QUESTION: 97

When a contract has been agreed on the basis of a fraudulent misrepresentation, which of the following remedies are available?

Damages only
Rescission only
An injunction only
Both damages and rescission

Answer(s): C

Explanation:

An untrue statement of fact or law made by Party A (or its agent) to Party B, which induces Party B to enter a contract with Party A thereby causing Party B loss. An action for misrepresentation can be brought in respect of a misrepresentation of fact or law.
There are three types of misrepresentation:
- Fraudulent misrepresentation: where a false representation has been made knowingly, or without belief in its truth, or recklessly as to its truth.
- Negligent misrepresentation: a representation made carelessly and in breach of duty owed by Party A to Party B to take reasonable care that the representation is accurate. If no "special relationship" exists, there may be a misrepresentation under section 2(1) of the Misrepresentation Act 1967 where a statement is made carelessly or without reasonable grounds for believing its truth.

- Innocent misrepresentation: a representation that is neither fraudulent nor negligent. The remedies for misrepresentation are rescission and/or damages. For fraudulent and negligent misrepresentation, the claimant may claim rescission and damages. For innocent misrepresentation, the court has a discretion to award damages in lieu of rescission; the court cannot award both (see section 2(2) of the Misrepresentation Act 1967). For more information, see Practice note, Misrepresentation.

Reference:

- Misrepresentation
- CIPS study guide page 55 LO 1, AC 1.2

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QUESTION: 98

Which of the following is an agreement between service provider and user that quantifies the minimum quality of service?

Service charter
Service guarantee
SLA
Service standard

Answer(s): C

Explanation:

A service-level agreement (SLA) is a commitment between a service provider and a client. Particular aspects of the service quality, availability, responsibilities are agreed between the service provider and the service user. The most common component of an SLA is that the services should be provided to the customer as agreed upon in the contract. A customer service charter is a document that outlines how an organization promises to work with its customers along with providing insights into how an organization operates. A service guarantee is a marketing tool service firms have increasingly been using to reduce consumer risk perceptions, signal quality, differentiate a service offering, and to institutionalize and professionalize their internal management of customer complaint and service recovery.

Reference:

CIPS study guide page 110 LO 2, AC 2.2

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QUESTION: 99

Which of the following is the type of insurance that cover the liabilities of service provider such as legal advice, accountancy, technical designs, etc?

PII
Product liability
Employer's liability
Public liability

Answer(s): A

Explanation:

The most usual forms of insurance cover are as below:
- Employer's liability: Employers' liability insurance, sometimes known as employment practices liability insurance (EPLI), protects employers from financial loss if a worker has a job-related injury or illness not covered by workers' compensation. Employers' liability insurance can be packaged with workers' compensation insurance to further protect companies against the costs associated with workplace injuries, illnesses, and deaths. Employers' liability insurance is also called "part 2" of a workers' compensation policy.
- Public/product liability: Public liability insurance covers you against any claims made against your business for example if you were held legally liable for personal injury, or for damage done to property. The insurance will also cover you for any legal costs associated with defending claims against your business.

- Professional indemnity insurance (PII): Professional indemnity or liability insurance offers such coverage to professional advice or service providing individuals and companies ensuring protection against any legal costs and damages awarded as a result of claims relating to negligence.
Whereas more general forms of liability insurance focus on direct forms of harm such as sustaining injuries, professional indemnity insurance provides a far more detailed and comprehensive form of coverage. The cover protects a firm or individual's liability relating to any financial loss caused by errors or omissions in the service provided as well as any alleged failure to perform on behalf of a client.
- Goods in transit coverage: Goods in transit insurance, sometimes referred to as GIT, covers goods against loss or damage while being moved from one place to another. These goods can be being carried by individuals in their own vehicle, self employed drivers or contractors or by third party carriers. The insurance can cover both domestic and international trips, with specific add-ons available for insurance within Europe.

Reference:

CIPS study guide page 151-152 LO 3, AC 3.2

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QUESTION: 100

Standard terms and conditions should become the governing terms for which group of items?

Leverage items
Bottleneck items
Strategic items
Routine items

Answer(s): D

Explanation:

Standard terms and conditions are set of terms that is prepared by an organisation. These terms can become the governing terms in low-value, low-risk transactions (or Routine items according to Kraljic's portfolio model). They can be a reference when negotiating for more important contract.

Reference:

CIPS study guide page 132-139 LO 3, AC 3.1

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QUESTION: 97

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QUESTION: 98

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QUESTION: 99

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QUESTION: 100

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