Introductory Business Law CLEP Prep Practice Exam

When does a contract become a legally enforceable agreement?

1. When it has been accepted by all parties

2. When it has been rejected by all parties

3. When an offer has been made

4. When both parties have consented

The correct answer is: When both parties have consented

A contract becomes a legally enforceable agreement when both parties involved have consented to it, meaning they have agreed to the terms and conditions set out in the contract. Option A (when it has been accepted by all parties) is similar to option D, but it does not necessarily guarantee that both parties have consented to the contract. Option B (when it has been rejected by all parties) is incorrect because a rejected contract cannot be legally enforced. Option C (when an offer has been made) is only the initial step in the contract formation process and does not necessarily make it legally enforceable. Therefore, the correct answer is option D.