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CIPS Exam L5M3 Topic 3 Question 44 Discussion

Actual exam question for CIPS's L5M3 exam
Question #: 44
Topic #: 3
[All L5M3 Questions]

Terry's Toys is a Toy Manufacturer who has an agreement to provide Toys to an online re-tailer. The retailer has ordered 500 toys from Terry and Terry has incurred costs of 3000 manufacturing the toys. Halfway through production the retailer calls Terry to cancel the order. Terry reads through the contract and sees a liquidated damages clause of 1000. What should Terry do?

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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 Martina at Dec 10, 2024, 06:53 AM

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Leila
1 months ago
Haha, Option D - paying out of his own pocket? Terry should definitely not do that. What a bummer for him!
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Royal
3 days ago
B) Terry can sue the retailer for the additional costs incurred above the liquidated damages
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Latonia
7 days ago
A) Terry can apply to the court to increase the liquidated damages to 3000
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Justa
1 months ago
This is a tricky one. I can see the appeal of Option A, but increasing the liquidated damages might be a stretch. Hmm, tough call.
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Tamie
11 days ago
In that case, Terry might have to deliver the toys as agreed to fulfill the contract.
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Noah
13 days ago
But what if the court doesn't agree to increase the liquidated damages to cover the full cost?
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Mitzie
15 days ago
I think Terry should go with Option B and sue the retailer for the additional costs.
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Felice
2 months ago
I'm not sure, but I think Option B might be the best choice. Terry should try to recoup the additional costs incurred above the liquidated damages.
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Golda
14 days ago
Then Terry might have to deliver the toys as agreed and take the loss.
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Willetta
1 months ago
But what if the court doesn't allow Terry to increase the liquidated damages?
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Helaine
1 months ago
I think Terry should definitely sue the retailer for the extra costs.
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Claudia
2 months ago
Option C seems like the logical choice. If there's a contract in place, Terry should deliver the toys as agreed.
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Lorrie
15 days ago
That's true, but the contract is still in place.
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Casie
28 days ago
He can sue the retailer for the additional costs above the liquidated damages.
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Catarina
1 months ago
But what about the extra costs he incurred?
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Lai
1 months ago
I think Terry should deliver the toys as agreed.
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Valene
2 months ago
Terry can apply to the court to increase the liquidated damages.
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Louis
2 months ago
I think Terry should deliver the toys as agreed.
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Silva
2 months ago
Terry should sue the retailer for the additional costs.
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