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 is a contract?

  1. An agreement to buy or sell goods or services

  2. A promise to do something in return for a benefit

  3. An enforceable promise that is legally binding

  4. 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.

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