Introductory Business Law CLEP
Free Study Guide

Free Introductory Business Law CLEP Study Guide

Name of Exam: Introductory Business Law CLEP

Number of Questions: 100

Time Limit: 90 Minutes

ACE Recommended Passing Score: 50

Practice Test Available?: Yes - Click here

Cost: $80 + Sitting Fee (Usually no more than $20) at your testing site. Military can take CLEPs for free with Tuition Assistance. Check with your Educational Officer!

Difficulty 1-5 : 5
(One being the easiest, and five being the hardest)

Exam Description:

The Introductory Business Law CLEP covers the material you would learn in a single semester of a college course on the subject. It will test you on your understanding of the terminology, but it will also require you to understand the origins of American Law and how it applies to certain scenarios.

A good 30% of the examination will be of case problems. The exam will give you some information, and asking you to apply your knowledge of the legal system to determine the correct answer.

Personal Thoughts:

The Introductory Business Law CLEP tends to worry people, and rightly so for those not familiar with the legal system. It's perfectly possible for you to learn the subject, but there is a lot of new terminology to run through.

If you've ever run your own business, or dealt with the legal system in the course of your career (being arrested doesn't count! :P) then you're probably familiar with some of the below topics. If not, you'll need to take your time on this. I made a 48 on my first attempt on this exam (Yes, I was upset) and only passed it the second time after dedicating a few weeks straight to studying.

Exam breakdown:

According to the College Board website, the Introductory Business Law CLEP is broken down as follows:

25%-30%Legal Environment
10%-15% Torts
05%-10%History and Sources of American Law/Constitutional Law
05%-10%American Legal Systems and Procedures

Areas of Study

I'm going to break down the percentages above with the topics that fall under each category. This should allow you to decide what you need help with, and only study those areas in which you feel a little weak. Less wading through masses of resources, and more targeted studying.

Alright, here we go:

(25%-35% of the Introductory Business Law CLEP)

  • Meanings of terms - I <3 Wikipedia. It's going to be boring at times, but you'll need to read this entire page. The Introductory Business Law CLEP tested me on almost everything I see on this page.
  • Formation of contracts - A great way to start this section off. Read the entire page, it won't take you too long but will cover five or six things you'll need to know for the exam.
  • Capacity - Worded in legal-ese it took me a while to grasp this. Think of it as an individual's (or company's) right or ability to create a contract.
  • Consideration - A simple concept, but one you'll need to understand for the Introductory Business Law CLEP.
  • Joint Obligation - A decent definition, but I like the one found here better. Know that in civil law, the obligor only pays for his portion of the performance.
  • Contracts for the benefit of third parties - An easy way to remember this is to think of a wedding planner. The original contract may have been between the wedding planner and the caterer. The guests however could sue the caterer if the food isn't prepared correctly and makes everyone ill.
  • Assignments - You'll need to know this term.
  • Delegation - And this one too!
  • Statute of Frauds - This one is important. Know what it is, but pay attention to the "Uniform Commercial Code" section where it talks about what falls under this statute.
  • Breach of contract and remedies - This gives a great overview.
  • Bar to remedies for breach of contract - This goes into more detail then the previous link about the remedies available, so you can use it for that section as well. This time around though, pay attention to the limitations. Know when you "can't" use the remedies.
  • Discharge of contracts
  • Illegal contracts - The Introductory Business Law CLEP exam has been known to give a few scenarios and then ask if the contract is legal or not.
  • Voidable Contract - You will need to know this.. Let me repeat.. You will need to understand what a voidable contract is, and how contract law handles minors.
  • Void Contract - Know the different between this and the Voidable contract. Pay attention on the Introductory Business Law CLEP since it will sometimes try to trip you up.

Legal Environment
(25%-30% of the Introductory Business Law CLEP)

  • Legal Ethics - Know what it is as a general term. Don't get too involved with the bar requirements and such.
  • Social Responsibility of Corporations - It's a hot-button topic, but also one that is common sense for most people.
  • Government regulation/Administrative Agencies - A good article on regulation as it applies to businesses and the government.
  • Environmental Law - A decent article, but not enough to satisfy me. See the below links as well.
  • The EPA - Don't go into too much detail, but just understand what it is and the power it has to regulate and enforce.
  • Superfund - Another one that you shouldn't go too deep with, but know what it's for. It's an interesting read in its own right.
  • Securities and Antitrust Law - There are lawyers that specialize in this, so that should be all the warning you need that it can get deep very quickly.

    That being said, it's an interesting topic to read about and you need to understand it for the Business Law CLEP. Both Google and Microsoft are contemporary companies that are being affected by this.

  • Employment Law - Another great article as the subject affects us all. Understand the acts, especially the Wagner Act, since you'll see it on other exams as well.
  • Creditors' Rights
  • Product Liability - I'm not completely satisfied with this source, but pay attention to the scenarios it contains. Know the different types of liabilities and when they would apply. You will almost certainly be tested on this.
  • Consumer Protection - Skip the other countries, but look over the United States' entry. Recognize the various Act's it mentions and read up on each for a few minutes.
  • International Business Law - The best overview I've found so far on this topic.

(10%-15% of the Introductory Business Law CLEP)

  • Torts - Just read the entire article. Know what a Tort is, and what does and doesn't qualify as a Tort. Know the difference between Negligence Torts and Intentional Torts. Know the different types of each.

    Though it's only 15% of the exam according to College Board, I had quite a few questions pertaining to Torts on my exam. Just make sure you understand the subject and you'll be fine.

(5%-10% of the Introductory Business Law CLEP)

  • Legal Agency - You'll probably be asked about this as well on the exam. Know the definitions of the key terms, such as Principal, power of attorney, and the different types of legal authority.
  • Legal Partnership - A good definition of a partnership, but also provides an quick list of the corporations.
  • Legal Corporations - A good article on Corporations, their pros and cons, and the different types of corporations.
  • Legal Sales - You'll need this information as well, so learn it well. For this subject, most of what you'll need for the Business Law CLEP can be found in the above link.
  • Uniform Commercial Code - You won't see too much of this on the Introductory Business Law CLEP so just give it a quick glance. It does feature prominently on the Business Law II DSST though so keep the knowledge in your back pocket for later.

History and Sources
(5%-10% of the Introductory Business Law CLEP)

  • History and Sources of American Law - The trick is not finding a source about talks about the History of American Law. The trick is finding a source that wasn't written by lawyers arguing with each other. :P Know where the American law system came from (English common law) and where it originates. Read the entire article and you should be covered for this section.
  • History of American Constitutional Law - It may be a bit dry, but soldier through it. The good news is that I don't remember too much of this on my own Introductory Business Law CLEP.

Legal System and Procedures
(5%-10% of the Introductory Business Law CLEP)

  • American Legal System - Just a basic understanding is enough for the Introductory Business Law CLEP.
  • American Legal Procedures - Don't skip this. Pay attention to what courts handle what cases, and understand the difference between district, federal, and appellate courts. The Business Law CLEP may give you a scenario and then ask what court would handle the case. Make sure you can answer them. Also know which court can overrule the others.

Recommended bargain-priced study resources

Always check your library first! You may be able to find some of these for free. You don't have to buy the officially recommended resources all the time. If you're the type of person that prefers to study from a textbook source however, then please see below.

Introductory Business Law (REA) - The Best Test Prep - This plus the InstaCert flashcards will get you through the the Introductory Business Law CLEP if you know the material. If your library doesn't have this book and you can't afford it, then look for the below book instead.

Business Law (Barron's Business Review Series) - Another option if you can't find the REA book above. I didn't like it as much as REA only because I found REA easier to read. It will prepare you just as well, so don't let my personal bias influence your choice. Much like the REA book, I would use this in conjunction with the InstantCert flashcards.

Standard Deviants: Business Law - Included in case, like me, you have a hard time staying awake when reading anything having to do with law.

InstantCert Academy Business Law Specific Exam Feedback - There's two downloadable study guides (Check out Snazzlefrag's especially) that really helped me. A total of six pages worth of targeted study so give it a look. Be sure to check out the InstantCert Flashcards for the Introductory Business Law CLEP as well.

If you don't know what InstantCert is, then click here for the scoop as well as a discount code: **InstantCert Academy**

You'll find an InstantCert link for every exam here if that gives you an idea of the amount of information they have available. It's an outstanding resource.

Closing Thoughts

Now a word of caution. I took failing this CLEP pretty hard, and went all out on the studying for the second attempt. Waiting six months to re-test can really put a crimp in your graduation schedule. Other people seem to have no problems with this CLEP, so this may be one of those level 5 difficulty exams that you can just blow through.

That being said, I'd still put some serious effort into studying for this one. It's worth 3 credits and is a requirement for almost every business degree out there. If that's your path then you'll want to pass this one on the first attempt. Use the above free resources, and if you're got a few bones in your pocket then give the REA and InstaCert a try. Take your time and knock this one out!

Best of luck!

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