Introductory Business Law CLEP Prep Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

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!

Practice this question and more.

What is a contract?

An agreement to buy or sell goods or services
A promise to do something in return for a benefit
An enforceable promise that is legally binding
A business transaction between two or more parties

The correct answer is: An enforceable promise that is legally binding

A contract is defined as a legally binding agreement between two or more parties that outlines the terms and conditions of a transaction. Option A may seem like a correct definition, but it only covers a specific type of contract for buying or selling goods or services. Option B is similar to the concept of a contract, but it lacks the crucial element of enforceability. Option D is too narrow and does not encompass all types of contracts that exist. Therefore, option C is the most accurate definition of a contract.