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CIPS Exam L5M3 Topic 2 Question 36 Discussion

Actual exam question for CIPS's L5M3 exam
Question #: 36
Topic #: 2
[All L5M3 Questions]

Logan Gin Distillery is creating a contract for one of its new suppliers. It is a complicated item that they are ordering and if things go wrong, it would have an extremely negative impact on production, and therefore on revenue. However it is impossible to say what the cost of this would be if things were to go wrong. What type of clause should be included in the contract?

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Suggested Answer: C

DEF must deliver the pasta required by ABC is the correct answer. Specific performance is when the innocent party is rewarded by receiving what was initially negotiated - in this case the delivery of pasta. It's basically a posh way of saying that the court mandates you to do what the contract says. See p. 129 for information on Specific Performance.


by Corinne at Sep 11, 2024, 01:56 PM

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Catalina
1 months ago
D) service credit? Really? What is this, a rewards program for bad performance? I'll stick with A) liquidated damages, thank you very much.
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Aide
20 days ago
C) penalty clause might be too harsh, liquidated damages seem more reasonable.
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Tony
22 days ago
B) unliquidated damages could be risky, better to go with a safer choice.
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Shawna
1 months ago
A) liquidated damages are a safer option in case things go wrong.
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Lashaunda
1 months ago
Definitely A) liquidated damages. It's the only way to ensure the distillery is properly compensated if things go sideways. Plus, it's a fancy legal term, so it must be the right answer.
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Delila
2 months ago
Hmm, I'm leaning towards C) penalty clause. That way, the supplier knows there will be serious consequences if they mess up. Gotta keep them on their toes, you know?
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Elvera
6 days ago
D) service credit
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Colene
7 days ago
C) penalty clause
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King
16 days ago
B) unliquidated damages
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Kenny
20 days ago
A) liquidated damages
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Josefa
21 days ago
D) service credit
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Emmett
29 days ago
C) penalty clause
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Stephania
1 months ago
B) unliquidated damages
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Britt
1 months ago
A) liquidated damages
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Vanda
2 months ago
I'm not sure about this one. I was thinking B) unliquidated damages might be the way to go since the impact is so uncertain. But I could be wrong.
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Elouise
2 months ago
I think the answer is A) liquidated damages. This seems like the most appropriate clause to include in the contract since the cost of things going wrong is impossible to predict.
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Rachael
22 days ago
That's true, having a clear clause will help protect both parties involved.
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Michael
1 months ago
I think B) unliquidated damages might also be a good option to consider.
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Marica
1 months ago
It's important to have a clause that specifies the damages in case of any issues.
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Leota
1 months ago
I agree, A) liquidated damages would be the best option in this case.
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Yvette
2 months ago
I disagree, I think we should go for a penalty clause to deter the supplier from breaching the contract.
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Fernanda
2 months ago
I agree with Tracey, having a fixed amount for damages would provide certainty in case of breach.
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Tracey
2 months ago
I think we should include a liquidated damages clause in the contract.
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