Contract Drafting Exercise
Quiz by J Ng
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- Q1
Select the option which contains an Indemnity clause.
The Customer shall not be responsible for any and all claims, damages, liabilities, obligations and costs which may be asserted by a third party against the Customer in connection with any misuse of Intellectual Property rights by the Supplier in connection with the Software.
The Supplier shall hold harmless the Customer from and against any and all claims, damages, liabilities, obligations and costs which may be asserted by a third party against the Customer in connection with any misuse of Intellectual Property rights by the Supplier in connection with the Software.
120s - Q2
Scenario: You resold products bought from a manufacturer which infringed a 3rd party's IP rights. The 3rd party sued you for reselling those products.
Is an indemnity clause in a contract between you and the manufacturer different or similar to simply suing the manufacturer for damages?
Similar.
Both an indemnity clause and damages require you to prove that your loss is foreseeable (not too remote). Both also require the manufacturer to have breached its contract with you (eg. failing to deliver goods).
Different.
Indemnity is a contractual promise by the manufacturer to reimburse you for losses arising from events specified in that clause - eg. you being sued by a 3rd party. To claim under an indemnity, you need not satisfy the 4 criteria (including foreseeable loss).
In contrast, damages can only be claimed if you had suffered loss due to the manufacturer's breach of your contract with it (eg. failing to deliver goods). Damages must satisfy the 4 criteria (including foreseeable loss).
120s - Q3
What is the purpose of the following clause?
This Agreement, together with its appendices, contain the entire understanding of the parties about the subject matter of this Contract and supersede all prior agreements and understandings.
To limit the parties' rights and obligations to what is stated in the written contract + avoid the other party claiming that there were representations made before the contract was signed.
To state clearly that both parties are not liable for damage, cost or harm arising from their negligence or misrepresentations.
120s - Q4
If you accuse the Supplier of breaching the contract or misrepresentation, which clause is not helpful for the Supplier?
Exemption (exclusion) clause
Indemnity clause
Entire Agreement clause
Force Majeure clause
120s - Q5
Which clause is not helpful to the parties to a contract in the event that they are displeased with each other's performance under the contract?
Early Termination clause
Governing Law clause
Entire Agreement clause
Clause which specifies the events which amount to a serious breach
120s - Q6
Which one of the following clause is not required to be fair and reasonable?
Exemption of Liability clause
Liquidated Damages clause
No Sub-Contracting clause
Restraint of Trade clause (eg. exclusive partnership clause between FoodPanda and the restaurants)
120s