Future Business Leaders of America (FBLA) Business Law Practice Exam

What term is used to describe any agreement that is enforceable by law?

1. Deal

2. Contract

3. Proposal

4. Arrangement

The correct answer is: Contract

The term that describes any agreement enforceable by law is "contract." A contract is a legally binding agreement between two or more parties that establishes rights and obligations concerning a particular subject matter. For an agreement to be considered a contract, it typically must involve an offer, acceptance, consideration (something of value exchanged), and the intent to create legal relations. Contracts can take various forms, including written documents, verbal agreements, or implied contracts based on actions. The enforceability of a contract exists as it is recognized by law, meaning that if one party does not fulfill their end of the agreement, the other party can seek legal remedies. In contrast, terms like "deal," "proposal," and "arrangement" may describe informal agreements or negotiations but do not inherently carry the same legal enforceability as a contract. These options either suggest an intention without the necessary legal framework or represent preliminary stages in the contracting process rather than complete, enforceable agreements. Hence, "contract" is the appropriate term for any agreement enforceable by law.