Mastering TOEIC Reading: Practice Test for Service Contract Negotiation Skills

The TOEIC Reading section often includes questions related to business topics such as understanding business credit terms and conditions. To help you prepare for questions about negotiating service contracts, we’ve created a practice test focusing on this theme. Let’s dive into the exercises to enhance your reading comprehension and vocabulary skills.

Part 1: Incomplete Sentences

In this section, choose the word or phrase that best completes each sentence.

1. The company’s legal team is reviewing the contract to ensure all __ are clearly defined.
   A) terms
   B) conditions
   C) clauses
   D) paragraphs

2. It’s crucial to __ the scope of work before finalizing any service agreement.
   A) outline
   B) outsource
   C) outperform
   D) outreach

3. The __ party reserves the right to terminate the contract with 30 days’ notice.
   A) first
   B) second
   C) either
   D) neither

4. Negotiators should aim for a win-win outcome that __ both parties.
   A) benefits
   B) profits
   C) advantages
   D) favors

5. The service provider must maintain __ insurance coverage throughout the contract period.
   A) liability
   B) life
   C) health
   D) property

6. Any __ to the original agreement must be made in writing and signed by both parties.
   A) amendments
   B) appendices
   C) addendums
   D) attachments

7. The client retains all __ rights to the materials produced under this contract.
   A) intellectual property
   B) copyright
   C) trademark
   D) patent

8. Failure to meet the agreed-upon deadlines may result in __ penalties.
   A) monetary
   B) financial
   C) fiscal
   D) economic

9. Both parties agree to keep all __ information confidential for a period of five years.
   A) proprietary
   B) private
   C) personal
   D) privileged

10. The service provider shall __ the client with monthly progress reports.
    A) furnish
    B) supply
    C) deliver
    D) present

11. Any disputes arising from this contract shall be resolved through __ before resorting to litigation.
    A) mediation
    B) arbitration
    C) negotiation
    D) conciliation

12. The contract includes a __ clause to protect against unforeseen circumstances.
    A) force majeure
    B) act of God
    C) unavoidable accident
    D) natural disaster

13. The service fees are subject to an annual __ based on the Consumer Price Index.
    A) increase
    B) adjustment
    C) escalation
    D) revision

14. Both parties must act in good __ throughout the duration of the contract.
    A) faith
    B) will
    C) intention
    D) behavior

15. The contract specifies the __ for early termination without cause.
    A) conditions
    B) terms
    C) requirements
    D) stipulations

16. All __ must be submitted in writing within 30 days of the incident.
    A) complaints
    B) grievances
    C) disputes
    D) objections

17. The service provider agrees to __ the client against any third-party claims.
    A) indemnify
    B) protect
    C) shield
    D) guard

18. The contract includes a __ clause to prevent the service provider from working with competitors.
    A) non-compete
    B) exclusivity
    C) restrictive
    D) prohibitive

19. Any __ of this agreement by either party may result in immediate termination.
    A) breach
    B) violation
    C) infringement
    D) transgression

20. The __ schedule outlines the specific milestones and associated payments.
    A) payment
    B) delivery
    C) performance
    D) execution

21. Both parties agree to __ with all applicable laws and regulations.
    A) comply
    B) adhere
    C) conform
    D) abide

22. The contract includes provisions for __ ownership of any intellectual property created.
    A) joint
    B) shared
    C) divided
    D) mutual

23. Any __ to assign the contract to a third party requires written consent from both parties.
    A) attempt
    B) effort
    C) endeavor
    D) trial

24. The service provider must maintain adequate __ to ensure uninterrupted service delivery.
    A) resources
    B) personnel
    C) equipment
    D) facilities

25. The client reserves the right to __ the quality of services provided at any time.
    A) audit
    B) inspect
    C) review
    D) examine

26. The contract specifies the __ for resolving any performance-related issues.
    A) procedure
    B) protocol
    C) process
    D) method

27. Both parties agree to a __ review of the contract terms every two years.
    A) periodic
    B) regular
    C) scheduled
    D) routine

28. The service provider must obtain __ approval before subcontracting any work.
    A) prior
    B) advance
    C) preliminary
    D) antecedent

29. The contract includes a __ clause to protect against significant changes in circumstances.
    A) hardship
    B) difficulty
    C) adversity
    D) challenge

30. Any __ of confidential information may result in legal action and damages.
    A) disclosure
    B) revelation
    C) exposure
    D) divulgence

Part 2: Text Completion

Read the following texts and select the best word or phrase to fill each blank.

Text 1:

When negotiating service contracts, it’s essential to clearly define the (1) of work. This includes specifying the exact services to be provided, the (2) for delivery, and any performance metrics that will be used to evaluate the quality of the work. Both parties should also agree on the (3) structure, including any potential bonuses or penalties tied to performance. Finally, it’s crucial to outline the (4) for dispute resolution and contract termination to protect both parties’ interests.

1. A) scope B) range C) extent D) breadth
2. A) timeline B) deadline C) schedule D) calendar
3. A) payment B) financial C) monetary D) fiscal
4. A) procedures B) methods C) techniques D) approaches

Text 2:

Successful contract negotiation requires (5) preparation. Before entering into discussions, both parties should conduct thorough (6) to understand industry standards and market rates. It’s also important to identify your (7) points – those aspects of the contract that are non-negotiable – as well as areas where you’re willing to be flexible. During the negotiation process, maintain clear (8) and be prepared to offer creative solutions to overcome any obstacles that arise.

5. A) careful B) meticulous C) thorough D) detailed
6. A) research B) investigation C) study D) analysis
7. A) starting B) beginning C) opening D) initial
8. A) communication B) dialogue C) conversation D) discussion

Text 3:

Confidentiality is often a critical component of service contracts. Both parties should agree on what information is considered (9) and how it will be protected. This may include implementing specific (10) measures, such as secure data storage and limited access protocols. The contract should also specify the (11) for handling any data breaches or unauthorized disclosures. Additionally, consider including provisions for the (12) of any confidential information upon contract termination.

9. A) confidential B) secret C) private D) classified
10. A) security B) safety C) protection D) safeguard
11. A) procedures B) steps C) actions D) measures
12. A) return B) deletion C) destruction D) removal

Text 4:

Intellectual property rights can be a complex aspect of service contracts. It’s important to clearly (13) who will own any IP created during the course of the contract. This may involve negotiating (14) ownership arrangements or establishing licensing agreements. The contract should also address any pre-existing IP that may be used in the project and how it will be (15). Finally, consider including provisions for the (16) of any new IP created, such as patents or trademarks.

13. A) define B) establish C) determine D) specify
14. A) joint B) shared C) mutual D) collective
15. A) protected B) safeguarded C) secured D) preserved
16. A) registration B) filing C) recording D) documentation

Key Elements in Negotiating Service Contracts

Answer Key

Part 1: Incomplete Sentences

1. C) clauses
2. A) outline
3. C) either
4. A) benefits
5. A) liability
6. A) amendments
7. A) intellectual property
8. A) monetary
9. A) proprietary
10. A) furnish
11. B) arbitration
12. A) force majeure
13. C) escalation
14. A) faith
15. C) requirements
16. B) grievances
17. A) indemnify
18. A) non-compete
19. A) breach
20. A) payment
21. A) comply
22. A) joint
23. A) attempt
24. A) resources
25. B) inspect
26. A) procedure
27. A) periodic
28. A) prior
29. A) hardship
30. A) disclosure

Part 2: Text Completion
Text 1:

1. A) scope
2. C) schedule
3. A) payment
4. A) procedures

Text 2:
5. C) thorough
6. A) research
7. C) opening
8. A) communication

Text 3:
9. A) confidential
10. A) security
11. A) procedures
12. C) destruction

Text 4:
13. D) specify
14. A) joint
15. A) protected
16. A) registration

By practicing with these TOEIC Reading exercises focused on negotiating service contracts, you’ll improve your vocabulary and comprehension skills related to business agreements. Remember to pay attention to context clues and specific terminology used in contract negotiations. For more practice on related topics, check out our guide on understanding business credit terms and conditions.