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L5M3 Questions and Answers

Question # 6

John has signed a document with Larry that says that he will give Larry his car. Both John and Larry are over the age of 18 and are of sound mind. Larry accepts this offer and signs the document. Is this a contract?

A.

yes- it has been signed

B.

yes- both parties consent and have capacity to do so

C.

no- there is no consideration

D.

no- this document is an invitation to treat

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Question # 7

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

A.

open account

B.

documentary collection

C.

documentary credits

D.

advance payment

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Question # 8

Which of the following will you put into box 7?

A.

liability

B.

payment terms

C.

liquidated damages

D.

Contract variation

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Question # 9

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?

A.

unliquidated damages

B.

letter of credit

C.

service level agreement

D.

service credit

E.

insurance

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Question # 10

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

A.

Intention

B.

Indemnity

C.

Consideration

D.

Liability

E.

Capacity

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Question # 11

Which of the following will you put into box 5?

A.

Condition

B.

Warranty

C.

Innominate Term

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Question # 12

Which of the following will you put into box 8?

A.

Mediation

B.

Arbitration

C.

Litigation

D.

Negotiation

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Question # 13

Which of the following will you put into box 1?

A.

subcontracting

B.

reputational damage

C.

penalty clause

D.

consequential loss

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Question # 14

What is a boilerplate clause?

A.

the clause that will take precedent if there are conflicting pieces of information within a contract

B.

a type of warranty

C.

a clause that allows the contract to be modified if both parties are in agreement

D.

a set of clauses that are commercially standard and expected in all contracts

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Question # 15

Which of the following will you put into box 1?

A.

subcontracting

B.

reputational damage

C.

penalty clause

D.

consequential loss

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Question # 16

Which of the following will you put into box 2?

A.

Payment Term

B.

Time is of the Essence

C.

Subcontracting

D.

Specification

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Question # 17

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?

A.

liquidated damages

B.

limitation of liability

C.

time is of the essence

D.

KPIs

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Question # 18

Which of the following is not a way in which a contract can end?

A.

performance

B.

agreement

C.

litigation

D.

breach

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