Introductory Business Law CLEP Prep Practice Exam

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Prepare for the Introductory Business Law CLEP Exam. Study with flashcards and multiple choice questions, each question comes with hints and explanations. Ace your exam with confidence!

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Under most states’ laws, when can a contract be “discharged”, or no longer in effect?

If one party breaches the contract
If both parties agree to rescind the contract
If the terms of a contract are deemed to be unconscionable
If the contract is found to be against public policy

The correct answer is: If both parties agree to rescind the contract

Under most states' laws, a contract can be discharged, or no longer in effect, if both parties agree to rescind the contract. This means that both parties have reached an agreement to terminate the contract by mutual consent. Option A If one party breaches the contract - If one party breaches the contract, it means they have failed to fulfill their obligations under the contract. This does not necessarily terminate the contract, but it can give the non-breaching party the option to seek remedies or terminate the contract through legal action. Option C: If the terms of a contract are deemed to be unconscionable - An unconscionable contract is one that is so one-sided and unfair that it shocks the conscience. If a court deems a contract to be unconscionable, it may refuse to enforce it, but this does not automatically discharge the contract. Option D: