CIPS Exam L5M3 Topic 3 Question 44 Discussion

Actual exam question for CIPS's L5M3 exam

Question #: 44
Topic #: 3

[All L5M3 Questions]

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

ATerry can apply to the court to increase the liquidated damages to 3000

BTerry can sue the retailer for the additional costs incurred above the liquidated damages

CTerry can deliver the toys as agreed as there is a contract in place

DTerry can do nothing and must pay the additional 2000 out of his own pocket

Show Suggested Answer

Suggested Answer: C

DEF must deliver the pasta required by ABC is the correct answer. Specific performance is when the innocent party is rewarded by receiving what was initially negotiated - in this case the delivery of pasta. It's basically a posh way of saying that the court mandates you to do what the contract says. See p. 129 for information on Specific Performance.

by Martina at Dec 10, 2024, 06:53 AM

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Silva

5 hours ago

Terry should sue the retailer for the additional costs.

upvoted 0 times

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