CIPS Exam L5M3 Topic 1 Question 45 Discussion

Actual exam question for CIPS's L5M3 exam

Question #: 45
Topic #: 1

When assessing damages caused by a breach, which of the following statements is true?

Adamages are limited to what is stated within the contract

Bdamages can be difficult to assess before a breach has occurred and therefore should be decided through conflict resolution

Cdamages attempt to position the innocent party in the position that they would have been in had the contract been performed as expected

Ddamages attempt to compensate the innocent party for errors made by the offending party

Show Suggested Answer

Suggested Answer: C

The correct answer is: 'damages attempt to position the innocent party in the position that they would have been had the contract been performed as expected'. This is a quote from p. 121 Option1 is incorrect as unliquidated damages aren't stated in a contract. Option 2 is incorrect because liquidated damages are an assessment of damages before a breach. Option 4 is incorrect because not all breaches are caused by errors (they can be caused by negligence or the offending party withholding something).

by Desiree at Jan 15, 2025, 01:29 AM

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13 days ago

I think option C is the correct answer. Damages aim to restore the innocent party to the position they would have been in if the contract had been properly fulfilled.

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