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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Which of the following is not one of the five elements necessary for a valid contract?

An offer
A court ruling
Consideration
Capacity

The correct answer is: A court ruling

A court ruling is not one of the five elements necessary for a valid contract because it is a legal decision made after a contract has been formed and does not impact the validity of the contract itself. An offer, consideration, capacity, and mutual assent are all essential elements that must be present in order for a contract to be legally binding. An offer is a promise to do or not do something, consideration is the exchange of value between parties, capacity refers to the legal ability to enter into a contract, and mutual assent means that both parties have a meeting of the minds and agree to the terms of the contract. Without any of these elements, a contract would not be considered valid.