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Southwark is negotiating a contract with Orchard to provide software and IT services. Orchard will manufacture and install the products which are contractually supplied by IBM. Southwark's procurement manager is worried that during the contract there would be some problems that they would not able to claim for damages from Orchard. Which of the following should be included in the head contract so that Southward can sue IBM, should the need arise?
Suggested Answer: A
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Advantages of using fixed pricing arrangement are as below:
- Budget/income certainty - prices are fixed up front and should not change
- The impact of changes to the supplier's cost base is not fed through to the purchaser. If costs diminish, the supplier will benefit from this, and if costs rise, the purchaser will benefit
LO 3, AC 3.3
39 comments · newest first
TR
Tresa
11 months ago
Insurance is important, but not for suing IBM directly.
JO
Joni
11 months ago
Negligence won't cover it, they need something stronger.
PE
Percy
12 months ago
Wait, can they really sue IBM like that? Seems tricky.
YO
Youlanda
12 months ago
I think indemnity is the way to go here.
WA
Wai
1 year ago
Definitely need a collateral warranty deed for that!
MA
Marsha
1 year ago
I'm leaning towards insurance as a safety net, but I wonder if it really helps in this specific situation with IBM.
AU
Audry
1 year ago
I feel like negligence could be relevant, but it seems more about proving fault rather than ensuring a claim can be made.
EL
Elsa
1 year ago
I think collateral warranty deeds might be the right choice since they can provide a direct claim against IBM, but I need to double-check that.
AL
Alyce
1 year ago
I remember discussing indemnity clauses in class, but I'm not entirely sure if that's the best option here.
MA
Mari
1 year ago
Okay, I think I've got it. Southwark needs to include an indemnity clause in the contract with Orchard, so they can hold IBM responsible if there are any issues. That seems like the best option.
HA
Hailey
1 year ago
Hmm, I'm a bit confused. Is the issue that Southwark can't sue Orchard, or that they want to be able to sue IBM? I need to re-read the question carefully.
FR
Francine
1 year ago
This is a tricky one. I think the key is to focus on the contract terms that would allow Southwark to sue IBM directly if needed.
NA
Nadine
1 year ago
Indemnity, got it. That makes sense - Southwark wants to make sure they're covered no matter what happens with the Orchard contract. I feel pretty confident about this one.
LA
Laquanda
1 year ago
This looks like a pretty straightforward task, just need to follow the steps carefully.
TI
Tiera
2 years ago
Indemnity? More like 'in-dementia', amirite? These exam questions are really testing our sanity.
WA
Wayne
1 year ago
C) Collateral warranty deed
JA
Jaime
1 year ago
B) Indemnity
RE
Reita
1 year ago
A) Negligence
CA
Candra
2 years ago
Negligence? What is this, a game of find the odd one out? Indemnity is the clear winner here, unless Southwark wants to roll the dice and hope for the best.
JO
Josphine
1 year ago
D) Insurance
CR
Craig
1 year ago
C) Collateral warranty deed
VA
Val
1 year ago
B) Indemnity
PH
Phuong
1 year ago
A) Negligence
TO
Tomoko
2 years ago
Insurance? Really? That's like trying to put a band-aid on a broken leg. Indemnity is the way to go, hands down.
MO
Mona
1 year ago
D) Insurance
ME
Merissa
1 year ago
C) Collateral warranty deed
JO
Josephine
1 year ago
B) Indemnity
VA
Vanda
2 years ago
A) Negligence
LI
Lisha
2 years ago
I believe negligence should also be included, just to cover all bases.
SA
Samuel
2 years ago
I'm not sure about the collateral warranty deed, that sounds a bit shady. Better stick with the classic indemnity clause.
GE
Gearldine
2 years ago
Yeah, it's better to have that protection in place just in case.
MU
Muriel
2 years ago
I agree, the indemnity clause is a safer option.
HE
Helga
2 years ago
I agree with Twana. Indemnity will protect us in case of any damages.
AN
Antonio
2 years ago
Indemnity seems like the obvious choice here. If Southwark can't claim damages from Orchard, they need a way to go after IBM directly.
RA
Raul
1 year ago
D) Insurance
MA
Margarita
1 year ago
C) Collateral warranty deed
ST
Stephen
2 years ago
B) Indemnity
NY
Nydia
2 years ago
A) Negligence
TW
Twana
2 years ago
I think we should include indemnity in the head contract.