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Free L5M3 Exam Braindumps (page: 3)

Page 3 of 31
PDF with 120 Questions

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

  1. Products Liability Insurance
  2. Employers Liability Insurance
  3. Professional Indemnity Insurance
  4. Public Liability Insurance

Answer(s): C,D

Explanation:

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



An agreement in which an organisation is not accountable for any damages that occur during a contract is known as what?

  1. limited liability
  2. liquidated damages
  3. hold harmless agreement
  4. waiver of subrogation

Answer(s): C

Explanation:

This is a Hold Harmless Agreement and the definition is given on p. 26. A Waiver of Subrogation is a related term which stops an insurance firm claiming money back from someone in the contract - see p.26 for more info.



Which of these statements about Guarantees are TRUE? Select 2

  1. A Guarantee is a secondary obligation of a contract
  2. A guarantor's responsibility is higher than the Principle
  3. A guarantee is a promise to repair or replace an item within a defined period of time
  4. A guarantor's responsibility cannot be higher than the Principle

Answer(s): A,D

Explanation:

"A Guarantee is a secondary obligation of a contract' and 'A guarantor's responsibility cannot be higher than the Principle' are the correct answers. Guarantees are explained on p.28. Be careful not to confuse this with Warranty. A promise to repair or replace an item within a defined period of time is the definition of a warranty. That was put in there to trick you. Sorry. Remember a Guaran-tee is to do something when the Principle of the contract fails to do it. It's most common in leasing agreements- if you're a young person, you'll often need a responsible adult / parent to sign the lease as your Guarantor. As a Guarantor, they promise to pay the rent if you're unable to. Legally they can't be asked to do any more than you are assigned to do in the contract. So if your rent is £500 a month, that's all they can be asked to pay if you don't pay it. The primary obligation is between you and the landlord. The secondary obligation is between the guarantor and you.



Tutu Incorporated has a contract with a software company to provide their IT software. They want to ensure that the supplier pays compensation if there are any issues with service (e.g. the software doesn't work for a day).
Which two items would Tutu Incorporated need to include in the contract?

  1. unliquidated damages
  2. letter of credit
  3. service level agreement
  4. service credit
  5. insurance

Answer(s): C,D

Explanation:

They should include service credits and a service level agreement. Service Credits allow the buyer to claim back if the service drops below an agreed standard. That standard needs to be clearly out-lined in an SLA. See p.31 for more details






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