Business Law Sample CLEP Test
Questions and Correct Answers 2026
Updated.
The authority of a court to hear and decide a case is known as - Answer jurisdiction
In the land mark case of Marbury v. Madison, the United States Supreme Court held that -
Answer Marbury was entitled to his appointment, but the congressional statute granting the
federal courts the power to compel Madison to
A contract will be unenforceable if - Answer a statute declares such a contract illegal
Angela promises to work for Barbara during the month of July, and Barbara promises to pay
Angela $600 for her services. In this situation, what kind of contract has been made? - Answer
Bilateral
Clyde received the following letter from Joe: "I will sell you the books you examined yesterday
for $10 each or $100 for the entire set." Clyde, not sure he would get much use from the books,
told his brother, Michael, about the offer. Michael tendered Joe $100 for the books, but Joe
refused to sell the books to Michael.
If Michael sued Joe, the court would probably hold that Michael - Answer cannot accept the
offer because it was not made to him.
All of the following have the right to enforce a contract EXCEPT - Answer a third party
incidental beneficiary
In a legal action alleging $100,000 of damages suffered for breach of contract, the plaintiff is a
citizen of New York and the defendant is a corporation organized under the laws of California.
Considering the details of this case, a United States district court will - Answer have
jurisdiction based on diversity of citizenship
Benson, a seventeen-year-old college freshman, was adequately supplied with clothes by his
father. Smith, a clothing merchant, learned that Benson was spending money freely and
solicited clothing orders from him. Benson bought $750 worth of luxury clothing from Smith on
credit. Benson failed to pay Smith.
If Smith sued Benson, the court would probably hold that - Answer Benson can disaffirm the
contract, return the clothing, and escape liability
The purpose of a grand jury is to - Answer indict the accused and to require him or her to
stand trial
, Which of the following promises would be enforceable by the majority of courts? - Answer
Avery owes Bond $100, but the collection of this debt is barred by the statute of limitations.
Later, Avery writes Bond a letter promising to pay Bond the $100. correct
Ordinarily an employer is liable for which of the authorized acts committed by an employee for
the benefit of the employer and in the scope of the employment?
I. Torts
II. Contracts
III. Misrepresentations - Answer I, II and III
Which of the following decisions could NOT be made by an appellate court? - Answer
Ordering a case to be tried in the appellate court
Upon delivery of nonconforming goods, a buyer may do which of the following?
I. Reject all the goods.
II. Accept all the goods.
III. Accept those units that conform and reject the rest. - Answer All 3 are options for the
goods
Which of the following will apply if the parties to a contract knew or should have known that a
word has a customary usage in their particular trade or community? - Answer Parol evidence
may be used to define the meaning of the word
Webster insured her residence with Old Home Insurance Company. Assuming that the policy
contained no provision with respect to assignment, which of the following statements is
correct? - Answer If Webster suffers an insured loss, she may assign the amount due under
the policy to anyone.
Recovery in quasi contract is based on a judgement that determines the presence of - Answer
an unjust enrichment
The commerce clause of the United States Constitution authorizes - Answer Congress to
regulate interstate commerce
Maxine initiates a lawsuit against Jason by filing and serving Jason with a summons and
complaint, and Jason responds to Maxine's complaint with a document called an answer.
Maxine's complaint and Jason's answer are referred to as - Answer pleadings
Questions and Correct Answers 2026
Updated.
The authority of a court to hear and decide a case is known as - Answer jurisdiction
In the land mark case of Marbury v. Madison, the United States Supreme Court held that -
Answer Marbury was entitled to his appointment, but the congressional statute granting the
federal courts the power to compel Madison to
A contract will be unenforceable if - Answer a statute declares such a contract illegal
Angela promises to work for Barbara during the month of July, and Barbara promises to pay
Angela $600 for her services. In this situation, what kind of contract has been made? - Answer
Bilateral
Clyde received the following letter from Joe: "I will sell you the books you examined yesterday
for $10 each or $100 for the entire set." Clyde, not sure he would get much use from the books,
told his brother, Michael, about the offer. Michael tendered Joe $100 for the books, but Joe
refused to sell the books to Michael.
If Michael sued Joe, the court would probably hold that Michael - Answer cannot accept the
offer because it was not made to him.
All of the following have the right to enforce a contract EXCEPT - Answer a third party
incidental beneficiary
In a legal action alleging $100,000 of damages suffered for breach of contract, the plaintiff is a
citizen of New York and the defendant is a corporation organized under the laws of California.
Considering the details of this case, a United States district court will - Answer have
jurisdiction based on diversity of citizenship
Benson, a seventeen-year-old college freshman, was adequately supplied with clothes by his
father. Smith, a clothing merchant, learned that Benson was spending money freely and
solicited clothing orders from him. Benson bought $750 worth of luxury clothing from Smith on
credit. Benson failed to pay Smith.
If Smith sued Benson, the court would probably hold that - Answer Benson can disaffirm the
contract, return the clothing, and escape liability
The purpose of a grand jury is to - Answer indict the accused and to require him or her to
stand trial
, Which of the following promises would be enforceable by the majority of courts? - Answer
Avery owes Bond $100, but the collection of this debt is barred by the statute of limitations.
Later, Avery writes Bond a letter promising to pay Bond the $100. correct
Ordinarily an employer is liable for which of the authorized acts committed by an employee for
the benefit of the employer and in the scope of the employment?
I. Torts
II. Contracts
III. Misrepresentations - Answer I, II and III
Which of the following decisions could NOT be made by an appellate court? - Answer
Ordering a case to be tried in the appellate court
Upon delivery of nonconforming goods, a buyer may do which of the following?
I. Reject all the goods.
II. Accept all the goods.
III. Accept those units that conform and reject the rest. - Answer All 3 are options for the
goods
Which of the following will apply if the parties to a contract knew or should have known that a
word has a customary usage in their particular trade or community? - Answer Parol evidence
may be used to define the meaning of the word
Webster insured her residence with Old Home Insurance Company. Assuming that the policy
contained no provision with respect to assignment, which of the following statements is
correct? - Answer If Webster suffers an insured loss, she may assign the amount due under
the policy to anyone.
Recovery in quasi contract is based on a judgement that determines the presence of - Answer
an unjust enrichment
The commerce clause of the United States Constitution authorizes - Answer Congress to
regulate interstate commerce
Maxine initiates a lawsuit against Jason by filing and serving Jason with a summons and
complaint, and Jason responds to Maxine's complaint with a document called an answer.
Maxine's complaint and Jason's answer are referred to as - Answer pleadings
