L5M3 Exam Dumps - Managing Contractual Risk

Explanation

Crystalised means ' a dispute has occurred which qualifies for resolution by adjudication'. This is a direct quote from p. 144

Explanation

Adjudication and Litigation (and Arbitration too) all provide certainty of a resolution. The other methods don’t. There's a really useful table with this information on p.87 of the study guide.

Explanation

The correct answers are 1, 4 and 5. Negotiation does NOT involve a third party and the outcome is private / confidential. See p.63 for more information on negotiation

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

1+3 are correct. Specific Performance tend to go through the courts so this is a lengthy and costly process. Because it's mandated by the courts it means that if the offending party doesn't comply, this is a criminal offence and they can be arrested. Option 2 is incorrect as it is the opposite of option 1. Option 4 is incorrect because there is no need for the innocent party to mitigate any losses. See p. 132 for more information on Specific Performance

Explanation

The correct answers are as follows:

Table Description automatically generated

This is mediation - there's a third party with no powers. The answer can't be negotiation as negotiation doesn't have a third party. The answer can't be litigation or arbitration as the third party here does have decision making power.

Explanation

The correct answers are as follows:

Table Description automatically generated

This is an anticipatory breach as the breach hasn't happened yet- it's about what will happen to the future summer order.

Explanation

The correct answers are as follows:

Table Description automatically generated

This is a condition. Again the food being organic would be fundamental to the contract as the health of the llamas depend on it.

This is arbitration as it involves a panel.

This is an innominate term as it won't be mentioned in the contract. It won't be until a breach occurs when it is decided whether the issue of subcontracting is a condition or a warranty, and which one it will be, will likely depend on the situation. For example if they subcontract out to a non-organic llama food provider, that would probably be a Condition. If they get help fulfilling an order and the subcontractor is also organic, that's probably a warranty.

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

No - There is no consideration. For a document to be considered a contract there must be consideration. This means something of value must be exchanged. In this example John gives Larry something but Larry doesn't give John anything. Therefore there is no consideration and this is not a contract. See p.12

Explanation

The correct answers are as follows:

The answer is liquidated damages as they're seeking compensation for loss.

Explanation

The correct answer is: 'damages attempt to position the innocent party in the position that they would have been had the contract been performed as expected'. This is a quote from p. 121 Option1 is incorrect as unliquidated damages aren't stated in a contract. Option 2 is incorrect because liquidated damages are an assessment of damages before a breach. Option 4 is incorrect because not all breaches are caused by errors (they can be caused by negligence or the offending party withholding something).

Explanation

The correct answers are as follows:

The answer is compete because they're not concerned with preserving the relationship

Explanation

The correct answers are as follows:

Table Description automatically generated

This is mediation because 1) it's private and 2) there's a third party present

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.