Introductory Business Law
3 free practice tests · 100 questions each · 1h 30min · No sign-up required
About This Exam
The CLEP Introductory Business Law exam measures college-level understanding of contracts, torts, legal systems, constitutional foundations, agency, sales, and the legal environment of business. Questions are written to reflect the official College Board blueprint and mix direct knowledge, application, interpretation, and scenario-based reasoning.
What's Covered
- Contracts — formation, consideration, performance, breach, remedies, and defenses
- Legal systems — sources of law, courts, jurisdiction, procedures, and constitutional foundations
- Legal environment — ethics, regulation, employment, consumer protection, and product liability
- Torts and business entities — negligence, intentional torts, agency, sales, partnerships, and corporations
For the official exam description, see the College Board CLEP Introductory Business Law page.
Study Tips
- Treat contract questions as sequences: formation, performance, breach, and remedy.
- Separate criminal law ideas from civil liability concepts such as negligence or strict liability.
- Use fact patterns to decide which legal rule governs instead of memorizing isolated vocabulary.
- Know when an agency relationship creates authority and liability.
- Expect distractors that quote correct legal terms but apply them to the wrong party or stage of a dispute.
How to Register
Register at clep.collegeboard.org. The exam costs $97 and can be taken at a testing center or remotely. Check with your college for its CLEP credit policy and minimum score requirements before registering. Military service members, their spouses, and eligible veterans may be able to take the exam at no cost through DANTES funding.
About Our Practice Tests
All questions are original and written to match the difficulty, format, and topic coverage of the real exam based on official exam descriptions. We offer two modes: Practice Mode gives you instant feedback and explanations after each question, and Test Mode simulates the real exam with a timer and no feedback until you submit. Both modes are completely free with no account required.
Sample Practice Questions
Review these sample questions to get a feel for the exam. For the full interactive experience, use the Practice Tests above.
Which term best matches the description below?
Judge-made law developed through court decisions and precedent rather than statutes.
- A) stare decisis
- B) common law
- C) alternative dispute resolution
- D) offer
- E) acceptance
View Answer & Explanation
Correct Answer:
B) common law
common law is judge-made law developed through court decisions and precedent rather than statutes. In context, a court deciding a contract dispute relies heavily on earlier judicial rulings that shaped the governing rule.
Which term best matches the description below?
Law based on the federal or state constitution, including the distribution and limits of governmental power.
- A) alternative dispute resolution
- B) offer
- C) constitutional law
- D) acceptance
- E) consideration
View Answer & Explanation
Correct Answer:
C) constitutional law
constitutional law is law based on the federal or state constitution, including the distribution and limits of governmental power. In context, a business challenges a regulation by arguing that it violates free speech protections under the Constitution.
Which term best matches the description below?
Law created by administrative agencies through rules, enforcement actions, and adjudication.
- A) offer
- B) acceptance
- C) consideration
- D) administrative law
- E) capacity
View Answer & Explanation
Correct Answer:
D) administrative law
administrative law is law created by administrative agencies through rules, enforcement actions, and adjudication. In context, an employer must follow workplace standards issued and enforced by a federal regulatory agency.
Which term best matches the description below?
The authority of a court to hear a case and bind the parties with its decision.
- A) acceptance
- B) consideration
- C) capacity
- D) legality
- E) jurisdiction
View Answer & Explanation
Correct Answer:
E) jurisdiction
jurisdiction is the authority of a court to hear a case and bind the parties with its decision. In context, a lawsuit is dismissed from one court because that court lacks authority over the defendant or subject matter.
Which term best matches the description below?
The principle that courts should follow established precedent when deciding similar cases.
- A) stare decisis
- B) consideration
- C) capacity
- D) legality
- E) statute of frauds
View Answer & Explanation
Correct Answer:
A) stare decisis
stare decisis is the principle that courts should follow established precedent when deciding similar cases. In context, a judge explains that an earlier appellate ruling controls the outcome unless a meaningful distinction exists.