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NEW QUESTION 38
A failure to perform a provision of a contract which does not affect the end performance of the contract is known as what?- A. warranty breach
- B. minor breach
- C. small breach
- D. major breach
Answer: B
Explanation:
This is a minor breach. This is the definition as given in the study guide on p. 48
NEW QUESTION 39
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?- A. Terry can sue the retailer for the additional costs incurred above the liquidated damages
- B. Terry can deliver the toys as agreed as there is a contract in place
- C. Terry can apply to the court to increase the liquidated damages to £3000
- D. Terry can do nothing and must pay the additional £2000 out of his own pocket
Answer: 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.
NEW QUESTION 40
Which of the following will you put into box 5?- A. Innominate Term
- B. Condition
- C. Warranty
Answer: B
Explanation:
The correct answers are as follows:
This is a condition as it is fundamental to the contract.
NEW QUESTION 41
In which conflict resolution method is communication predominately written rather than spoken?- A. conciliation
- B. adjudication
- C. negotiation
- D. arbitration
Answer: B
Explanation:
Adjudication is written. The other conflict resolution methods involve talking to the other person, or presenting arguments orally to a judge. See p.77 for more info.
NEW QUESTION 42
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?- A. mediation
- B. litigation
- C. negotiation
- D. arbitration
Answer: D
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.
NEW QUESTION 43
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