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!

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What document must be signed by the parties involved in a contract in order to make it legally binding?

Proposal
Agreement
Verbal Promise
Certificate

The correct answer is: Agreement

A proposal is not legally binding because it is just a suggestion or an offer of a potential agreement, but it is not a final, agreed-upon contract. A verbal promise is also not legally binding because it is not written and therefore difficult to prove in case of a dispute. A certificate is typically a document that certifies the completion of a course or certain qualifications, and it is not related to contracts. An agreement, on the other hand, is a legal document that outlines the terms and conditions of a contract and is signed by all parties involved, making it legally binding. Therefore, an agreement is the most appropriate document to be signed in order to make a contract legally binding.