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: February 23, 2026
Related Certifications: Level 5 Advanced Diploma in Procurement and Supply
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Free CIPS L5M3 Exam Actual Questions

Question No. 1

Which of the following must a legally binding contract contain? Select THREE

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Correct Answer: A, C, E

Intention, Consideration and Capacity are the correct answers. A contract must contain 5 elements to be legally binding. As well as these three, the other two factors are offer and acceptance. P.2 of the study guide.


Question No. 2

Tutu Incorporated has a contract with a software company to provide their IT software. They want to ensure that the supplier pays compensation if there are any issues with service (e.g. the software doesn't work for a day). Which two items would Tutu Incorporated need to include in the contract?

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Correct Answer: C, D

They should include service credits and a service level agreement. Service Credits allow the buyer to claim back if the service drops below an agreed standard. That standard needs to be clearly out-lined in an SLA. See p.31 for more details


Question No. 3

Which of the following will you put into box 3?

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Correct Answer: B

The correct answers are as follows:

This is a fundamental breach. The key here is the scenario says 'huge issue'. Out of the four scenarios this one is the most important / serious and therefore will be the fundamental breach.


Question No. 4

Which of the following is a source of breach in a contract?

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Correct Answer: A

Negligence can be a source of a breach. P.42


Question No. 5

Kranky Kat Ltd has just been through an adjudication process with a supplier it worked with who committed a breach in the contract. Kranky Kat is not happy with the outcome of the adjudication, what can Kranky Kat do?

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Correct Answer: B

If you're not happy with the decision of an adjudication you can appeal the decision. So option 2 is correct. If the appeal is turned down then unfortunately there's not much more you can do as adjudication is binding and legally enforceable. See p. 143 for more info on adjudication


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