Introductory Business Law CLEP Prep Practice Exam

What is the bilateral agreement which the parties focus on in contract law?

1. liability

2. confidentiality

3. consideration

4. breach of contract

The correct answer is: consideration

In contract law, bilateral agreements refer to a promise made by one party in exchange for a promise made by the other party. In this context, "consideration" refers to the something of value that is promised in exchange for the other party's promise. Option A, liability, is incorrect because it refers to the legal responsibility for one's actions and is not specific to contract law. Option B, confidentiality, is incorrect because it refers to the protection of sensitive information and is not directly related to the focus of parties in a contract. Option D, breach of contract, is incorrect because it refers to the failure to fulfill the terms of the contract and is not the primary focus of parties in a contract. Therefore, option C, consideration, is the correct answer as it directly relates to the exchange of promises between parties in a bilateral agreement.