CIPS L5M3 Exam Practice Test Instant Access

Question 1

Which of the following conflict resolution styles involves a strict timeline and is commonly used within the construction industry?

Aconciliation

Badjudication

Carbitration

Dlitigation

Answer : B

Adjudication has strict timescales (this is one of the advantages of using this conflict resolution method). It has roots in the construction industry and has been widely used since the 1990s. See p.76 for more information

Question 2

Conciliation differs from mediation in which of the following ways?

Amediation is voluntary and conciliation is mandatory

Bmediation is cheaper than conciliation

Cthe outcome of mediation is not binding and the outcome of conciliation is binding

Dthe mediator has no decision making power but a conciliator can provide recommen-dations

Answer : D

The true statement is 'the mediator has no decision making power but a conciliator can provide recommendations'. The other statements are false; both processes are voluntary, cheap and non-binding.

Question 3

A failure to perform a provision of a contract which does not affect the end performance of the contract is known as what?

Asmall breach

Bminor breach

Cmajor breach

Dwarranty breach

Answer : B

This is a minor breach. This is the definition as given in the study guide on p. 48

Question 4

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

Aonly future obligations of the parties are excused and discharged

Ball obligations of the innocent party are excused and discharged

Call obligations of the offending party are excused and discharged

Donly past obligations of the parties are excused and discharged

Answer : A

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 5

When drafting a liability clause in a contract, which of the following statements are TRUE? Select THREE

Aexclusions should be narrowly defined and clearly state which types of liabilities are excluded

Bthe goal of the liability clause is to punish the contractor for poor performance

Cliability is a legal responsibility

Dliability can only be limited where there is valid insurance

Eliability cannot be excluded for injury resulting from negligence

Answer : A, C, E

The correct answers are 1, 3 and 5: exclusions should be narrowly defined and clearly state which types of liabilities are excluded, liability is a legal responsibility and liability cannot be excluded for injury resulting from negligence. These are all explained on p. 22. Liability is never there to publish anyone (this is a red herring answer that CIPS like to put into different questions and it's usually the wrong answer - no one should look to publish anyone else). The option 'Liability can only be limited where there is valid insurance' is not true. A contract can state any limitations on liability so long as it's agreed by both parties, they're fair and don't contradict any laws. The thing about not being able to exclude liability regarding personal injury is a Law in the UK.

Question 6

Which of the following must a legally binding contract contain? Select THREE

AIntention

BIndemnity

CConsideration

DLiability

ECapacity

Answer : A, C, E

Intention, Consideration and Capacity are the correct answers. A contract must contain 5 elements to be legally binding. As well as these three, the other two factors are offer and acceptance. P.2 of the study guide.

Question 7

Which of the following processes is the most adversarial?

Amediation

Blitigation

Cadjudication

Dnegotiation

Answer : B

Litigation is the most adversarial. It's usually the last resort and shouldn't be used if you want to preserve the working relationship. P. 145

CIPS L5M3 Managing Contractual Risk Exam Practice Test