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The exam covers a range of topics, including contract management, contract performance, and contract review. Candidates will also learn about the different types of contracts and the key elements that should be included in each contract.

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CIPS Managing Contractual Risk Sample Questions (Q12-Q17):

NEW QUESTION # 12
A failure to perform a provision of a contract which does not affect the end performance of the contract is known as what?

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

Answer: D

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

NEW QUESTION # 13
What is a Prime Contract?

A. A contract between a buyer and main supplier
B. A contract between an end customer and a company which has full responsibility for its performance
C. A contract between a supplier and a subcontractor
D. A contract between a public sector organisation and the taxpayer

Answer: B

Explanation:
"A contract between an end customer and a company which has full responsibility for its perfor-mance" is the correct answer. This is the definition of Prime Contract given on p. 47

NEW QUESTION # 14
Which of the following is not a way in which a contract can end?

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

Answer: A

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 # 15
An agreement in which an organisation is not accountable for any damages that occur during a contract is known as what?

A. limited liability
B. waiver of subrogation
C. liquidated damages
D. hold harmless agreement

Answer: D

Explanation:
This is a Hold Harmless Agreement and the definition is given on p. 26. A Waiver of Subrogation is a related term which stops an insurance firm claiming money back from someone in the contract - see p.26 for more info.

NEW QUESTION # 16
Which of these statements about mediation is true? Select TWO

A. mediation is flexible
B. mediation is expensive
C. mediation can be used as a stalling tactic
D. mediation involves a third party who makes a judgement on the issue
E. mediation produces legal precedents

Answer: A,C

Explanation:
The correct answers are 1 and 3. The other options are false; Mediation does not produce legal precedents- only litigation can do this. Mediation is a cheap dispute resolution option (much cheaper than arbitration or litigation) and the third party has no authority on the matter- they are there as a facilitator of dialogue, not to make a judgement. For more information on mediation see p.74

NEW QUESTION # 17
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