L5M3 practice question 18 of 25

When drafting a liability clause in a contract, which of the following statements are TRUE? Select THREE

Full set: 120 questions
Answer options
A: exclusions should be narrowly defined and clearly state which types of liabilities are excluded Correct answer
B: the goal of the liability clause is to punish the contractor for poor performance
C: liability is a legal responsibility Correct answer
D: liability can only be limited where there is valid insurance
E: liability cannot be excluded for injury resulting from negligence Correct answer
Correct Answer:
A. exclusions should be narrowly defined and clearly state which types of liabilities are excluded; C. liability is a legal responsibility; E. liability cannot be excluded for injury resulting from negligence
Explanation

The correct answers are 1, 3 and 5: exclusions should be narrowly defined and clearly state which types of liabilities are excluded, liability is a legal responsibility and liability cannot be excluded for injury resulting from negligence. These are all explained on p. 22. Liability is never there to publish anyone (this is a red herring answer that CIPS like to put into different questions and it's usually the wrong answer - no one should look to publish anyone else). The option 'Liability can only be limited where there is valid insurance' is not true. A contract can state any limitations on liability so long as it's agreed by both parties, they're fair and don't contradict any laws. The thing about not being able to exclude liability regarding personal injury is a Law in the UK.

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