Free CIPS L5M3 Practice Exam with Questions & Answers | Set: 3

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.

Explanation

3 is the correct answer. This question is testing your understanding of 'consequential loss' which is explained on p.109. Consequential loss is where you can claim damages for incidental loss (loss that isn't a direct cause of the breach of the contract, such as future earnings). In this scenario the breach is the late delivery and the incidental damage is John not being able to sell any chocolate in his shop or make his Easter Eggs. There are questions like this in the real exam- remember to think what the textbook would say and don't overthink this. The scenario doesn't always give you a lot of information (for example this doesn't say if there is a contract in place) so think- which of these four options is the most logical and what is this question trying to test me on.

Explanation

The purpose is 'to agree a way forward'. This is a direct quote from p.61. The other answers are incorrect- conflict resolution isn't always binding and sometimes not all parties are happy with the outcome. It certainly isn't about punishing about anyone (this is a common red herring option given in the exam)

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.

Explanation

The correct answers are as follows:

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Getting help from another supplier to fulfil the order is subcontracting.

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

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

Explanation

The correct answers are as follows:

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

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

Explanation

The correct answers are as follows:

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This is consequential loss. Brian Air is going to lose the profits from the sales of the flights it had sold. Now those flights won't go ahead Brian Air can claim for consequential loss which would help balance the books.