CIPS L5M3 - Managing Contractual Risk

Explanation

The correct answers are 1, 4 and 5. Negotiation does NOT involve a third party and the outcome is private / confidential. See p.63 for more information on negotiation

Explanation

1 is the correct answer. This is a direct quote from p. 104 of the study guide.

Explanation

The correct answers are 1, 3 and 5: exclusions should be narrowly defined and clearly state which types of liabilities are excluded, liability is a legal responsibility and liability cannot be excluded for injury resulting from negligence. These are all explained on p. 22. Liability is never there to publish anyone (this is a red herring answer that CIPS like to put into different questions and it's usually the wrong answer - no one should look to publish anyone else). The option 'Liability can only be limited where there is valid insurance' is not true. A contract can state any limitations on liability so long as it's agreed by both parties, they're fair and don't contradict any laws. The thing about not being able to exclude liability regarding personal injury is a Law in the UK.

Explanation

The correct answer is 1. The statement is True so the answer needs to start with 'yes'. Therefore options 3 and 4 should be discounted. Option 2 is incorrect a warranty does NOT affect the prime benefit of the contract. See p. 126 for more details on Contractual Warranties and Conditions

Explanation

The correct answers are as follows:

Table Description automatically generated

This is a condition as it is fundamental to the contract.

Explanation

yes- if there is a variation clause and both parties agree. This would usually be written in as a 'price adjustment clause' but if it's not, then it could be agreed and signed by both parties as a 'contract variation'. See p.16 for more details

Explanation

The correct answers are as follows:

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Arbitration - this is a binding resolution made by a third party. This answer could be litigation, but that option has been taken by box 6 and you can only use the answers once. Mediation would not be a binding resolution and negotiation doesn't involve a third party.

Explanation

The correct answers are as follows:

Table Description automatically generated

This is 'Time is of the Essence' - failure to deliver the food on time will have consequences.

Explanation

The correct answers are as follows:

This is a contract variation as they are changing the number of staff and their hours

Explanation

If you're not happy with the decision of an adjudication you can appeal the decision. So option 2 is correct. If the appeal is turned down then unfortunately there's not much more you can do as adjudication is binding and legally enforceable. See p. 143 for more info on adjudication