Question 1

Terry's Toys is a Toy Manufacturer who has an agreement to provide Toys to an online retailer. 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?

Options :

A : Terry can apply to the court to increase the liquidated damages to £3000

B : Terry can sue the retailer for the additional costs incurred above the liquidated damages

C : Terry can deliver the toys as agreed as there is a contract in place

D : Terry can do nothing and must pay the additional £2000 out of his own pocket

Answer: D

Question 2

Which of the following would constitute an offer? Select TWO:

Options :

A : a display in a shop window

B : an advert on a website

C : an auction

D : a bid on an auction

E : a price proposal that is valid for 14 days

Answer: A,D

Question 3

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

Options :

A : Indemnity

B : Liquidated Damages

C : Liability

D : Incoterms

Answer: D

Question 4

Which of the following is not a form of ADR (Alternative Dispute Resolution)?

Options :

A : mediation

B : negotiation

C : arbitration

D : conciliation

Answer: B

Question 5

2021-03-31-15-36-11-0cfaf8452dd7dd756d2fb60fe4b41708

Which of the following will you put into box 2?

Options :

A : subcontracting

B : reputational damage

C : penalty clause

D : consequential loss

Answer: B