Unit 2 of 5
Study guide for CLEP CLEP Introductory Business Law — Unit 2: Contracts. Practice questions, key concepts, and exam tips.
71
Practice Questions
10
Flashcards
4
Key Topics
Try these 5 questions from this unit. Sign up for full access to all 71.
Which is a type of contract that can be terminated at any time by either party?
Bilateral contract
Unilateral contract
Executory contract
At-will contract
Implied contract
Answer: D — At-will contract is correct because at-will contracts can be terminated by either party..
A company's board of directors has decided to implement a new policy that requires all employees to sign a non-disclosure agreement before accessing confidential company information. Which of the following is the primary purpose of this policy?
To protect the company's trade secrets and prevent employee theft
To comply with federal regulations regarding employee privacy
To increase employee morale and job satisfaction
To reduce the company's liability for employee negligence
To enhance the company's competitive edge through employee recruitment
Answer: A — The primary purpose of a non-disclosure agreement is to protect confidential information, such as trade secrets.
Under the UCC, a firm offer
Must be in writing to be enforceable
Requires consideration to be binding
Is irrevocable for the time stated in the offer
Automatically terminates after 30 days
Can only be made by a merchant
Answer: C — Is irrevocable for the time stated in the offer is correct because a firm offer is irrevocable..
A valid contract requires
Offer, acceptance, and breach
Acceptance, consideration, and capacity
Offer, consideration, and legality
Offer, acceptance, and consideration
Legality, capacity, and breach
Answer: D — Offer, acceptance, and consideration is correct because a valid contract requires offer, acceptance, and consideration. Breach is not a requirement.
Which statement about parol evidence is accurate?
It can always be used to contradict a written contract
It can be used to establish a contract's consideration
It can never be used to interpret a written contract
It is admissible when a contract is partially written and partially oral
It applies only to contracts for the sale of goods
Answer: D — It is admissible when a contract is partially written and partially oral is correct because parol evidence can be used when a contract is partially written..
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