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100+ Free CLEP Introductory Business Law Practice Questions

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Key Facts: CLEP Introductory Business Law Exam

100

approximate multiple-choice questions on the exam

College Board

90 minutes

time limit for the exam

College Board

20-80

score scale, with 50 the ACE credit-granting score

College Board / ACE

30-35%

of the exam covers contract law, the largest area

College Board

3 semester hours

typical college credit awarded for a passing score

American Council on Education

$97

exam fee, plus a test-center administration fee

College Board

The CLEP Introductory Business Law exam has about 100 multiple-choice questions answered in 90 minutes and is scored on a 20-80 scale, with 50 the ACE-recommended credit-granting score for roughly 3 semester hours. Contracts is by far the largest content area at about 30-35 percent, followed by the legal environment, torts, sales under UCC Article 2, agency and employment, the American legal system, and other topics. The exam costs $97 plus a test-center administration fee and is delivered on a computer (source: College Board, clep.collegeboard.org).

Sample CLEP Introductory Business Law Practice Questions

Try these sample questions to test your CLEP Introductory Business Law exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Which of the following is NOT one of the required elements for the formation of a valid, enforceable contract?
A.Mutual assent (offer and acceptance)
B.Consideration
C.A written, signed document in every case
D.Legality of purpose
Explanation: A valid contract generally requires mutual assent (offer and acceptance), consideration, capacity, and a legal purpose. Most contracts do not have to be in writing; only certain categories covered by the statute of frauds must be written to be enforceable.
2Consideration in contract law is best described as which of the following?
A.A moral obligation to keep one's promises
B.A bargained-for exchange of legal value between the parties
C.The written memorialization of an agreement
D.The good faith intent to perform
Explanation: Consideration is the bargained-for exchange in which each party gives up something of legal value or incurs a legal detriment. It is what distinguishes an enforceable contract from a gratuitous promise, which generally cannot be enforced.
3Under the mailbox rule applied to most contracts, an acceptance sent by an authorized means is generally effective at what point?
A.When the offeror actually reads it
B.When the acceptance is dispatched (placed in the mail)
C.When the offeror receives it
D.Only after both parties sign a written confirmation
Explanation: Under the common-law mailbox rule, an acceptance is effective when it is dispatched - for example, when properly mailed - not when it is received. Revocations, by contrast, are effective only upon receipt, which can create binding contracts even before the offeror learns of the acceptance.
4A homeowner offers to pay a contractor $5,000 to paint her house. Before the contractor responds, the homeowner emails, "I revoke my offer." The contractor receives the revocation before accepting. What is the legal effect?
A.The offer remains open because offers cannot be revoked
B.A contract was formed when the offer was made
C.The offer is terminated and no contract exists
D.The contractor may still accept within a reasonable time
Explanation: An ordinary offer may generally be revoked any time before acceptance, and the revocation is effective when received by the offeree. Because the contractor received the revocation before accepting, the offer terminated and no contract was formed.
5Which of the following contracts must generally be in writing to be enforceable under the statute of frauds?
A.A contract to paint a fence for $200
B.A contract for the sale of an interest in land
C.A contract to deliver groceries next week
D.A contract to tutor a student for one month
Explanation: The statute of frauds requires certain contracts to be in writing, including contracts for the sale of an interest in land. The common categories are summarized by the mnemonic MY LEGS: Marriage, contracts not performable within one Year, Land, Executor promises, Goods of $500 or more, and Surety (guaranty).
6The parol evidence rule generally prevents a party from doing which of the following?
A.Introducing prior oral statements to contradict a fully integrated written contract
B.Enforcing any oral contract whatsoever
C.Suing for breach of a written contract
D.Proving fraud in the formation of a contract
Explanation: The parol evidence rule bars the use of prior or contemporaneous oral or written statements to contradict the terms of a fully integrated written contract. Exceptions exist - for example, to prove fraud, mistake, or ambiguity - but the general rule excludes contradictory prior negotiations.
7A contract entered into by a person who has been adjudicated mentally incompetent is generally considered which of the following?
A.Fully enforceable
B.Void
C.Voidable at the option of the competent party
D.Illegal
Explanation: When a court has formally adjudicated a person mentally incompetent, contracts that person enters are void. By contrast, a contract made by someone who is mentally incompetent but not yet adjudicated is generally only voidable.
8A 16-year-old buys a car from a dealer and later wants out of the deal before turning 18. Under general contract principles, the contract is:
A.Void from the start
B.Voidable at the option of the minor
C.Fully binding on the minor
D.Enforceable only against the dealer
Explanation: Contracts entered into by minors are generally voidable at the minor's option, meaning the minor may disaffirm the contract. This protects minors from being bound to contracts they may not fully understand, though contracts for necessaries may carry an obligation to pay reasonable value.
9Which of the following best describes a unilateral contract?
A.A contract in which both parties exchange promises
B.A contract accepted only by full performance of the requested act
C.A contract that lacks consideration
D.A contract that is unenforceable due to illegality
Explanation: A unilateral contract is one in which the offeror seeks acceptance through performance rather than a return promise. A classic example is a reward offer: acceptance and the binding contract occur only when the requested act is fully performed.
10Under the doctrine of promissory estoppel, a promise may be enforced even without consideration when:
A.The promisor changes his mind within 24 hours
B.The promisee reasonably and detrimentally relied on the promise
C.The promise was made in front of witnesses
D.The promise was put in writing
Explanation: Promissory estoppel allows enforcement of a promise without consideration when the promisee reasonably relies on the promise to his detriment and injustice can be avoided only by enforcement. It is an equitable substitute for consideration.

About the CLEP Introductory Business Law Exam

The CLEP Introductory Business Law exam covers material taught in a one-semester introductory college course in business law. It contains about 100 multiple-choice questions answered in 90 minutes and is computer-based. The exam places the heaviest emphasis on contract law but also tests the history and sources of American law, the legal system and procedures, torts, agency and employment, sales under the UCC, and other topics such as business organizations and property. A passing score earns ACE-recommended college credit.

Questions

100 scored questions

Time Limit

90 minutes

Passing Score

50 (on a 20-80 scale)

Exam Fee

$97 plus a test-center administration fee (College Board)

CLEP Introductory Business Law Exam Content Outline

~30-35%

Contracts

Offer and acceptance, consideration, capacity, legality, statute of frauds, parol evidence, discharge, and breach and remedies.

~10-15%

Legal Environment and Regulation

Constitutional foundations, government regulation, consumer protection, antitrust, and ethics.

~10%

Torts

Negligence, intentional torts, strict and product liability, and tort defenses.

~8-13%

Sales and the UCC

UCC Article 2 sale-of-goods contracts, warranties, risk of loss, and remedies.

~7-13%

Agency and Employment

Agency creation, duties, authority, liability to third parties, and employment law basics.

~8-13%

American Legal Systems and Procedures

Court structure, jurisdiction, civil and criminal procedure, and dispute resolution.

~5-10%

History and Sources of American Law

Common law, statutory and constitutional law, equity, and stare decisis.

~15-25%

Other Topics

Business organizations, property, commercial paper, secured transactions, and bankruptcy.

How to Pass the CLEP Introductory Business Law Exam

What You Need to Know

  • Passing score: 50 (on a 20-80 scale)
  • Exam length: 100 questions
  • Time limit: 90 minutes
  • Exam fee: $97 plus a test-center administration fee

Keys to Passing

  • Complete 500+ practice questions
  • Score 80%+ consistently before scheduling
  • Focus on highest-weighted sections
  • Use our AI tutor for tough concepts

CLEP Introductory Business Law Study Tips from Top Performers

1Spend the most time on contract law - it is roughly a third of the exam - and learn the elements of a valid contract cold: offer, acceptance, consideration, capacity, and legality.
2Distinguish common-law contract rules from UCC Article 2 rules for the sale of goods, since the exam tests both and they differ on key points.
3Memorize the statute of frauds categories (contracts that must be in writing) using the MY LEGS mnemonic: Marriage, Year, Land, Executor, Goods $500+, Surety.
4For torts, be able to separate negligence (the four elements), intentional torts, and strict liability, and know common defenses.
5Practice applying rules to short fact patterns - about 30 percent of the exam asks you to apply law to specific case problems rather than recall definitions.

Frequently Asked Questions

How many questions are on the CLEP Introductory Business Law exam and how long is it?

The exam has approximately 100 multiple-choice questions answered in 90 minutes. Some questions are unscored pretest items that do not count toward your score.

What score do I need to pass the CLEP Introductory Business Law exam?

CLEP exams are scored on a 20-80 scale. The American Council on Education (ACE) recommends a score of 50 as the credit-granting score, typically worth about 3 semester hours, though each college sets its own policy.

What content area is most heavily tested?

Contracts is by far the largest area, accounting for roughly 30-35 percent of the exam. It covers offer and acceptance, consideration, capacity, legality, the statute of frauds, discharge, and breach and remedies.

Does the CLEP Introductory Business Law exam have an essay?

No. The exam is entirely multiple choice and is delivered on a computer. There is no required essay section.

How much does the CLEP Introductory Business Law exam cost?

The CLEP exam fee is $97, plus a separate administration fee charged by the test center. Some test centers and military programs offer fee assistance.

What law governs sales of goods on this exam?

Contracts for the sale of goods are governed by Article 2 of the Uniform Commercial Code (UCC), which differs from common-law contract rules in areas such as offer firmness, additional terms, and warranties.