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CIPS L5M3 Exam - Topic 2 Question 67 Discussion

Popsi Cula is a manufacturer of sugared beverages and produces over 5000 tonnes of soda each day. It is extremely important that ingredients are delivered to the factory on specific days in order for the production to keep to its very tight schedule. Popsi Cula is onboarding a new supplier - which of the following clauses would it be important for the contract to contain?
C) time is of the essence
A) liquidated damages
B) limitation of liability
D) KPIs

CIPS L5M3 Exam - Topic 2 Question 67 Discussion

Actual exam question for CIPS's L5M3 exam
Question #: 67
Topic #: 2
[All L5M3 Questions]

Popsi Cula is a manufacturer of sugared beverages and produces over 5000 tonnes of soda each day. It is extremely important that ingredients are delivered to the factory on specific days in order for the production to keep to its very tight schedule. Popsi Cula is onboarding a new supplier - which of the following clauses would it be important for the contract to contain?

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Suggested Answer: C

A Time is of the Essence Clause should be included. This stresses the importance of obligations being completed on time, with any delays (e.g. in delivery of ingredients) being treated as a breach of a condition. The other three options are probably important to have in a contract, but don't relate specifically to this example. See p.45 for more information on Time is of the Essence Clauses


by Titus at May 31, 2026, 04:58 AM

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Karon
4 days ago
I prefer D) KPIs. They help track supplier performance.
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Nelida
9 days ago
A) liquidated damages could also be important for penalties.
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Malcom
14 days ago
Exactly! Delays could mess up the whole schedule.
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Nelida
19 days ago
Agreed! Timely delivery is key for production.
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Malcom
25 days ago
I think C) time is of the essence is crucial.
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Abel
30 days ago
Limitation of liability might be tricky, not sure if it's necessary.
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Rachael
1 month ago
Totally agree with the need for liquidated damages too!
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Tayna
1 month ago
Wait, 5000 tonnes a day? That seems like a lot!
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Ashlee
2 months ago
I think KPIs are also super important for tracking performance.
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Emmanuel
2 months ago
Definitely need "time is of the essence" for sure!
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Kimberlie
2 months ago
Limitation of liability seems less relevant compared to the urgency of timely deliveries, but I could be wrong.
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Justine
2 months ago
I feel like KPIs could be relevant too, but I'm not clear on how they would apply in this situation.
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Shay
2 months ago
I'm not entirely sure, but I remember something about liquidated damages being important for delays.
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Phillip
2 months ago
I think "time is of the essence" is crucial here since they need ingredients delivered on specific days.
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