Introductory Business Law CLEP Prep Practice Exam

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Prepare for the CLEP Business Law Exam with flashcards and multiple-choice questions. Each question comes with hints and explanations to help you succeed. Master the content and pass your exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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The five essential elements of contract formation include

Agreement, consideration, inducement, legality, and assurance
Agreement, consideration, legality, warranty, and objective
Agreement, consideration, capacity, legality, and performance
Agreement, consideration, contingency, legality, and treble damages

The correct answer is: Agreement, consideration, capacity, legality, and performance

The other options are incorrect because they either include elements that are not essential for contract formation, such as inducement, warranty, objective, or treble damages, or they are missing an essential element, such as capacity or performance. Agreement refers to the mutual understanding and acceptance of the terms of the contract, consideration refers to the exchange of something of value between the parties, legality ensures that the contract is lawful and not against public policy, and performance refers to the fulfillment of the obligations outlined in the contract. Without all of these elements, a contract cannot be legally formed.