Introductory Business Law CLEP Prep Practice Exam

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What are the three elements of a valid contract?

  1. Offer, acceptance, and performance

  2. Agreement, consideration, and performance

  3. Offer, consideration, and execution

  4. Offer, acceptance, and consideration

The correct answer is: Offer, acceptance, and consideration

The three elements of a valid contract are offer, acceptance, and consideration. Option D is the best answer because it includes all three elements, while the other options either include incorrect elements or leave out one of the essential elements. Option A is incorrect because it includes "performance" instead of "consideration". While performance may be part of a valid contract, it is not one of the essential elements. Option B is incorrect because it includes "agreement" instead of "offer". While agreement is important, it is not the same as an offer. An offer is a specific proposal made by one party to another, while an agreement refers to the mutual understanding between both parties. Option C is incorrect because it includes "execution" instead of "acceptance". While execution may be necessary for the contract to be legally binding, it is not one of the essential elements. Acceptance is when one party agrees

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