Free CLEP Business Law Exam Practice Questions

1. Which of the following best describes the effect of a breach of contract?
  1. Nonmaterial breaches that are uncorrected for a reasonable time discharge the other party.
  2. Any breach discharges the other party.
  3. No breaches automatically discharge the other party.
  4. If the breach is material and uncorrected, the other party is discharged.
  5. Nonmaterial breaches do not enable action for damages.
2. Who is allowed to enter into a hot cargo contract?
  1. unions and employers
  2. employers and nonunionized employees
  3. neither unions nor employers
  4. unions, but not employers
  5. unions, employers, and nonunionized employees
3. What does it mean to say that the American legal system is adversarial?
  1. American citizens have the right to representation in court.
  2. The court system should appoint attorneys to represent both sides of a case.
  3. Truth and justice are best determined by an independent researcher.
  4. The best way to administer justice is to hear the full arguments of interested parties on both sides.
  5. People with a personal interest in a case make terrible advocates.
4. Which type of warranty assures the buyer that the goods will be up to his or her standard?
  1. express warranty
  2. warranty of title
  3. implied warranty of merchantability
  4. lifetime warranty
  5. implied warranty of fitness for a particular purpose
5. Which of the following facts would void the contracts of a person?
  1. The person suffers extreme hardship.
  2. The person is under guardianship of a court.
  3. The person has not been declared incompetent by a court but lacks the capacity to understand.
  4. The person is intoxicated.
  5. The person is a minor.
6. In which of the following scenarios would Tina be liable for the tort of negligence?
  1. Tina suffers a heart attack while driving and slams into another car.
  2. Tina dunks a basketball and, because of a structural defect, the backboard crashes down and injures her teammate.
  3. Tina takes cold medication that warns of drowsiness as a possible side effect. She subsequently falls asleep while driving and injures another driver.
  4. Tina breaks into her high school and alters her grades.
  5. Tina tries to hit her professor with a rock, but misses and hits another student instead.
7. Which of the following is required for consideration to be valid in a contract?
  1. Consideration must be stated in the contract.
  2. Consideration must have a monetary value.
  3. Consideration must be accompanied by an option.
  4. Consideration must be performed simultaneously by both parties.
  5. Consideration must be based on a legal obligation rather than a moral obligation.
8. Which sales are regulated by Article 2 of the Uniform Commercial Code?
  1. copyright sales
  2. real property sales
  3. sales of services
  4. trademark sales
  5. sales of tangible personal property
9. Which power enables courts to evaluate laws and declare them unconstitutional?
  1. stare decisis
  2. equal protection
  3. rational basis test
  4. judicial review
  5. intermediate scrutiny
10. Which economist asserted that corporations should obey laws and social customs, but otherwise should concentrate all of their resources on making a profit?
  1. Adolph Berle
  2. Milton Friedman
  3. John Maynard Keynes
  4. Adam Smith
  5. B. Carroll