CCNP Risk Assessment & Conflict Resolution 4

Question 1

A multinational contract is silent on governing law. What conflict risk does this silence create?

Accepted Answer

Parties may litigate in multiple jurisdictions with conflicting outcomes

Answer

Without a governing law clause, each party may invoke their home country's courts, leading to parallel proceedings and potentially contradictory rulings.

Question 2

Which contract clause protects a buyer when a seller's intellectual property used in project deliverables is later found to infringe third-party patents?

Accepted Answer

IP indemnification clause

Answer

An IP indemnification clause requires the seller to defend and compensate the buyer against third-party IP infringement claims arising from the deliverables.

Question 3

In contract risk assessment, 'residual risk' refers to:

Accepted Answer

The remaining risk after mitigation measures have been applied

Answer

Residual risk is what remains after applying controls and mitigations; it must be accepted, monitored, or addressed with additional measures.

Question 4

A contract negotiation team discovers mid-negotiation that a key factual assumption underlying the deal is incorrect. Under contract law, what doctrine might apply?

Accepted Answer

Doctrine of mutual mistake

Answer

Mutual mistake occurs when both parties share a false assumption about a fundamental fact, which may allow rescission or reformation of the contract.

Question 5

What is the purpose of a 'step-in right' clause in a contract?

Accepted Answer

It allows a third party to assume contract performance if the primary party defaults

Answer

A step-in right clause enables the buyer or a designated party to take over performance from a defaulting contractor to prevent project failure.

(CCNP) Certified Contract Negotiation Professional Practice Test

(CCNP) Certified Contract Negotiation Professional Practice Test

CCNP Risk Assessment & Conflict Resolution 4