Exam L5M3 Topic 1 Question 2 Discussion

Actual exam question for CIPS's L5M3 exam
Question #: 2
Topic #: 1
A large financial organisation ensures that they have contracts with all of their suppliers. In which instance would indemnity not necessarily form part of the contract?

Suggested Answer: D Vote an answer

Indemnity isn't usually used for confidentiality agreements - this is stated on p.21 of the study guide. This is because it's hard to indemnify against- you don't know what the consequence of a breach of confidentiality is going to be so it's hard to quantify. Unliquidated damages is more suitable. The study guide does state that indemnity is frequently used in intellectual property rights, software licence agreements and share purchase agreements. This is also written on p. 21.

by Aubrey at Feb 07, 2026, 03:49 AM

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