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CIPS Managing Contractual Risk Sample Questions (Q52-Q57):NEW QUESTION # 52
Which of the following is usually the default method for resolving disputes?
Answer: B
Explanation:
Negotiation is usually the default method for resolving disputes. This is a direct quote from p.63
NEW QUESTION # 53
Which of the following situations would be considered a minor breach of a contract? Select TWO:
Answer: A,C
Explanation:
The correct answers are: 1) the painter using magnolia instead of white, and 5) the supplier who was late on his delivery. These are considered minor breaches because the contract was still fulfilled and it didn't affect the contract in any significant way. In this type of question you have to use logic to deduce the right answer; 2) A consultant giving bad advice would be a major breach - it would be a huge issue, particularly if that advice led to an accident or death. Think about an Architect advising on a type of pillar, and it turns out that pillar can't support the weight of the building. That would be bad. 3) Lions and Tigers are not the same thing - so that would be a pretty fundamental mistake in a contract. 4) Breaching a non-disclosure agreement is usually considered a major breach of a contract (this is mentioned in chapter 2.1). See p. 48 for more information on minor breaches.
NEW QUESTION # 54
When a contract becomes 'crystalised' what does this mean?
Answer: A
Explanation:
Crystalised means ' a dispute has occurred which qualifies for resolution by adjudication'. This is a direct quote from p. 144
NEW QUESTION # 55
A breach which is so severe that it goes to the root of the contract is known as what?
Answer: A
Explanation:
This is a Fundamental Breach. Fundamental Breach and Major Breach are very similar- they're both really bad and can lead to damages and the termination of the contract. The difference is that a Fundamental Breach is so bad that it goes to the root of the contract - a breach so bad that the contract is basically worthless. For example if you make a contract with a supplier to have potatoes delivered but it turns out they don't sell potatoes, only apples, and they keep sending you apples instead of potatoes. This would be a fundamental breach because its something so fundamental to the contract that there's no point in the contract existing if there's a breach like this. Condition Breach and Essence Breach are made up words- they don't exist. P.44
NEW QUESTION # 56
Lollypop Manufacturer has a long standing contract with Retailer A.
They are three years into a five year contract and have been providing lollypops at 10p each since the beginning of the contract. Due to changes in the supply chain Lollypop Manufacturer would like a price increase. Can this be done?
Answer: D
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
NEW QUESTION # 57
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