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L5M3 Practice Exam Questions and Answers

Managing Contractual Risk

Last Update 22 hours ago
Total Questions : 120

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Question # 1

What is a boilerplate clause?

Options:

A.  

the clause that will take precedent if there are conflicting pieces of information within a contract

B.  

a type of warranty

C.  

a clause that allows the contract to be modified if both parties are in agreement

D.  

a set of clauses that are commercially standard and expected in all contracts

Discussion 0
Question # 2

A warranty is a minor term of a contract. Is this TRUE?

Options:

A.  

yes- it does not affect the prime benefit

B.  

yes- it affects the prime benefit of the contract

C.  

no- a warranty is a fundamental term in a contract

D.  

no- a warranty is a type of innominate term

Discussion 0
Question # 3

Which of the following will you put into box 6?

Options:

A.  

adjudication

B.  

arbitration

C.  

mediation

D.  

litigation

Discussion 0
Question # 4

What is the purpose of a limitation on liability clause?

Options:

A.  

it provides an accurate pre-estimate of potential loss

B.  

it caps a company's exposure to risk

C.  

it allows a party to claim on insurance if something goes wrong

D.  

it passes the responsibility to the other party

Discussion 0
Question # 5

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

Options:

A.  

mediation

B.  

negotiation

C.  

arbitration

D.  

conciliation

Discussion 0
Question # 6

Which of the following conflict resolution styles involves a strict timeline and is commonly used within the construction industry?

Options:

A.  

conciliation

B.  

adjudication

C.  

arbitration

D.  

litigation

Discussion 0
Question # 7

Popsi Cula is a manufacturer of sugared beverages and produces over 5000 tonnes of soda each day. It is extremely important that ingredients are delivered to the factory on specific days in order for the production to keep to its very tight schedule. Popsi Cula is onboarding a new supplier - which of the following clauses would it be important for the contract to contain?

Options:

A.  

liquidated damages

B.  

limitation of liability

C.  

time is of the essence

D.  

KPIs

Discussion 0
Question # 8

Which of these statements about Guarantees are TRUE? Select 2

Options:

A.  

A Guarantee is a secondary obligation of a contract

B.  

A guarantor's responsibility is higher than the Principle

C.  

A guarantee is a promise to repair or replace an item within a defined period of time

D.  

A guarantor's responsibility cannot be higher than the Principle

Discussion 0
Question # 9

A buyer and supplier have a contract and the supplier has committed a major breach. However, as they are the sole supplier to the buyer, the buyer has decided not to terminate the contract and instead to work with the supplier to remedy the situation. What is this called?

Options:

A.  

affirmation of the contract

B.  

conflict resolution

C.  

awarding damages

D.  

assigning liability

Discussion 0
Question # 10

Which of the following will you put into box 8?

Options:

A.  

Condition

B.  

Warranty

C.  

Innominate Term

Discussion 0
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