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Tutu Incorporated has a contract with a software company to provide their IT software. They want to ensure that the supplier pays compensation if there are any issues with service (e.g. the software doesn't work for a day). Which two items would Tutu Incorporated need to include in the contract?
Suggested Answer: C, D
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They should include service credits and a service level agreement. Service Credits allow the buyer to claim back if the service drops below an agreed standard. That standard needs to be clearly out-lined in an SLA. See p.31 for more details
26 comments · newest first
KE
Kerry
2 months ago
True, but having E) insurance might cover unexpected issues too.
MA
Marcos
2 months ago
I feel like A) unliquidated damages could be risky. Hard to quantify.
KA
Katheryn
2 months ago
Agreed! D) service credit is also important. It compensates for downtime.
EF
Effie
3 months ago
I think C) service level agreement is essential. It defines the expected service standards.
MA
Maia
3 months ago
True, but having E) insurance might cover unexpected issues too.
QU
Queen
3 months ago
I feel like A) unliquidated damages could be risky. Hard to quantify.
CA
Candida
3 months ago
Agreed! D) service credit is also important. It compensates for downtime.
TY
Ty
3 months ago
I think C) service level agreement is essential. It defines the expected service standards.
AL
Alfred
4 months ago
E) insurance might help too. Covers unexpected issues.
RO
Rosalind
4 months ago
A) unliquidated damages could be risky. Better to have clear terms.
BU
Buck
4 months ago
Agreed! D) service credit is also important. It compensates for downtime.
LA
Lavonna
4 months ago
I think C) service level agreement is essential. It defines performance expectations.
BE
Belen
4 months ago
Totally agree with the first two options!
CA
Carma
4 months ago
Not sure if insurance really fits here.
PO
Polly
6 months ago
Wait, unliquidated damages? Isn't that a bit risky?
CO
Cordell
6 months ago
I think service credit is also a must.
JO
Josefa
6 months ago
Definitely need a service level agreement!
LU
Lucia
6 months ago
Insurance could also be relevant in this situation.
CA
Cassandra
7 months ago
Wait, can they really enforce that? Seems tricky.
MA
Marva
7 months ago
Service credit is a must for compensation!
EV
Evelynn
7 months ago
Unliquidated damages? Not sure that's the right fit here.
NO
Nobuko
7 months ago
Definitely need a service level agreement!
LA
Lavina
7 months ago
I practiced a similar question, and I think both the service level agreement and service credit would cover Tutu's needs for compensation.
SK
Skye
7 months ago
I feel like unliquidated damages might not be the best choice here since they can be hard to quantify.
AD
Adelina
8 months ago
I'm not entirely sure, but I remember something about service credits being a way to compensate for downtime.
AU
Audry
8 months ago
I think a service level agreement is definitely important to outline the expected performance and remedies for failure.