CIPS L5M3 Exam Dumps

Get All Managing Contractual Risk Exam Questions with Validated Answers

L5M3 Pack
Vendor: CIPS
Exam Code: L5M3
Exam Name: Managing Contractual Risk
Exam Questions: 120
Last Updated: October 4, 2025
Related Certifications: Level 5 Advanced Diploma in Procurement and Supply
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Free CIPS L5M3 Exam Actual Questions

Question No. 1

Kelly and Chloe have a contract in which Kelly provides MRO supplies to Chloe's manufac-turing business. Kelly has committed a fundamental breach but Chloe has not suffered any loss. Chloe has chosen to terminate the contract. Can she claim damages?

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Correct Answer: C

3 is the correct answer. Damages cannot be claimed is there has not been any loss. This is stated on p. 122


Question No. 2

Logan Gin Distillery is creating a contract for one of its new suppliers. It is a complicated item that they are ordering and if things go wrong, it would have an extremely negative impact on production, and therefore on revenue. However it is impossible to say what the cost of this would be if things were to go wrong. What type of clause should be included in the contract?

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Correct Answer: C

Unliquidated damages would be the best to include as there is no way of identifying a figure for liquidated damages. This would be the safest thing for the buyer to do. P.108 - section on Unliqui-dated Damages.


Question No. 3

Which of these statements about mediation is true? Select TWO

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Correct Answer: A, C

The correct answers are 1 and 3. The other options are false; Mediation does not produce legal precedents- only litigation can do this. Mediation is a cheap dispute resolution option (much cheaper than arbitration or litigation) and the third party has no authority on the matter- they are there as a facilitator of dialogue, not to make a judgement. For more information on mediation see p.74


Question No. 4

Restitution damages are often calculated before contracts are signed and are clearly stated within a contract. Which of the following statements is not true?

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Correct Answer: D

'restitution damages cannot be mitigated by the actions of the innocent party' is the untrue state-ment out of these four. The general principle of Restitution Damages is that the innocent party is expected to be proactive in mitigating the consequences of any breach and should not allow costs to spiral out of control. See p. 124


Question No. 5

Which of the following will you put into box 1?

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Correct Answer: B

The correct answers are as follows:

It's reputational damage as the scenario mentions 'bad press'


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