CIPS Exam Report for Learner Community:

CIPS Exam Report for Learner Community: Qualification: Professional diploma in procurement and supply Unit: PD6 - Legal aspects in P&S (UK) Exam series: Nov 2016 Each element of a question carries equal weighting unless otherwise stated. Question 1 Learning Outcome 1 (a) Describe the TWO Uniform Laws under the Vienna Convention on Contracts for the International Sales of Goods (b) Contract formation may involve a tendering process. Explain the collateral legal obligations that arise from a tendering process 10 marks 15 marks Learning outcome addressed: 1.1 Command word explanation Explain give reasons for or account for something For part (a), answers recognised one aspect of the Vienna Convention related to rules concerning contract formation and a separate aspect related to the rules concerning international trade in goods. Good answers described some of the rules relating to contract formation. These included the duration and revocability of offers and the effect of attempts to add or change terms in an acceptance. Good content on the Uniform law on Sales included the seller s obligations regarding quality of goods, ownership and the timing and place of delivery. The buyer s main obligations of acceptance and payment was often included. In terms of part(b), good content explained the collateral tendering obligations and included an explanation of some of the obligations such as duty to consider all compliant tenders and equal and timely access to information. Useful case law includes Blackpool Aero Club v Blackpool Borough Council and R v National Lottery Commission. For part (a), merit answers provided more detail on the Convention. This could have included the CISG allowing the parties to avoid choice of law issues or the additional remedies in cases of non-performance. Strong answers might also have referred to the buyer s obligations to take delivery, examine delivered goods and give notice of any claimed for lack of conformity. The overriding obligation of the buyer to pay was also mentioned. For part (b), additional content included the implied collateral obligation not to withdraw an offer during the NOV 16 SERIES_PD6 UNIT_EXAM REPORT _LEARNER_COMMUNITY_FV 1/5

consideration period normally stated in the invitation to tender, equal treatment; the duty of good faith and the obligation to keep the bid open if requested. Other obligations were also discussed including the awarding of the tender to the lowest bidder where this is stated in the tender documents. For part (a), poorer answers failed or made limited reference to the content of the two parts of the Convention. Many incorrect responses read international sale of goods to mean the implied terms of the Sale of Goods Act 1979(as amended). Others explained Incoterms and therefore failed to address the question. In part (b), poor answers tended to discuss tendering generally rather than focus on collateral obligations. Others referred to the Public Contract Regulations 2015 which was not the subject area of the question. Part (a) was not answered well and many candidates struggled to answer the question. For part (b), answers were slightly better with most candidates referring to at least some of the relevant collateral obligations in the tendering process. Question 2 Learning Outcome 2 (a) (b) Describe how the concept of contra proferentem relates to exclusion clauses in a contract. In order to be valid an exclusion clause must pass two separate tests (common law and statutory test). Explain these tests supporting your answer with reference to relevant case law and legislation. Learning outcome addressed: 2.1 Command word explanation Explain give reasons for or account for something 5 marks 20 marks For part (a), good content included an explanation of the common law test requiring a clause to be clear and concise. Also a description of the meaning of the contra proferentem rule. The explanation often highlighted that if the court finds the clause ambiguous or could have more than one meaning then it determines which party inserted the clause and interprets it in favour of the other party. For part (b), good content included a definition of an exclusion clause and an explanation of some of the common law rules applicable to such clauses. This included the need for the clause to be incorporated into the contract. There was also discussion of the statutory tests under the Unfair Contract Terms Act 1977. In a good answer, some inclusion of appropriate cases was included. NOV 16 SERIES_PD6 UNIT_EXAM REPORT _LEARNER_COMMUNITY_FV 2/5

For part (a), strong answers discussed the contra proferentem rule in more detail and offered a suitable case or practical example of ambiguous wording. For part (b), strong answers explained both the both common law and statutory tests in more detail including specific provisions of the Unfair Contract Terms Act (UCTA) like the Schedule 2 guidelines e.g. the bargaining power of the parties. Strong answers were also able to provide relevant case law examples. For part (a) poor content failed to explain the meaning of the rule and used information more appropriate to part (b). In part (b), many candidates did refer to the exclusion of liability for death and or personal injury but failed to link this to the law of negligence. Also there was no reference to excluding of the implied terms of the Sale of Goods Act 1979(as amended) Part (a) proved to be a tough question for many candidates, with some candidates scoring zero marks, including some blank responses. It ought to be noted however, that some of these candidates, were aware of the concept as they referred to courts interpreting against ambiguous exclusion clauses in part b of the question for which credit was latterly awarded. In part (b), many candidates made reference to Olley v Marlborough and could correctly explain the core importance of the case, and also made reference to the UCTA and that clauses need to be fair and reasonable. One weak area was the lack of case law e.g. L'Estrange v Graucob, Curtis v Chemical Cleaning Co, Chapelton v Barry UDC, Thornton V Shoe Lane Parking or similar cases. A significant majority of candidates did not refer to any of the factors listed in Schedule 2 of UCTA 1977. NOV 16 SERIES_PD6 UNIT_EXAM REPORT _LEARNER_COMMUNITY_FV 3/5

Question 3 Learning Outcome 3 Intellectual property protection involves granting exclusivity to the rights holder in relation to protected property. Analyse the different types of intellectual property rights that exist. 25 marks Learning outcome addressed: 3.1 Command word explanation Analyse assess a topic together with thoughts and judgements about it Good answers were able to recognise the main types of intellectual property right (IPR) that exist. It would contain reasonable descriptions of patents, copyright, registered and unregistered design right and trademarks. The content included reference to the duration of the right and the criteria necessary to establish the right. A good approach also referred to the different remedies that may be available for breach of an IPR. For merit or distinction answers, each right was identified and analysed in terms of its relevance to inventions, artistic works, designs etc. Strong answers also included relevant statutes that might apply. There would also be evidence of case law and/or practical examples. Exceptional answers were able to distinguish between registered and unregistered rights and the different forms of design right. Some really strong candidates were also able to discuss and analyse the tort of passing-off and breach of confidence. Poor content failed to analyse and provide sufficient depth of detail on the different IPR. Answers also failed to provide practical examples, relevant case law or relevant statutes. Also poor content only referred to a few of the rights that exist. Poor answers also failed to distinguish between registered and unregistered design rights and also confused the expiry period for some or all of the IPR. The question was answered well by many candidates. This demonstrates that candidates had studied this area well and had a good in-depth knowledge of IPR. It should be noted that a significant number of candidates discussed contractual clauses rather than IPR. References to confidentiality clauses, nondisclosure agreements and even gardening leave were common but attracted few marks. NOV 16 SERIES_PD6 UNIT_EXAM REPORT _LEARNER_COMMUNITY_FV 4/5

Question 4 Learning Outcome 4 Analyse the following methods of resolving commercial disputes: i. Litigation (10 marks) ii. Arbitration (10 marks) iii. Adjudication ( 5 marks) 25 marks Learning outcome addressed: 4.3 Command word explanation Analyse assess a topic together with thoughts and judgements about it Good content included in-depth details on each of the dispute resolution methods. A good approach provided advantages and disadvantages of each method. In terms of litigation, this often included that it is a dispute method of last resort, its adversarial nature; the cost and adverse publicity and the length of time it takes. A good answer might also provide a reason for litigation like legal certainty. In terms of Arbitration, some advantages might have included the ability to choose your own arbitrator and that there is still a need for some legal compliance. For adjudication, less detail was required. Good answers defined this method and focussed on the fact that a specialist could determine the case based on the facts and not restricted by legal rules. Examples where adjudication is commonly-used were provided e.g. construction. Stronger answers provided more detail on the different methods of dispute resolution. In terms of litigation, references were made to the impartiality of the method, the dangers of reputational damage and the problems of different jurisdictions if it was an international dispute. For arbitration, stronger answers were able to explain further legal issues like the Arbitration Act 1996 and the significance of a Scott v Avery clause in the contract. For adjudication, strong answers recognised it was a method which relies heavily on industry expertise. Very few failed to achieve a good grade for this question. The few who scored low marks was mainly due to confusing each of the methods and/or failing to mention even the basic advantages and disadvantages of each method. This question was by some margin, the highest scoring question of the paper, with the overwhelming majority achieving at least a pass mark. Most candidates knew that litigation was a public adversarial last resort method. Most candidates were aware that an arbitrator may resolve a dispute via a legally-binding decision and that it could potentially be escalated to further litigation. Fewer noted that this only occurs for significant point of law issues. Adjudication proved hit and miss for many candidates with too many candidates failing to sufficiently differentiate arbitration from adjudication. NOV 16 SERIES_PD6 UNIT_EXAM REPORT _LEARNER_COMMUNITY_FV 5/5