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CIPS L5M3 Practice Test Questions Answers

Exam Code: L5M3 (Updated 120 Q&As with Explanation)
Exam Name: Managing Contractual Risk
Last Update: 03-Jul-2025
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Questions Include:

  • Single Choice: 106 Q&A's
  • Multiple Choice: 14 Q&A's

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    L5M3 Questions and Answers

    Question # 1

    What is a boilerplate clause?

    A.

    the clause that will take precedent if there are conflicting pieces of information within a contract

    B.

    a type of warranty

    C.

    a clause that allows the contract to be modified if both parties are in agreement

    D.

    a set of clauses that are commercially standard and expected in all contracts

    Question # 2

    Alan has an ongoing contract with a supplier for the provision of gardening tools to his horti-culture business. He has been working with the supplier for over 20 years and has recently discovered that the supplier committed a breach in a warranty 3 years ago. Can Alan claim damages?

    A.

    yes- the breach has occurred and a contract is in place

    B.

    yes- Alan can claim damages and rescind the contract

    C.

    no- Alan could only claim if the breach was of a condition, not a warranty

    D.

    no- Alan cannot claim because the breach was so long ago

    Question # 3

    Which of the following will you put into box 7?

    A.

    Mediation

    B.

    Arbitration

    C.

    Litigation

    D.

    Negotiation

    Question # 4

    Which of the following would be included in a contract to assign costs and responsibilities be-tween buyer and seller when products are delivered?

    A.

    Indemnity

    B.

    Liquidated Damages

    C.

    Liability

    D.

    Incoterms

    Question # 5

    Which of the following would not be considered a contract? Select TWO

    A.

    A written agreement between two robbers to rob a bank which states that the money gained would be split evenly between the two.

    B.

    a domestic agreement between two parents about who will pick the kids up from school

    C.

    a phone call between a supplier and buyer in which the buyer agrees to purchase 100 teddy bears from the supplier for £100.

    D.

    a written document in which Paul agrees to clean Freda's house for £10

    E.

    an email chain between a buyer and supplier which includes a PO and Invoice

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