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CIPS L4M3 Exam - Topic 7 Question 14 Discussion

Actual exam question for CIPS's L4M3 exam
Question #: 14
Topic #: 7
[All L4M3 Questions]

Cleveland Insurance (Cleveland) offers a range of insurance services. The main software used in the call centre is a customer relationship management (CRM) system. Cleveland perceived an urgent need to replace the existing CRM system to deal with the increasing number of customers and services.

Urgent Digital Ltd (Digital) is one of the bidders of Cleveland's ITT. Its bid team is led by Hank Irvine, its technical director. Hank realises that winning the Cleveland contract (valued at approximately 50M) will enhance his career. During discussions with Cleveland, Hank offers certain assurances regarding timescales for the project. He has not carried out any investigations into the viability of the timescales. Hank has little idea whether the timescales can be met.

Cleveland decides that Digital's bid meets with its requirements, especially given the assurances in timescale offered by Hank, and decides to proceed with it, subject to a formal contract. Eventually, a formal contract is signed by both parties. The initial assurances given by Hank about the timing of the project are never going to be achieved and are at best grossly exaggerated.

Hank's pre-contractual assurance is most likely to be an example of which of the following?

Show Suggested Answer Hide Answer
Suggested Answer: C

Hank's pre-contractual assurances may amount to misrepresentation. Fraudulent misrepresentation is a strong possibility since Hank had carried out no investigations into the viability of the project timescales. This could amount to recklessness in using information without taking any steps to see if it is true or not.

The scenario above was constructed based on the case BSkyB v EDS, a famous case in IT sector.

LO 1, AC 1.2


Contribute your Thoughts:

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Glory
4 months ago
Wow, a $50M contract and no due diligence? That's surprising!
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Adelle
4 months ago
I think it's just an inaccuracy in communication, not fraud.
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Rosalind
4 months ago
Wait, how can he assure timelines without any research?
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Horace
4 months ago
Definitely a case of fraudulent misrepresentation!
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Rene
4 months ago
Sounds like Hank really overpromised on those timescales.
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Belen
5 months ago
I feel like this is a tricky one. The fact that Hank didn't check the viability makes me lean towards fraudulent misrepresentation, but I wonder if it could also be seen as initial impossibility since he set unrealistic expectations.
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Weldon
5 months ago
I'm a bit confused here. Could it be just an inaccuracy in communication? I mean, he might not have intended to deceive Cleveland, but he definitely misled them.
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Cecily
5 months ago
This reminds me of a practice question we did about misrepresentation. I think Hank's exaggeration about the timescales could be considered fraudulent misrepresentation since he knew he hadn't investigated it.
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Julian
5 months ago
I remember we discussed how pre-contractual assurances can lead to misrepresentation claims. I think Hank's situation might fall under that, but I'm not sure if it's fraudulent or just an inaccuracy.
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Goldie
5 months ago
I'm a bit confused on how the dot1p and DSCP values get translated here. I'll need to double-check the VPLS QoS policies to understand the marking behavior.
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Leana
5 months ago
This seems pretty straightforward. I'd go with option A - making sure my team is aware of the requirement. That way everyone is on the same page and we can avoid any issues with sensitive information getting out.
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Maryann
5 months ago
Okay, I think I've got this. The question is asking about situations where the valuation date itself is an issue that the court has to resolve. In those cases, the appraiser has to be ready to provide valuations for multiple potential dates, since they won't know the final decision until after the judgment. I'm feeling pretty confident about this one.
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Wendell
5 months ago
I feel pretty confident that the answer is B. Principles, policies and frameworks are what take the high-level desired behaviors and turn them into the specific guidance that people can actually follow. The other options don't seem to directly address that translation piece.
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