CompTIA
Checkpoint
ISC
HP
Dell
EC-Council
EXIN
Fortinet
ITIL®
Juniper
PMI
Microsoft
VMware
Avaya
Google
Salesforce
Amazon
Palo Alto Networks
Certiport
ISC2
All Vendors
  2. Home
  3. Exams
  4. CIPS
  5. L5M3

Free L5M3 Exam Braindumps (page: 12)

Page 11 of 31
PDF with 120 Questions

R3D3 is a computer manufacturer who has had an issue with their supplier. They are seeking a conflict resolution approach which is flexible but will provide a binding and enforceable outcome. They would like the resolution to be confidential and directed by an independent third party that is appointed for them.
Which of the following would be the best conflict resolution for them to select?

  1. mediation
  2. arbitration
  3. negotiation
  4. litigation

Answer(s): B

Explanation:

Arbitration ticks all of the boxes required by R3D3. Mediation isn't correct because it's not binding. Negotiation isn't correct because there's no 3rd party. Litigation isn't correct because it's not confidential. See p. 80 for more on arbitration.



Derrek owns a factory and employs a Facilities Management Company called Balls FM to look after certain aspects of the factory including cleaning and testing the machinery to ensure they are in good working condition. One day he realises that one of the cleaners doesn't work for Balls FM, he works for another company called Bells FM.
Which of the following statements regarding subcontracting is true?

  1. Subcontracting would be if Derrek delegated responsibility for managing the contract to a member of his team
  2. Balls FM have committed a fundamental breach of the contract
  3. It is okay for Balls FM to subcontract out part of the contract to Bells FM if they are unable to fulfil their obligations
  4. Subcontracting is never allowed in a contract unless specifically mentioned.

Answer(s): C

Explanation:

"It is okay for Balls to subcontract" is the correct answer. This question is testing whether you know that subcontracting can be a remedy in a contract. It is usually okay for a supplier to use a subcontractor if they're unable to fulfil their responsibilities and the alternative would be to breach the contract. This is a difficult question because you don't get a lot of context- it's based on a similar question in the exam- but just remember subcontracting can be a solution if one party can't fulfil their obligations in a contract. This is better than them breaching the contract. See p.89 for more information on subcontracting



Dianne has a loan agreement which contains a clause for default.
What does a clause for default imply?

  1. this allows the lender to demand overdue payments are made straight away
  2. this allows a lender to demand payment from a guarantor if the borrower is unable to pay
  3. this allows the lender to declare insolvency
  4. this allows the lender to demand full payment of the outstanding balance

Answer(s): D

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 :)



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?

  1. Terry can apply to the court to increase the liquidated damages to £3000
  2. Terry can sue the retailer for the additional costs incurred above the liquidated damages
  3. Terry can deliver the toys as agreed as there is a contract in place
  4. Terry can do nothing and must pay the additional £2000 out of his own pocket

Answer(s): D

Explanation:

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.






Post your Comments and Discuss CIPS L5M3 exam with other Community members:

L5M3 Discussions & Posts