CIPS L5M3 Exam Questions Instant Access - No Installation Required

Question 1

Which of the following conflict resolution styles may involve a private caucus and a joint ses-sion?

Amediation

Badjudication

Cnegotiation

Dlitigation

Answer : A

This is Mediation. The private caucus is when each of the parties meets in private with the media-tor, this is usually after a joint session between the three parties. See p.71 for more information on mediation

Question 2

Fishfingers Ltd has a contract with a supplier of cod. When the contract was set up it was not known how important specific delivery times would be for the arrival of the fish. After several months it has now become apparent that delivering the fish within 3 hours of them being caught is fundamental to the contract as delayed delivery results in poorer quality Fish Fingers. When the contract was set up what was the delivery times?

Aa condition of the contract

Ba warranty

Can innominate term

Da time is of the essence clause

Answer : C

An Innominate Term is the correct answer. At the time the contract was written, we didn't know how important the delivery time was - therefore it wasn't a condition or a warranty- it was an innominate term. An innominate term is a term that is difficult to classify at the time of drafting a contract. A time is of the essence clause would be a good thing to include in this contract now that we know how important the delivery times are. For more information on Conditions, Warranties and Innominate Terms see p. 43

Question 3

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?

Ayes- the breach has occurred and a contract is in place

Byes- Alan can claim damages and rescind the contract

Cno- Alan could only claim if the breach was of a condition, not a warranty

Dno- Alan cannot claim because the breach was so long ago

Answer : A

'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

Question 4

Tyrone Enterprises has just come out of a meeting with one of its suppliers Bob. The meeting has not gone well and the contract has become frustrated. What does this mean?

ANegotiations between the buyer and supplier have failed and dispute resolution will need to take place

Bthe supplier has committed a major breach and is unable to fulfil the contract

Ca situation has occurred which means that the contract can no longer be performed

DThe buyer no longer requires the supplier but is tied into the contract

Answer : C

Frustrated is when 'a situation has occurred which means that the contract can no longer be per-formed'. The situation is one which is outside of the control of either party and its no one's fault that this has happened. A common example of this is when contracts were unable to be performed due to Covid-19 and the national lockdown. The government mandated everyone 'stay at home' and therefore some business contracts were unable to be fulfilled, and were therefore 'frustrated' (for example the delivery of popcorn to cinemas- the cinemas were told by the government to close so the popcorn couldn't be delivered. This wasn't anyone's fault). See p. 47 for more information on Contract Frustration

Question 5

Which of the following statements about adjudication is true?

Aadjudicators are appointed at random and therefore may not have specific knowledge of the subject matter

Bthe decision making process can be lengthy and expensive

Cparties are expected to present their cases in person in front of the adjudicator

Dthe decision made by the adjudicator is binding and usually communicated within 28 days

Answer : D

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.

Question 6

Which of the following is a consensual form of dispute resolution?

Anegotiation

Bmediation

Clitigation

Dadjudication

Answer : B

Mediation is consensual- consensual is when a third party is introduced to help reach an agreement. This is in contrast to adjudicative dispute resolution in which the third party acts as a judge and decision maker. Negotiation doesn't involve a third party so is neither. See p. 137.

Question 7

Robert has a contract with Farmer Ted who provides his manufacturing firm with potatoes. There is a contract in place, signed by both parties that Ted will deliver 2 tonnes of potatoes per week. Due to changes in demand, Robert would like Ted to start providing 3 tonnes of potatoes every three weeks. What must be in place for this change to occur?

Aa variation clause and a new liquidated damage fee

Ba variation clause and a signed agreement by both parties

Ca notification of change and adequate compensation

Da notification of change and indemnity

Answer : B

A variation clause and signed agreement by both parties is required to make the change. See p.16-17 for more information on contract variations. Note a 'notification of change' isn't valid unless it's accepted by the other party- so it's a good idea for both parties to sign to say they agree to the change.

CIPS Managing Contractual Risk L5M3 Exam Questions