Introductory Business Law CLEP Prep Practice Exam

What body of law primarily governs the formation and enforcement of contracts?

1. Bankruptcy Law

2. Business Law

3. Contract Law

4. Tax Law

The correct answer is: Contract Law

Contract Law is the body of law that deals with the rights, duties, and liabilities related to contracts between individuals, organizations, and businesses. This area of law is concerned with establishing and enforcing agreements between parties. Bankruptcy Law, on the other hand, deals with the financial affairs of individuals and businesses who are unable to pay their debts. It involves the filing of bankruptcy petitions, handling of assets, and distribution of funds to creditors. Business Law is a broader term that encompasses various legal issues related to running a business, such as corporate governance, contracts, intellectual property, and employment law. However, it is not specifically focused on the laws surrounding contracts. Tax Law deals with the rules and regulations related to the collection of taxes from individuals and businesses. This includes filing tax returns, deductions, and tax planning. In summary, while aspects of Bankruptcy Law, Business Law, and Tax Law may