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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When an individual or entity breaches a contract, what are the consequences?

Negligence
Liability
Damages
Obligation

The correct answer is: Damages

When an individual or entity breaches a contract, the consequences are often financial damages. This means that the party who breached the contract must compensate the other party for any losses or harm caused by the breach. This can include direct losses, such as the cost of goods or services not provided, as well as indirect losses, such as lost profits. Option A, negligence, refers to a failure to exercise reasonable care which may lead to harm or damages, but it is not specific to breaches of contract. Option B, liability, refers to the state of being responsible for something, but it does not accurately describe the consequences of a contract breach. Option D, obligation, refers to a duty or commitment, but it does not specify what happens when that duty or commitment is not fulfilled. Thus, option C, damages, is the correct answer.