Introductory Business Law CLEP Prep Practice Exam

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Prepare for the Introductory Business Law CLEP Exam with our comprehensive quiz, designed to cover essential legal concepts and practices. Study effectively and boost your chances of success!

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What is the difference between a "void" and "voidable" contract?

A voidable contract is legally binding while a void contract is not
A void contract is legally binding while a voidable contract is not
A void contract is enforceable by all parties while a voidable contract is not
A voidable contract is enforceable by all parties while a void contract is not

The correct answer is: A voidable contract is legally binding while a void contract is not

In a void contract, the contract is not valid and has no legal effect or force from the beginning. This means that the contract is not legally binding and cannot be enforced by either party. On the other hand, a voidable contract is initially valid and legally binding, but it can be cancelled or revoked by one or both parties due to specific circumstances. Therefore, option A is correct. Options B, C, and D are incorrect because they confuse the definitions of void and voidable contracts. Void and voidable contracts have opposite attributes - one is not legally binding while the other is initially binding but can be cancelled.