Obtain the L5M3 PDF Dumps Get 100% Outcomes Exam Questions For You To Pass [Q17-Q36]

April 4, 2023April 4, 2023 examdumpsObtain the L5M3 PDF Dumps Get 100% Outcomes Exam Questions For You To Pass [Q17-Q36] 0 Comment

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Obtain the L5M3 PDF Dumps Get 100% Outcomes Exam Questions For You To Pass

L5M3 Exam Dumps Contains FREE Real Quesions from the Actual Exam

QUESTION 17
Which TWO conflict resolution methods provide certainty of resolution?

adjudication and mediation

mediation and litigation

arbitration and conciliation

adjudication and litigation

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.

QUESTION 18
Which of the following will you put into box 3?

Payment Term

Time is of the Essence

Subcontracting

Specification

The correct answers are as follows:

Specifying the food needs to be organic is a ‘specification’

QUESTION 19
Popsi Cula is a manufacturer of sugared beverages and produces over 5000 tonnes of soda each day. It is extremely important that ingredients are delivered to the factory on specific days in order for the production to keep to its very tight schedule. Popsi Cula is onboarding a new supplier – which of the following clauses would it be important for the contract to contain?

liquidated damages

limitation of liability

time is of the essence

KPIs

A Time is of the Essence Clause should be included. This stresses the importance of obligations being completed on time, with any delays (e.g. in delivery of ingredients) being treated as a breach of a condition. The other three options are probably important to have in a contract, but don’t relate specifically to this example. See p.45 for more information on Time is of the Essence Clauses

QUESTION 20
Which of the following will you put into box 1?

compete

avoid

compromise

collaborate

The correct answers are as follows:

The answer is compromise as they’re seeking a solution that will satisy everyone.

QUESTION 21
Which of the following will you put into box 5?

Mediation

Arbitration

Litigation

Negotiation

The correct answers are as follows:

This is negotiation – no third party is mentioned and there is a face-to-face meeting in private

QUESTION 22
Terry’s Toys is a Toy Manufacturer who has an agreement to provide Toys to an online re-tailer. The retailer has ordered 500 toys from Terry and Terry has incurred costs of £3000 manufacturing the toys. Halfway through production the retailer calls Terry to cancel the order. Terry reads through the contract and sees a liquidated damages clause of £1000. What should Terry do?

Terry can apply to the court to increase the liquidated damages to £3000

Terry can sue the retailer for the additional costs incurred above the liquidated damages

Terry can deliver the toys as agreed as there is a contract in place

Terry can do nothing and must pay the additional £2000 out of his own pocket

The correct answer is 4- Terry can do nothing and must pay the additional £2000 out of his own pocket. Liquidated damages are a pre-estimate of loss – they can’t be changed by a court and you can’t demand the buyer pays any higher than this if you actually lose more than is stated. This is one of the major disadvantages of having liquidated damages. Option 3 is a bad idea- the retailer has communicated that they do not want the toys so Terry is likely to only incur additional costs if he continues manufacturing them and delivers them. See p.106. There are lots of questions like this in the exam. Remember to think what the study guide would say- rather than what would happen in real life. Don’t over complicate things.

QUESTION 23
Which of the following will you put into box 8?

Mediation

Arbitration

Litigation

Negotiation

The correct answers are as follows:

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.

QUESTION 24
If an innocent party wishes to terminate a contract due to a breach, which of the following is true?

only future obligations of the parties are excused and discharged

all obligations of the innocent party are excused and discharged

all obligations of the offending party are excused and discharged

only past obligations of the parties are excused and discharged

The correct answer is “only future obligations of the parties are excused and discharged” – all cur-rent and past obligations need to be fulfilled, or remedied (e.g. through liquidated damages). When an innocent party terminates a contract, they are still obliged to fulfil their own obligations. P.47

QUESTION 25
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

restitution damages intend to return the innocent party to the position they were in be-fore the contract

restitution damages considers the position of the breaching party before the contract

restitution damages are based on how much was gained by the breaching party as a re-sult of the breach

restitution damages are not limited to pre-agreed levels stated in the contract

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.

QUESTION 26
Fruity McFruitFace is an exporter of fruit. Which of the following payment terms would be most advantageous for it?

open account

documentary collection

documentary credits

advance payment

Exporters prefer advance payment – this puts the risk with the importer / buyer. There’s a table of these four terms on p.36. An importer would prefer an open account arrangements. The other two options are in the middle and the risk is more equally split between the two parties.

QUESTION 27
Which of the following would not be considered a contract? Select TWO

A written agreement between two robbers to rob a bank which states that the money gained would be split evenly between the two.

a domestic agreement between two parents about who will pick the kids up from school

a phone call between a supplier and buyer in which the buyer agrees to purchase 100 teddy bears from the supplier for £100.

a written document in which Paul agrees to clean Freda’s house for £10

an email chain between a buyer and supplier which includes a PO and Invoice

The correct answers are; A written agreement between two robbers to rob a bank which states that the money gained would be split evenly between the two AND a domestic agreement between two parents about who will pick the kids up from school. There are 3 instances when a contract isn’t considered a contract and these are; illegal activity (like example A), a social or domestic arrange-ment (like example B) and when something is an ‘Invitation to Treat’. See p.2-3 Remember con-tracts don’t have to be written – they can be verbal (example C), the exchange doesn’t have to be fair (example D) and it can be implied by conduct (example E).

QUESTION 28
Which of the following will you put into box 3?

anticipatory breach

fundamental breach

payment terms

specification

The correct answers are as follows:

This is a fundamental breach. The key here is the scenario says ‘huge issue’. Out of the four scenarios this one is the most important / serious and therefore will be the fundamental breach.

QUESTION 29
When assessing damages caused by a breach, which of the following statements is true?

damages are limited to what is stated within the contract

damages can be difficult to assess before a breach has occurred and therefore should be decided through conflict resolution

damages attempt to position the innocent party in the position that they would have been in had the contract been performed as expected

damages attempt to compensate the innocent party for errors made by the offending party

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).

QUESTION 30
Perry is seeking a resolution to a conflict he has with his supplier. He wants a third party to make a binding and legally enforceable decision and wants the issue to remain confidential. He is considering litigation. Is this the best solution for Perry?

yes- litigation is the most appropriate for his requirements

no- Perry should try mediation

no- Perry should try Adjudication

no – Perry should try Conciliation

Perry should try adjudication. Litigation is public so there would be no confidentiality. Out of the four options only adjudication would provide Perry with what he needs; a binding decision which is confidential. See p.146 for more information on litigation.

QUESTION 31
Which of the following is usually the default method for resolving disputes?

litigation

mediation

negotiation

conciliation

Negotiation is usually the default method for resolving disputes. This is a direct quote from p.63

QUESTION 32
Where two parties are engaged in international trade and have a long term relationship and a degree of mutual trust, which payment mechanism is commonly used?

Letter of Credit

Documentary Collection

Bill of Exchange

Stage Payment

Documentary collection is used in international transactions where there is trust. This is explained on p. 35 It’s basically when supplier and buyer delegate collection of payments to their respective banks. They need to trust that each other will actually pay – otherwise they wouldn’t delegate this. A Letter of Credit is a documentary credit confirmed by a bank, usually for export. A Bill of Ex-change is a promise to pay at a later date, usually supported by a bank. Stage payments are used in big purchases, such as construction projects where payment is given to the contractor when certain milestones are hit.

QUESTION 33
Restitution damages are often calculated before contracts are signed and are clearly stated within a contract. Which of the following statements is not true?

restitution damages means you are unable to claim for future losses

restitution damages may leave the breaching party in a worse position than they were in before the contract began

restitution damages are calculated based on how much the breaching party gained, ra-ther than how much the innocent party lost

restitution damages cannot be mitigated by the actions of the innocent party

“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

QUESTION 34
Molly is a wedding planner who has just set up as a sole-trader. She has a meeting with a po-tential couple to organise their wedding. The couple is extremely risk adverse and have asked Molly to email them a copy of her insurances. Which insurances should Molly send? Select TWO

Products Liability Insurance

Employers Liability Insurance

Professional Indemnity Insurance

Public Liability Insurance

The correct answers are indemnity insurance and public liability insurance. Molly doesn’t have any products so this wouldn’t be required- she’s a consultant. As a sole-trader she doesn’t have employees so doesn’t need Employer’s Liability Insurance. The book does not go into much detail about types of insurances – but this is a known exam topic. So if you aren’t confident on these four types of insurance and when you’d expect a supplier to have them – do some extra research before the exam. Insurance types are briefly mentioned on p. 25

QUESTION 35
If a party is to ‘repudiate’ a contract, what does this mean?

the party is cancelling the contract as it is no longer needed

the party is using the break-clause to end the contract

the party indicates they no longer intend to fulfil their contractual obligations, usually in response to a breach

the party gives notice that they anticipate that they will not be able to fulfil their future obligations

“the party indicates they no longer intend to fulfil their contractual obligations, usually in response to a breach”. This is the definition of ‘repudiate’ given on p. 128 Before the exam check you understand the difference between repudiate, rescind and revoke. These are all ways contracts can end but are slightly different.

QUESTION 36
Which of the following will you put into box 8?

Condition

Warranty

Innominate Term

The correct answers are as follows:

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.

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