[May 09, 2023] Free CIPS Level 5 Advanced Diploma in Procurement and Supply L5M3 Exam Question
L5M3 dumps & CIPS Level 5 Advanced Diploma in Procurement and Supply sure practice dumps
The CIPS L5M3 course is divided into several modules, each of which focuses on a specific aspect of contractual risk management. The course is delivered through a combination of online learning and classroom-based training, allowing participants to study at their own pace and in their own time. Upon completion of the course, participants are required to pass an examination to demonstrate their knowledge and understanding of the subject matter.
NEW QUESTION # 58
Kelly and Chloe have a contract in which Kelly provides MRO supplies to Chloe's manufac-turing business. Kelly has committed a fundamental breach but Chloe has not suffered any loss. Chloe has chosen to terminate the contract. Can she claim damages?
- A. yes- Chloe can claim unliquidated damages as the contract is terminating
- B. no - Chloe cannot claim damages as she decided to terminate the contract
- C. no- Chloe cannot claim damages as she has not incurred a loss
- D. yes- Chloe can claim liquidated damages if these are stated in the contract
Answer: C
Explanation:
3 is the correct answer. Damages cannot be claimed is there has not been any loss. This is stated on p. 122
NEW QUESTION # 59
Which of the following will you put into box 2?
- A. fundamental breach
- B. anticipatory breach
- C. specification
- D. payment terms
Answer: D
Explanation:
The correct answers are as follows:
This is payment terms- the clues here are 'financial' and 'progress payments'
NEW QUESTION # 60
Which of the following will you put into box 4?
- A. fundamental breach
- B. anticipatory breach
- C. specification
- D. payment terms
Answer: C
Explanation:
The correct answers are as follows:
This is the specification as it talks about types of fabric.
NEW QUESTION # 61
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?
- A. no- this would be unfair on the buyer
- B. yes- prices always go up in contracts
- C. no- the contract is ongoing for another 2 years
- D. yes- if there is a variation clause and both parties agree
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 # 62
Service Credits are a form of what?
- A. liquidated damages
- B. Consideration
- C. indemnity
- D. KPI
Answer: A
Explanation:
Service Credits are a form of Liquidated Damages - it's a financial remedy, common in the IT in-dustry, which is available to a buyer when the service level falls below an expected level. See p. 31 for more details.
NEW QUESTION # 63
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?
- A. awarding damages
- B. assigning liability
- C. conflict resolution
- D. affirmation of the contract
Answer: D
Explanation:
This is affirmation of the contract. When a breach occurs the injured party has two options; termi-nate the contract or affirm the contract. In this example they have affirmed the contract- they have chosen to continue working with the offending party. See p.60.
NEW QUESTION # 64
Verity Fashion is a clothing manufacturer and has an order to create 10,000 pairs of flipflops for a retailer for the summer. The order was placed over the phone in February. The order has been completed and has been boxed up ready for delivery. The retailer calls Verity Fashion in June and says that the order is no longer required. What action can Verity Fashion take?
- A. nothing- there is no written contract in place
- B. sue for damages as the flip flops have already been made and this incurred costs
- C. claim on insurance
- D. subcontract the manufacturing of the flipflops to a third party
Answer: B
Explanation:
Verity can sue for damages. The order was placed over the phone meaning that there was a verbal contract in place. Contracts do not need to be written to be enforceable so option 2 is incorrect. There is no termination clause mentioned in the question so you can assume that there isn't one. This means that the retailer is committing a breach of the verbal contract by cancelling the order. Verity could therefore apply for damages. (Whether or not they'd be awarded is a different matter!). This question tests your understanding of when contracts can be terminated and remedies for breaches. See p. 134.
NEW QUESTION # 65
Which of the following would be included in a contract to assign costs and responsibilities be-tween buyer and seller when products are delivered?
- A. Incoterms
- B. Indemnity
- C. Liquidated Damages
- D. Liability
Answer: A
Explanation:
Incoterms assign costs and responsibilities about when products are delivered. See p. 37 for a full list of the different Incoterms. You don't need to know all Incoterms for the exam, but it's a good idea to know what they are and why they'd be put into a contract
NEW QUESTION # 66
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?
- A. a notification of change and indemnity
- B. a variation clause and a signed agreement by both parties
- C. a variation clause and a new liquidated damage fee
- D. a notification of change and adequate compensation
Answer: B
Explanation:
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.
NEW QUESTION # 67
Which of the following will you put into box 1?
- A. fundamental breach
- B. anticipatory breach
- C. specification
- D. payment terms
Answer: B
Explanation:
The correct answers are as follows:
This is an anticipatory breach as the breach hasn't happened yet- it's about what will happen to the future summer order.
NEW QUESTION # 68
Which of the following are advantages to seeking a solution to conflict via litigation?
- A. There is no confidentiality
- B. The decision can be made by someone who isn't an expert in their field.
- C. the process provides certainty that an outcome will be reached
- D. The process is quick and cost-effective
Answer: C
Explanation:
The correct answer is 1 'the process provides certainty that an outcome will be reached'. Options 2 and 3 are true statements but they are not advantages of litigation, they are disadvantages. Option 4 is false - litigation is a long and costly process. See p. 85 for more information on litigation
NEW QUESTION # 69
Which of the following will you put into box 6?
- A. Arbitration
- B. Litigation
- C. Negotiation
- D. Mediation
Answer: B
Explanation:
The correct answers are as follows:
Litigation is the only resolution method which goes 'through the courts'. Therefore this is the correct answer
NEW QUESTION # 70
Restitution Measures are an award which seeks to return the value of a benefit which has been seen to be unfairly received. Which of the following statements about Restitution Measures is TRUE? Select TWO
- A. restitution damages intend to return the innocent party to the position they were in be-fore the contract
- B. restitution damages are based on how much was gained by the breaching party as a re-sult of the breach
- C. restitution damages considers the position of the breaching party before the contract
- D. restitution damages are not limited to pre-agreed levels stated in the contract
Answer: A,B
Explanation:
The correct answers are 1 and 3. These are taken from p. 124. Option 2 is incorrect - this is the definition of reliance damages. Option 4 is also incorrect- restitution damages are limited to pre-agreed levels stated in the contract.
NEW QUESTION # 71
Which of the following will you put into box 4?
- A. Time is of the Essence
- B. Payment Term
- C. Specification
- D. Subcontracting
Answer: A
Explanation:
The correct answers are as follows:
Getting help from another supplier to fulfil the order is subcontracting.
NEW QUESTION # 72
Which of the following are a suitable course of action to take in the event of a minor breach of a contract? Select TWO
- A. litigation
- B. adjudication
- C. collaboration
- D. progress meetings
- E. liquidated damages
Answer: C,D
Explanation:
In the event of a minor breach, CIPS says it is best to work with the defaulting party by conducting progress meetings and collaboration. This is on p. 50 of the study guide
NEW QUESTION # 73
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