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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What type of contract requires both parties to honestly disclose all known information?

Bilateral Contract
Unilateral Contract
Executory Contract
Executed Contract

The correct answer is: Unilateral Contract

While all contracts require honesty and good faith, only a unilateral contract requires both parties to disclose all known information. A bilateral contract is formed when both parties exchange promises, not disclosure of information. An executory contract is one that is still to be performed by both parties, so disclosure is not relevant. An executed contract has already been completed, so disclosure is not necessary before formation.