CIPS L4M3 Exam With Confidence Using Practice Dumps

The contract provision that relieves the parties from performing their contractual obligations when certain circumstances like natural disasters, terrorist attacks, etc arise is called Force majeure. Force majeure is an example of exclusion clause.

An exemption clause in a contract is a term which either limits or excludes a party’s liability for a breach of contract. In order for an exclusion clause to be binding and operable upon the parties, the clause must:

1. The clause must be incorporated into the contract as a term.

2. The clause must pass the test of construction.

3. The clause must not be rendered unenforceable by the statutory provisions in the Unfair Contract Terms Act 1977 or the Consumer Rights Act 2015 (enacting the Consumer Rights Bill 2013-14).

Incentivised pricing is designed to motivate suppliers to meet or exceed performance targets by providing financial or other incentives. In urgent projects, such as constructing a hospital ward during a pandemic, incentivised pricing encourages suppliers to accelerate delivery without compromising on quality. This supports the buyer’s need for speed and reliability.

Liquidated damages are a pre-agreed amount stated in the contract, payable upon a specific breach. These clauses are enforceable if the amount is a genuine pre-estimate of loss and not punitive. In this case, the £5 per tyre is a typical liquidated damages clause as it quantifies the penalty for non-compliance.