[Sep 15, 2023] L5M3 Test Engine files, L5M3 Dumps PDF
Latest CIPS L5M3 PDF and Dumps (2023) Free Exam Questions Answers
CIPS L5M3 Exam is essential for procurement professionals who are looking to advance their career in the field of contract management. Managing Contractual Risk certification demonstrates that you have the necessary skills and knowledge to manage contracts effectively, mitigate risks, and build strong relationships with suppliers. It is also a valuable certification for employers who are looking to hire procurement professionals with expertise in contract management.
CIPS L5M3 (Managing Contractual Risk) certification exam is designed to assess the knowledge and skills required for individuals involved in contract management, procurement or supply chain management. It is a higher-level certification that is suitable for professionals who want to advance their careers in these fields. Managing Contractual Risk certification exam is globally recognized and is ideal for those who want to showcase their expertise in managing contractual risks.
NEW QUESTION # 42
Which of the following is usually the default method for resolving disputes?
- A. negotiation
- B. mediation
- C. conciliation
- D. litigation
Answer: A
Explanation:
Negotiation is usually the default method for resolving disputes. This is a direct quote from p.63
NEW QUESTION # 43
Conciliation differs from mediation in which of the following ways?
- A. mediation is voluntary and conciliation is mandatory
- B. the mediator has no decision making power but a conciliator can provide recommen-dations
- C. the outcome of mediation is not binding and the outcome of conciliation is binding
- D. mediation is cheaper than conciliation
Answer: B
Explanation:
The true statement is 'the mediator has no decision making power but a conciliator can provide recommendations'. The other statements are false; both processes are voluntary, cheap and non-binding.
NEW QUESTION # 44
ABC has a contract with its supplier DEF who delivers pasta to ABC's manufacturing plant. DEF has committed a breach and conflict resolution has taken place. The Court has awarded ABC 'specific performance' damages. What could this involve?
- A. DEF must deliver the pasta required by ABC
- B. DEF must pay money to ABC as stated in the liquidated damages clause
- C. DEF must rescind the contract
- D. DEF must pay an amount of money as determined by the courts
Answer: A
Explanation:
DEF must deliver the pasta required by ABC is the correct answer. Specific performance is when the innocent party is rewarded by receiving what was initially negotiated - in this case the delivery of pasta. It's basically a posh way of saying that the court mandates you to do what the contract says. See p. 129 for information on Specific Performance.
NEW QUESTION # 45
Which of these is NOT a stage in negotiation?
- A. proposal
- B. bargaining
- C. adjourning
- D. agreement
Answer: C
Explanation:
Adjourning is not a stage. The 6 stages of negotiation are; preparation, opening, discussion, pro-posal, bargaining and agreement. P.64
NEW QUESTION # 46
When considering consequential loss, can a cap be placed on the amount claimed?
- A. yes- this is known as a limitation of liability clause
- B. yes- this is known as a pre-estimate of damages
- C. no- there can be no cap to either direct loss or consequential loss
- D. no- there can be a cap to direct loss but not to consequential loss
Answer: A
Explanation:
Yes- this is known as a limitation of liability clause. See p. 112 for more details
NEW QUESTION # 47
A contract term which is difficult to classify at the time of drafting a contract is known as?
- A. condition
- B. consideration
- C. warranty
- D. innominate
Answer: D
Explanation:
Innominate - the conflict resolution process would determine if the clause is a condition or a war-ranty. Before there's a breach there's no way to know, so it's classed as an Innominate Term. P. 43. Types of contract terms comes up a lot in the exam. Learn these.
NEW QUESTION # 48
Which of the following will you put into box 6?
- A. Warranty
- B. Condition
- C. Innominate Term
Answer: C
Explanation:
The correct answers are as follows:
This is a warranty as it is a minor term. If the invoices aren't processed in 30 days this isn't a major breach- the supplier has said they'd be okay with it.
NEW QUESTION # 49
Sally is shopping and sees an advert in a travel agent's window that says that flights to Malta are 50% off. She enters the shop and begins to speak to a travel agent who informs her that the poster she'd seen is out of date. Is the travel agent obliged to give Sally the discounted flight?
- A. yes- the offer was displayed and therefore must be honoured
- B. no - the advert is an invitation to treat
- C. no- the offer has been rescinded
- D. yes- the offer is valid until another offer or counter offer is provided
Answer: B
Explanation:
Adverts are invitations to treat - not offers. Therefore the travel agent isn't bound to provide the discounted flight. See p.3 for more information on offers and ITTs
NEW QUESTION # 50
Dianne has a loan agreement which contains a clause for default. What does a clause for default imply?
- A. this allows a lender to demand payment from a guarantor if the borrower is unable to pay
- B. this allows the lender to demand full payment of the outstanding balance
- C. this allows the lender to declare insolvency
- D. this allows the lender to demand overdue payments are made straight away
Answer: B
Explanation:
A Clause for Default 'allows the lender to demand full payment of the outstanding balance'. See p.102. And always read the small print before you sign a loan agreement :)
NEW QUESTION # 51
Which of the following will you put into box 5?
- A. adjudication
- B. arbitration
- C. mediation
- D. litigation
Answer: A
Explanation:
The correct answers are as follows:
This is adjudication. Adjudication is the only option which has a specified timeframe.
NEW QUESTION # 52
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. Liability
- D. Liquidated Damages
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 # 53
Which of the following are advantages to seeking a solution to conflict via litigation?
- A. The decision can be made by someone who isn't an expert in their field.
- B. the process provides certainty that an outcome will be reached
- C. There is no confidentiality
- D. The process is quick and cost-effective
Answer: B
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 # 54
Jenny has received a written offer from a supplier. She emails them to clarify if they can do next day delivery. The supplier does not reply. The next day Jenny makes the payment. Has a contract been formed?
- A. yes- the supplier made an offer and Jenny accepted it by making a payment
- B. yes- a counter offer has been made
- C. no- a contract has not been signed
- D. no- the clarification constitutes a conditional acceptance
Answer: A
Explanation:
Yes- the supplier made an offer and Jenny accepted it by making a payment is the correct answer. The other three options are incorrect: 'yes- a counter offer has been made' = there is no counter-offer made in this example - a clarification is not a counter-offer / 'no- the clarification constitutes a conditional acceptance' = clarifications are not conditional acceptance / 'no- a contract has not been signed' = there doesn't need to be a signed document- acceptance can be through performance. Issuing the payment would be considered acceptance via performance. See p 2-12 for more information on conditional acceptance, counter offers and acceptance of offers.
NEW QUESTION # 55
Harry is negotiating a contract for a new IT system for his business. He is investing heavily in the system and wants the system to be able to provide the services he requires for the next 10 years. However he is aware that technology is changing quickly and would like to include a clause in the contract to ensure that the system he is purchasing is useable for the next 10 years. What should Harry include in the contract?
- A. service credits
- B. benchmarking
- C. change control
- D. limitation of liability
Answer: B
Explanation:
Benchmarking should be included- this is common in long-term contracts where variables can af-fect the market over time. By including benchmarking, harry gets assurance that the product he purchases will meet the market expectations over the next 10 years. The other answers are incorrect; 1- there is no mention of liability in the question so this is incorrect. 2- service credits would be used if he is concerned the product would be offline/ not perform (it's a form of damages) but this isn't the case in this scenario. He's not worried about underperformance, he's worried about obsolescence. 4- change control is for when there are multiple versions of a contract due to amendments being made.
NEW QUESTION # 56
Which of the following will you put into box 2?
- A. Time is of the Essence
- B. Subcontracting
- C. Payment Term
- D. Specification
Answer: C
Explanation:
The correct answers are as follows:
This is payment terms. The scenario mentions processing invoices, which is to do with paying the supplier
NEW QUESTION # 57
Mark is a consultant who works with building managers and advises them on how to make their buildings safer. What type of insurance should Mark have?
- A. Property Insurance
- B. Professional Indemnity
- C. Product Liability
- D. Public Liability
Answer: B
Explanation:
Mark needs professional indemnity insurance. Types of insurance is a known exam topic and the study guide does not cover this particularly well. Types of insurance is mentioned on p.25 but Pro-fessional Indemnity Insurance isn't really explained and this does come up in the exam. Professional Indemnity Insurance is needed when your job is to give advice to people (like as a Consultant). It's used for if the advice you give turns out to be bad. For example, if Mark told the building manager he should get ABC Fire Alarm installed, and actually this Fire Alarm doesn't meet the necessary Health and Safety standards, he could get sued by the building manager. He could then claim on his Professional Indemnity Insurance.
NEW QUESTION # 58
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. collaboration
- B. adjudication
- C. progress meetings
- D. liquidated damages
- E. litigation
Answer: A,C
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 # 59
Parky Parks Ltd has a contract with Slides R Us for the provision of children's playground equipment. The contract contains a clause for liquidated damages and puts the figure at £500k. Which of the following statements is correct? Select TWO
- A. Damages under the amount of £500k are not required to be paid to Parky Parks
- B. Liquidated damages needs to be a 100% accurate figure
- C. costs incurred above £500k will be covered by Parky Parks Ltd
- D. If damages exceed £500k Parky Parks can apply to the courts to get Slides R Us to pay above this amount
- E. liquidated damages is a genuine estimate of loss
Answer: C,E
Explanation:
The true statements are: liquidated damages is a genuine estimate of loss (it doesn't need to be a 100% accurate figure, so long as it's your best estimate) and costs incurred above £500k will be covered by Parky Parks Ltd. That's one of the disadvantages of stating liquidated damages in a contract for a buyer- if damages total more than this, you have to foot the bill for the rest. See p.30 for more info
NEW QUESTION # 60
Restitution damages are often calculated before contracts are signed and are clearly stated within a contract. Which of the following statements is not true?
- A. restitution damages means you are unable to claim for future losses
- B. restitution damages cannot be mitigated by the actions of the innocent party
- C. restitution damages may leave the breaching party in a worse position than they were in before the contract began
- D. restitution damages are calculated based on how much the breaching party gained, ra-ther than how much the innocent party lost
Answer: B
Explanation:
"restitution damages cannot be mitigated by the actions of the innocent party" is the untrue state-ment out of these four. The general principle of Restitution Damages is that the innocent party is expected to be proactive in mitigating the consequences of any breach and should not allow costs to spiral out of control. See p. 124
NEW QUESTION # 61
Which of the following will you put into box 5?
- A. Litigation
- B. Arbitration
- C. Negotiation
- D. Mediation
Answer: C
Explanation:
The correct answers are as follows:
This is negotiation - no third party is mentioned and there is a face-to-face meeting in private
NEW QUESTION # 62
Which of the following will you put into box 8?
- A. adjudication
- B. mediation
- C. arbitration
- D. litigation
Answer: C
Explanation:
The correct answers are as follows:
This is arbitration as it involves a panel.
NEW QUESTION # 63
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L5M3 Free Exam Study Guide! (Updated 118 Questions): https://drive.google.com/open?id=1OCSW0A4o_ndsGTEtmqId5x-iI8nXxOTH