QUESTION 12
Harry is negotiating a contract for a new IT system for his business. He is investing heavily in the system and wants the system to be able to provide the services he requires for the next 10 years. However he is aware that technology is changing quickly and would like to include a clause in the contract to ensure that the system he is purchasing is useable for the next 10 years. What should Harry include in the contract?

QUESTION 13
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?

QUESTION 14
Which of the following will you put into box 5?

QUESTION 15
Robert has a contract with Farmer Ted who provides his manufacturing firm with potatoes. There is a contract in place, signed by both parties that Ted will deliver 2 tonnes of potatoes per week. Due to changes in demand, Robert would like Ted to start providing 3 tonnes of potatoes every three weeks. What must be in place for this change to occur?

QUESTION 16
Tyrone Enterprises has just come out of a meeting with one of its suppliers Bob. The meeting has not gone well and the contract has become frustrated. What does this mean?

QUESTION 17
Sam is a factory manager and has purchased a new fixed asset on a loan purchase agreement. There is a forbearance agreement between the Factory and the provider. What does this mean?

QUESTION 18
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?

QUESTION 19
Which of the following would be included in a contract to assign costs and responsibilities be-tween buyer and seller when products are delivered?

QUESTION 20
Verity Fashion is a clothing manufacturer and has an order to create 10,000 pairs of flipflops for a retailer for the summer. The order was placed over the phone in February. The order has been completed and has been boxed up ready for delivery. The retailer calls Verity Fashion in June and says that the order is no longer required. What action can Verity Fashion take?

QUESTION 21
Which of the following statements about penalty clauses is not true?

QUESTION 22
Derrek owns a factory and employs a Facilities Management Company called Balls FM to look after certain aspects of the factory including cleaning and testing the machinery to ensure they are in good working condition. One day he realises that one of the cleaners doesn’t work for Balls FM, he works for another company called Bells FM. Which of the following statements regarding subcontracting is true?

QUESTION 23
Where two parties are engaged in international trade and have a long term relationship and a degree of mutual trust, which payment mechanism is commonly used?

QUESTION 24
Which of the following will you put into box 8?

QUESTION 25
Lollypop Manufacturer has a long standing contract with Retailer A.
They are three years into a five year contract and have been providing lollypops at 10p each since the beginning of the contract. Due to changes in the supply chain Lollypop Manufacturer would like a price increase. Can this be done?

QUESTION 26
Which of the following will you put into box 6?

QUESTION 27
John has signed a document with Larry that says that he will give Larry his car. Both John and Larry are over the age of 18 and are of sound mind. Larry accepts this offer and signs the document. Is this a contract?

QUESTION 28
Which of the following will you put into box 8?

QUESTION 29
Which of the following statements about ‘Specific Performance’ are TRUE? Select TWO.

QUESTION 30
Which of the following will you put into box 5?

QUESTION 31
A breach which is so severe that it goes to the root of the contract is known as what?

QUESTION 32
Fruity McFruitFace is an exporter of fruit. Which of the following payment terms would be most advantageous for it?

QUESTION 33
Buyer A and Supplier B have had a disagreement regarding a breach in the contract. They are looking to resolve the issue via arbitration. Which of the following is true about arbitration?