. warranty breach
C. small breach
D. major breach

Answer: A

Explanation:
This is a minor breach. This is the definition as given in the study guide on p. 48

NEW QUESTION # 88
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