Parky Parks Ltd has a contract with Slides R Us for the provision of children's playground equipment. The contract contains a clause for liquidated damages and puts the figure at £500k. Which of the following statements is correct? Select TWO

• A.Liquidated damages needs to be a 100% accurate figure
• B.If damages exceed £500k Parky Parks can apply to the courts to get Slides R Us to pay above this amount
• C.Damages under the amount of £500k are not required to be paid to Parky Parks
• D.liquidated damages is a genuine estimate of loss
• E.costs incurred above £500k will be covered by Parky Parks Ltd

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In which conflict resolution method is communication predominately written rather than spoken?

• A.negotiation
• B.adjudication
• C.arbitration
• D.conciliation

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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?

• A.the outcome is binding and enforceable
• B.there are strict rules and processes to follow
• C.the arbitrator's role is to facilitate dialogue
• D.the outcome will set a legal precedent

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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?

• A.unliquidated damages
• B.letter of credit
• C.service level agreement
• D.service credit
• E.insurance

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Which of the following will you put into box 8?

• A.Condition
• B.Warranty
• C.Innominate Term

Correct Answer: C

The correct answers are as follows:

This is a condition. Again the food being organic would be fundamental to the contract as the health of the llamas depend on it.
This is arbitration as it involves a panel.
This is an innominate term as it won't be mentioned in the contract. It won't be until a breach occurs when it is decided whether the issue of subcontracting is a condition or a warranty, and which one it will be, will likely depend on the situation. For example if they subcontract out to a non-organic llama food provider, that would probably be a Condition. If they get help fulfilling an order and the subcontractor is also organic, that's probably a warranty.

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