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CIPS Exam L5M3 Topic 1 Question 43 Discussion

Actual exam question for CIPS's L5M3 exam

Question #: 43
Topic #: 1

[All L5M3 Questions]

Lollypop Manufacturer has a long standing contract with Retailer

AThey are three years into a five year contract and have been providing lollypops at 10p each since the beginning of the contract. Due to changes in the supply chain Lollypop Manufacturer would like a price increase. Can this be done?

Ano- the contract is ongoing for another 2 years

Bno- this would be unfair on the buyer

Cyes- if there is a variation clause and both parties agree

Dyes- prices always go up in contracts

Show Suggested Answer

Suggested Answer: C

yes- if there is a variation clause and both parties agree. This would usually be written in as a 'price adjustment clause' but if it's not, then it could be agreed and signed by both parties as a 'contract variation'. See p.16 for more details

by Alfred at Nov 18, 2024, 12:53 AM

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Isadora

2 days ago

I'm gonna have to go with option C as well. Gotta love those variation clauses, they really come in handy!

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Jarvis

3 days ago

Hah, option D is definitely a trap answer. Prices don't always go up in contracts, that's just silly.

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Theodora

4 days ago

I don't know, I'm thinking option A might be the best answer. The contract is still ongoing, so they can't just change the price unilaterally.

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Casey

15 days ago

That's true, unless there is a variation clause and both parties agree to it.

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Kattie

16 days ago

But the contract is still ongoing for another 2 years, so they might not be able to change the price.

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Casey

1 months ago

I think Lollypop Manufacturer should be able to ask for a price increase.

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Tandra

1 months ago

Option C seems like the way to go here. If there's a variation clause and both parties agree, then a price increase should be allowed.

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Chauncey

6 days ago

Option C seems like the way to go here. If there's a variation clause and both parties agree, then a price increase should be allowed.

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