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 the difference between tort law and contract law?

Tort law applies to the actions of individuals, while contract law applies to the actions of companies
Tort law applies to the actions of companies, while contract law applies to the actions of individuals
Tort law is focused on compensatory damages, while contract law is focused on preventing damages
Tort law is focused on preventing damages, while contract law is focused on compensatory damages

The correct answer is: Tort law is focused on preventing damages, while contract law is focused on compensatory damages

While both tort and contract law deal with civil wrongs, the main difference lies in their purpose. Tort law is primarily concerned with holding individuals or companies accountable for their actions that cause harm or injury to others. It is focused on providing compensation or damages to the victim. On the other hand, contract law is focused on upholding agreements and enforcing obligations between two parties. It is about ensuring that the terms of a contract are fulfilled by both parties. Therefore, the incorrect answer choices that suggest that one type of law applies to only individuals or companies are misleading, as both tort and contract law can apply to both individuals and companies depending on the situation. Additionally, the incorrect answer choices that suggest a focus solely on compensatory damages or preventing damages are incomplete, as both types of law can involve both preventative and compensatory measures.