CIPS L5M3 Exam - Topic 1 Question 28 Discussion

Actual exam question for CIPS's L5M3 exam

Question #: 28
Topic #: 1

[All L5M3 Questions]

Parky Parks Ltd has a contract with Slides R Us for the provision of children's playground equipment. The contract contains a clause for liquidated damages and puts the figure at 500k. Which of the following statements is correct? Select TWO

ALiquidated damages needs to be a 100% accurate figure

BIf damages exceed 500k Parky Parks can apply to the courts to get Slides R Us to pay above this amount

CDamages under the amount of 500k are not required to be paid to Parky Parks

Dliquidated damages is a genuine estimate of loss

Ecosts incurred above 500k will be covered by Parky Parks Ltd

Show Suggested Answer

Suggested Answer: D

'restitution damages cannot be mitigated by the actions of the innocent party' is the untrue state-ment out of these four. The general principle of Restitution Damages is that the innocent party is expected to be proactive in mitigating the consequences of any breach and should not allow costs to spiral out of control. See p. 124

by Gayla at May 18, 2024, 03:02 PM

Limited Time Offer

25%

Off

Get Premium L5M3 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Elfrieda

3 months ago

Costs above 500k are on Parky Parks, right? Sounds off.

upvoted 0 times

...

Kris

3 months ago

If damages exceed 500k, they can't get more? That's weird.

upvoted 0 times

...

Margurite

3 months ago

Wait, can they really only claim up to 500k?

upvoted 0 times

...

Willard

4 months ago

Totally agree, it's just an estimate of loss!

upvoted 0 times

...

Mayra

4 months ago

Liquidated damages don't have to be 100% accurate.

upvoted 0 times

...

Mollie

4 months ago

I’m pretty sure that if damages are under 500k, they still need to be paid, so option C doesn't seem correct to me.

upvoted 0 times

...

Eugene

4 months ago

I practiced a similar question where we had to determine if a liquidated damages clause was enforceable. I feel like option B might be misleading.

upvoted 0 times

...

Sharita

4 months ago

I think option D sounds right because liquidated damages should reflect a genuine estimate of loss, but I'm a bit confused about the other options.

upvoted 0 times

...

Lynsey

5 months ago

I remember discussing liquidated damages in class, but I'm not sure if they need to be exactly accurate.

upvoted 0 times

...

Keva

5 months ago

Based on my understanding, the liquidated damages clause means Parky Parks can recover up to 500k, but they don't have to prove the exact amount of their loss. Anything above 500k would need to be claimed separately.

upvoted 0 times

...

Fabiola

5 months ago

The tricky part is understanding how liquidated damages work in relation to the actual damages. I'll need to review my notes on that before selecting the right answers.

upvoted 0 times

...

Jarod

5 months ago

I'm pretty confident that liquidated damages don't need to be an exact figure, as long as it's a genuine pre-estimate of the potential loss. And if the actual damages exceed 500k, Parky Parks can't recover more than that amount.

upvoted 0 times

...

Hermila

5 months ago

Okay, let's think this through. The contract specifies a liquidated damages figure of 500k, so that's likely the correct amount Parky Parks can recover. I'm not sure about the other statements though.

upvoted 0 times

...

Cassandra

5 months ago

This question seems straightforward, but I want to make sure I understand the key points about liquidated damages before selecting my answers.

upvoted 0 times

...

Camellia

5 months ago

Hmm, this is a tricky one. I'm not entirely sure which option is the correct answer, but I'll try to break down the question and eliminate the options that don't seem to fit.

upvoted 0 times

...

Kati

5 months ago

I remember studying about different instance types in ACK, but I'm not completely sure about GPU instances being mentioned.

upvoted 0 times

...

Luke

5 months ago

This is tricky. The metrics don't all point to the same conclusion. I'll need to carefully consider the tradeoffs and think about the company's priorities to make the best recommendation.

upvoted 0 times

...

Lonna

5 months ago

I'm leaning towards the Application Gateway option. It seems like it could handle the load balancing and routing requirements, and it might be a better fit than a public load balancer since the users are accessing through VPNs. But I'm still a bit unsure, so I'll need to double-check the details.

upvoted 0 times

...

Tatum

10 months ago

I'm surprised Slides R Us didn't include a clause for 'Extreme Playground Damage' - you know, in case the kids take things a little too far and demolish the whole place. Gotta cover all your bases in these contracts!

upvoted 0 times

Erasmo

9 months ago

User 3: Liquidated damages is a genuine estimate of loss, right?

upvoted 0 times

...

Corazon

9 months ago

User 2: Yeah, they need to cover all possibilities in the contract

upvoted 0 times

...

Annamaria

9 months ago

User 1: I think they should have included that clause for 'Extreme Playground Damage'

upvoted 0 times

...

Yoko

10 months ago

This is easy - A and D are the correct answers. Liquidated damages don't have to be 100% accurate, but they do need to be a reasonable estimate. Anything above 500k is still owed, and Parky Parks can't just pocket the difference if it's less. Common sense, really.

upvoted 0 times

Fabiola

9 months ago

B) If damages exceed 500k Parky Parks can apply to the courts to get Slides R Us to pay above this amount

upvoted 0 times

...

Gregg

10 months ago

Exactly, A and D are the correct answers. It's all about reasonable estimates.

upvoted 0 times

...

Janine

10 months ago

D) liquidated damages is a genuine estimate of loss

upvoted 0 times

...

Nadine

10 months ago

A) Liquidated damages needs to be a 100% accurate figure

upvoted 0 times

...

Mable

10 months ago

I'm going with D and B. The 500k figure is a genuine estimate, but if the actual damages exceed that, Parky Parks can go to court to get the extra amount. Trying to avoid paying anything under 500k is just silly.

upvoted 0 times

Goldie

9 months ago

Yes, that's right. It's important to understand the terms of the contract and not try to avoid paying damages under 500k.

upvoted 0 times

...

Estrella

9 months ago

I agree, D and B are the correct statements. The 500k is just an estimate, and Parky Parks can go to court if damages exceed that.

upvoted 0 times

...

Refugia

10 months ago

I'm not sure about that. I think it's A and B. The damages need to be accurate and Parky Parks can apply to the courts if it exceeds 500k.

upvoted 0 times

...

King

11 months ago

B and C are definitely wrong. The whole point of liquidated damages is to have a predetermined amount that has to be paid, regardless of the actual loss. Anything above 500k would still be owed.

upvoted 0 times

...

Glenn

11 months ago

I think A and D are correct. Liquidated damages need to be a reasonable estimate of the potential loss, not an exact figure. Anything above 500k would still need to be paid, as it's a predetermined amount.

upvoted 0 times