Concept of Law and General Provisions

Question 1

It is an act or omission by one person which causes damage to another there being negligence but no pre-existing contract between the two of them

Answer 1

Quasi-delict

Question 2

The entity having the right to demand the performance of obligation

Answer 2

Active subject or obligee or creditor

Question 3

It is the juridical necessity wherein a legal tie bounds a person to give, or to do, or not to do in favor of another who has the right to demand it

Answer 3

Obligation

Question 4

Which of the following is not within the scope of the Law on Obligations and Contracts

a. nature and sources of obligations
b. duties arising from agreements
c. rights arising from agreements
d. imprisonment for violations

Answer 4

imprisonment for violations

Question 5

It is the legal reason for the existence of obligation

Answer 5

Legal tie

Question 6

It is an act committed or omitted in violation of a law forbidding or commanding it and for which a punishment is imposed upon conviction

Answer 6

Delict

Question 7

Choose description/s that may apply to the Law on Obligations and Contracts

a. it is a substantive and a private law
b. it is a substantive and a public law
c. it is a private and an adjective law
d. it is a public and an adjective law

Answer 7

it is a substantive and a private law

Question 8

It is a juridical relation that arises when something is received when there is no right to demand it, and it was unduly delivered through mistake

Answer 8

Solutio indebti

Question 9

Which of the following is not required for the validity of contract?

Answer 9

Written document

Question 10

The bond that connects the parties to the obligation

Answer 10

Juridical or legal tie

Question 11

It is an obligation to give a determinate thing

Answer 11

Real specific obligation

Question 12

The entity bound to fulfill the obligation

Answer 12

Passive subject or obligor or debtor

Question 13

Which of the following carries legal consequences for disobedience?

a. state law
b. natural law
c. divine law
d. moral law

Answer 13

state law

Question 14

It is an obligation not to do a prohibited act

Answer 14

personal negative obligation

Question 15

It is an obligation to perform a required act

Answer 15

Personal positive obligation

Question 16

Which of the following is not a characteristic of state law?

a. for common observance and benefit
b. rule of conduct
c. approved by all the people
d. promulgated by legitimate authority

Answer 16

approved by all the people

Question 17

It is the subject matter of the obligation

Answer 17

prestation

Question 18

It is an obligation to give a thing belonging to a class

Answer 18

real generic obligation

Question 19

Which of the following is governed by state law

a. conduct
b. belief
c. ideology
d. idea

Answer 19

conduct

Question 20

The conduct required to be observed by the debtor

Answer 20

object or prestation

Question 21

Which of the following is passed by Congress?

a. constitution
b. jurisprudence
c. administrative orders
d. statute

Answer 21

statute

Question 22

It is a juridical relation arising from certain lawful, voluntary and unilateral acts, to the end that no one shall be unjustly enriched or benefited at the expense of another

Answer 22

quasi-contract

Question 23

It is a meeting of the minds between two persons whereby one binds himself, with respect to another, to give something or render some service

Answer 23

contract

Question 24

Mr. A signed a deed of sale in favor of Mr. B for the sale of his 1 hectare land for Php 1,000,000. Later on the day, Mr. A, had a change of heart and asked for more money and refused to vacate the land. While still in possession of the land, Mr. A promised to sell 1,000 coconuts from the same land to Mr. C who agreed to buy the same at Php 20 per kilo. Before Mr. C could pick up the coconuts, Mr. A sold the coconuts to Mr D for Php 25 per kilo. What are the rights of Mr. C, the first buyer of the coconuts?

A. Buy 1,000 coconuts from another at the expense of Mr. A plus damages
B. Demand the return by Mr. D of the coconuts plus damages
C. Demand that another 1,000 coconuts be delivered by Mr. A plus damages
D. All of the above

Answer 24

A. Buy 1,000 coconuts from another at the expense of Mr. A plus damages

Question 25

Mr. B and Mr. S entered into a contract of supply whereby Mr. S would supply Mr. B 100 cases of wine and, because of their closeness, they even inserted a provision that they could not file cases against each other even on grounds of fraud or negligence. Mr. S had already delivered 60 cases of wine when Mr. B discovered that Mr. S deliberately mixed the same with water. Nevertheless, Mr. B, not wanting to lose his line of supply, has agreed to sign a new waiver insofar as the 60 cases of wine are concerned. Which of the following is true?

Mr. B cannot file a case against Mr. S for fraud because there is a waiver of action against past fraud.
Mr. B can file a case against Mr. S for fraud, notwithstanding the waiver.
Mr. B cannot file a case against Mr. S for negligence because there is a waiver of action against negligence.
Mr. B can file a case against Mr. S for negligence, notwithstanding the waiver.

Answer 25

Mr. B cannot file a case against Mr. S for fraud because there is a waiver of action against past fraud.

Mr. B cannot file a case against Mr. S for negligence because there is a waiver of action against negligence.

Question 26

Who among the following is excused by reason of fortuitous event?

A debtor who, when about to pay Php 1,000 to his creditor, lost said money to a snatcher.
A carnapper who, stricken by conscience and wanted to return the car, lost said car due to flood.
A seller of a specific car who lost it, due to flood, the day after due date without ever attempting to deliver it.
An online seller who promised to deliver one and the same thing to several persons but lost it due to robbery

Answer 26

A seller of a specific car who lost it, due to flood, the day after due date without ever attempting to deliver it.

Question 27

Mr. D borrowed from Mr. C the amount of Php 120,000 plus 5 % interest per month, payable at 12 equal monthly installments starting on January and ending on December. What kind of contract is this?

Commodatum
Mutuum.
Depositum.
Barter

Answer 27

Mutuum.

Question 28

Mr. A contracted Band X to perform on February 14 a concert during the opening of his mall dubbed as Valentine’s Date. The agreed fee shall be paid on the said date. Band X did not appear, thinking that anyway they were not paid yet. What are the rights of Mr. A?

A. Secure another band to perform the concert at the expense of Band X plus damages
B. Demand specific performance plus damages
C. Send extrajudicial demand to Band X and insist that they perform immediately.
D. None of the above

Answer 28

A. Secure another band to perform the concert at the expense of Band X plus damages

Question 29

Mr. C contracts Mr. D to deliver a sensitive apparatus from the seller’s place to Mr. C’s business address. Since this is D’s first and only transaction of delivery, the parties were very careful in laying down the agreed requirements as to how the thing should be transported. What level of diligence is required to avoid liability?

Extraordinary diligence required of common carrier.
Stipulated diligence.
Ordinary diligence or diligence of a good father of a family
None of the above.

Answer 29

Stipulated diligence.

Question 30

If obligor fails to perform his obligation to deliver generic thing, what is the remedy of the obligee?

A. Ask for specific performance for the delivery of the thing plus damages
B. Both specific performance and rescission plus damages
C. Choose either specific performance or rescission plus damages
D. Ask that the obligation be complied at the expense of the obligor

Answer 30

Ask that the obligation be complied at the expense of the obligor

Question 31

Mr. B and Mr. S entered into a contract of supply whereby Mr. S would supply Mr. B 100 cases of wine and, because of their closeness, they even inserted a provision that they could not file cases against each other even on grounds of fraud or negligence. Later, Mr. S thought that he failed to get a good deal and, out of anger, he deliberately allowed the basement to be flooded causing floodwater to seep into the bottles. Which of the following is true?

Mr. B cannot file a case against Mr. S for fraud because there is a waiver of action against fraud.
Mr. B can file a case against Mr. S for fraud, notwithstanding the waiver.
Mr. B cannot file a case against Mr. S for negligence because there is a waiver of action against negligence.
Mr. B can file a case against Mr. S for negligence, notwithstanding the waiver.

Answer 31

Mr. B can file a case against Mr. S for negligence, notwithstanding the waiver.

Question 32

Which of the following is not true?

Causal fraud refers to deceit during the creation of the contract while incidental fraud may refer to deceit in the performance of obligation
Causal fraud affects validity of the contract while incidental fraud does not affect validity of contract.
Causal fraud happens only in contracts while incidental fraud may happen in all kinds of obligations.
Causal fraud may not be raised if there is a previous waiver while incidental fraud may be raised even if there is a previous waiver.

Answer 32

Causal fraud may not be raised if there is a previous waiver while incidental fraud may be raised even if there is a previous waiver.

Question 33

In determining whether a person’s negligence is the cause of the injury, which of the following is not true?

The negligence is the proximate cause that sets in motion a series of events that lead to the injury.
The intervening negligence of another person will excuse the negligence of the first wrongdoer.
To excuse the negligent, there must be, between his negligence and the injury an efficient intervening cause.
To be considered the proximate cause of the injury, the negligence need not be the event closest in time to the injury

Answer 33

The intervening negligence of another person will excuse the negligence of the first wrongdoer.

Question 34

Mr. D borrowed from Mr. C the amount of Php 120,000 plus 5 % interest per month, payable at 12 equal monthly installments starting on January and ending on December. On the month of May, Mr. C issued a receipt which reads: “I acknowledge receipt of Php 10,000 as installment for the month of May.” Which of the following best describes the situation

There is a presumption that the installments for the months January to April were already paid.
There is a presumption that the interest for the month of May was already paid.
Both presumptions are conclusive
Both presumptions are rebuttable.

Answer 34

Both presumptions are rebuttable.

Question 35

It is a right that is binding upon a definite passive subject only and cannot be invoked against all

A. Real right
B. Personal right
C. Human right
D. Ownership right

Answer 35

B. Personal right

Question 36

When is ownership over the fruits transferred?

A. Date of the agreement
B. Due date of the delivery of the principal
C. Due date of the delivery of the fruits
D. Date of the delivery of the fruits

Answer 36

D. Date of the delivery of the fruits

Question 37

Mr. D borrowed from Mr. C the amount of Php 120,000 plus 5 % interest per month, payable at 12 equal monthly installments starting on January and ending on December. What rate of interest can Mr. C collect from Mr. D?

5 % per month or 60 % per year.
1 % per month or 12 % per year.
0 % interest
compounded interest

Answer 37

1 % per month or 12 % per year

Question 38

Who are not liable for damages?

A. Those who are negligent at the time of creation of contract.
B. Those who employ deceit at the time of creation of contract.
C. Those who are negligent in the performance of their obligation.
D. Those who employ fraud in the performance of their obligation.

Answer 38

Those who are negligent at the time of creation of contract

Question 39

Mr. A contracted Band X to perform on February 14 a concert during the opening of his mall dubbed as Valentine’s Date. The agreed fee shall be paid on the said date. Band X did not appear, thinking that anyway they were not paid yet. Which of the following is true?

A. Band X is liable for delay and breach because it is in mora accipiendi
B. Band X is not liable for delay because there is no demand made by Mr. A
C. Band X is liable for delay and breach because it is in mora solvendi
D. The parties are not liable to each other because they are in compensatio morae

Answer 39

C. Band X is liable for delay and breach because it is in mora solvendi

Question 40

Who are not liable for damages?

A. Those who are negligent at the time of creation of contract.
B. Those who employ deceit at the time of creation of contract.
C. Those who are negligent in the performance of their obligation.
D. Those who employ fraud in the performance of their obligation.

Answer 40

A. Those who are negligent at the time of creation of contract.

Question 41

If the parties have stipulated on how to handle the thing due, what is the kind of diligence that must be observed by the obligor?

A.Diligence of a good father of a family
B.Contractual diligence
C.Extraordinary diligence
D.Ordinary diligence

Answer 41

B. Contractual diligence

Question 42

Mr. A signed a deed of sale in favor of Mr. B for the sale of his 1 hectare land for Php 1,000,000. Later on the day, Mr. A, had a change of heart and asked for more money and refused to vacate the land. While still in possession of the land, Mr. A promised to sell 1,000 coconuts from the same land to Mr. C who agreed to buy the same at Php 20 per kilo. Before Mr. C could pick up the coconuts, Mr. A sold the coconuts to Mr D for Php 25 per kilo. What are the rights of Mr. B, the buyer of the land?

A.Demand specific performance for the delivery of the land plus damages
B.Demand for rescission of the contract plus damages
C.Demand both specific performance and rescission of contract
D.Choose either specific peformance or rescission plus damages

Answer 42

D. Choose either specific peformance or rescission plus damages

Question 43

If the parties have stipulated on how to handle the thing due, what is the kind of diligence that must be observed by the obligor?

Answer 43

Contractual Diligence

Question 44

Mr. C contracts Mr. D to deliver a sensitive apparatus from the seller’s place to Mr. C’s business address. Assuming that there was no set of requirements as to how the thing should be transported, what level of diligence is required to avoid liability?

Extraordinary diligence required of common carrier.
Stipulated diligence.
Ordinary diligence or diligence of a good father of a family
None of the above.

Answer 44

Ordinary diligence or diligence of a good father of a family

Question 45

Mr. B and Mr. S entered into a contract of supply whereby Mr. S would supply Mr. B 100 cases of wine and, because of their closeness, they even inserted a provision that they could not file cases against each other even on grounds of fraud or negligence. Mr. S had already delivered 60 cases of wine when Mr. B discovered that Mr. S deliberately mixed the same with water. Which of the following is true?

A. Mr. B cannot file a case against Mr. S for fraud because there is a waiver of action against fraud.
B. Mr. B can file a case against Mr. S for fraud, notwithstanding the waiver.
C. Mr. B cannot file a case against Mr. S for negligence because there is a waiver of action against negligence.
D. Mr. B can file a case against Mr. S for negligence, notwithstanding the waiver.

Answer 45

B. Mr. B can file a case against Mr. S for fraud, notwithstanding the waiver.

Question 46

If obligor fails to comply with his real specific obligation, what is the remedy of the obligee? Choose the best answer

A. Ask for specific performance for the delivery of the thing plus damages
B. Ask for rescission of the contract plus damages
C. Both specific performance and rescission plus damages
D. Choose either specific performance or rescission plus damages

Answer 46

D. Choose either specific performance or rescission plus damages

Question 47

Mr. A signed a deed of sale in favor of Mr. B for the sale of his 1 hectare land for Php 1,000,000. Later on the day, Mr. A, had a change of heart and asked for more money and refused to vacate the land. While still in possession of the land, Mr. A promised to sell 1,000 coconuts from the same land to Mr. C who agreed to buy the same at Php 20 per kilo. Before Mr. C could pick up the coconuts, Mr. A sold the coconuts to Mr D for Php 25 per kilo. Who is the owner of the coconuts?

A. Mr. A
B. Mr. B
C. Mr. C
D. Mr. D

Answer 47

D. Mr. D

Question 48

Mr. A signed a deed of sale in favor of Mr. B for the sale of his 1 hectare land for Php 1,000,000. Later on the day, Mr. A, had a change of heart and asked for more money and refused to vacate the land. While still in possession of the land, Mr. A promised to sell 1,000 coconuts from the same land to Mr. C who agreed to buy the same at Php 20 per kilo. Before Mr. C could pick up the coconuts, Mr. A sold the coconuts to Mr D for Php 25 per kilo. As to the coconuts, which of the following is true?

A. Mr. B has a real right over the coconuts while Mr. C and Mr. D have personal rights
B. Mr. C has a real right over the coconuts while Mr. B and Mr. D have personal rights
C. Mr. D has a real right over the coconuts while Mr. B and Mr. C have personal rights
D. All three of them have personal rights

Answer 48

C. Mr. D has a real right over the coconuts while Mr. B and Mr. C have personal rights

Question 49

If obligor fails to perform his obligation to do, what is the remedy of the obligee?

A. Ask for specific performance for the performance of the act required
B. Both specific performance and rescission plus damages
C. Choose either specific performance or rescission plus damages
D. Ask that the obligation be complied at the expense of the obligor

Answer 49

D. Ask that the obligation be complied at the expense of the obligor

Question 50

Which of the following is not true?

a) Obligation with a period is one that depends upon arrival of a day certain
b) Conditional obligation is one that depends upon the happening of an uncertain event.
c) Pure obligation does not depend on arrival of day certain nor on happening of uncertain event
d) Protestative obligation is one where the debtor promises to pay when his means permit.

Answer 50

d) Protestative obligation is one where the debtor promises to pay when his means permit.

Question 51

“I promise to pay Php 10,000.”

a) Obligation with a period
b) Conditional obligation
c) Pure obligation
d) Void obligation

Answer 51

c) Pure obligation

Question 52

“I promise to pay Php 10,000 little by little”

a) Obligation with a period
b) Conditional obligation
c) Pure obligation
d) Void obligation

Answer 52

a) Obligation with a period

Question 53

“I promise to pay Php 10,000 once I get a job at AdDU where I already applied”

a) Obligation with a period
b) Conditional obligation
c) Pure obligation
d) Void obligation

Answer 53

b) Conditional obligation

Question 54

“I will apply for loan from your cooperative once I have a livelihood”

a) Obligation with a period
b) Conditional obligation
c) Pure obligation
d) Void obligation

Answer 54

d) Void obligation

Question 55

Which of the following is not true?

a) Pure obligation is demandable.
b) Obligation with a suspensive condition is demandable at once.
c) Obligation with a resolutory condition is demandable at once.
d) Obligation with a suspensive period is demandable at once.

Answer 55

d) Obligation with a suspensive period is demandable at once.

Question 56

Which of the following is demandable at once?

a) “I promise to pay Php 10,000.”
b) “I promise to pay Php 10,000 little by little”
c) “I promise to pay Php 10,000 once I get a job at AdDU where I already applied”
d) None of the above

Answer 56

a)“I promise to pay Php 10,000.”

Question 57

Which of the following is conditional obligation?

a) “I promise to pay Php 10,000.”
b) “I promise to pay Php 10,000 little by little”
c) “I promise to pay Php 10,000 once I get a job at AdDU where I already applied”
d) None of the above

Answer 57

c) “I promise to pay Php 10,000 once I get a job at AdDU where I already applied”

Question 58

Which of the following is not valid obligations?

a) I will buy your car at your asking price the moment I finish constructing my garage.
b) I will buy your car at your asking price the moment Metrobank will approve my loan application.
c) I will buy your car at your asking price if you will not convert it into a plane on or before I take it on Dec 31, 20XX
d) I will pay the balance of the price of the car already on my possession once I finish constructing my garage.

Answer 58

a) I will buy your car at your asking price the moment I finish constructing my garage.

Question 59

Mr. A signed a deed of sale in favor of Mr. B for the sale of his 1 hectare land for Php 1,000,000. Later on the day, Mr. A, had a change of heart and asked for more money and refused to vacate the land. While still in possession of the land, Mr. A promised to sell 1,000 coconuts from the same land to Mr. C who agreed to buy the same at Php 20 per kilo. Before Mr. C could pick up the coconuts, Mr. A sold the coconuts to Mr D for Php 25 per kilo. Which of the following is true?

a) Mr. B has a real right over the coconuts while Mr. C and Mr. D have personal rights
b) Mr. C has a real right over the coconuts while Mr. B and Mr. D have personal rights
c) Mr. D has a real right over the coconuts while Mr. B and Mr. C have personal rights
d) All three of them have personal rights

Answer 59

c) Mr. D has a real right over the coconuts while Mr. B and Mr. C have personal rights

Question 60

On Jan 1, 20XX, Mr. A and Mr. B entered into a contract to sell over 1 hectare of land, whereby the former, for and in consideration of the reservation fee of Php 50 thousand, promised to sell the land to the latter for Php 1 million if the government will construct a road adjacent to it within the same year. Indeed a road was constructed and completed on Dec 25 of the same year. However, as early as May 22 of the same year, Mr. A sold the land to Mr. C who intentionally outbidded Mr. B and paid Php 1.2 million for the land. A week later, Mr. A sold the coconuts to Mr. D who paid for, and took, it on May 29. As to the land which of the following is true?

a) Mr. A, being the owner, has a right to sell the land to whomsoever he may choose.
b) Mr. B has a better right over the land because the happening of the condition on December 25 gave him a right over the land as early as January 1.
c) Mr. C has a better right over the land because on May 22, he paid more and ahead of Mr. B and D;
d) Mr. D has a better right over the land because he immediately took possession over the fruits thereof on May 29

Answer 60

b) Mr. B has a better right over the land because the happening of the condition on December 25 gave him a right over the land as early as January 1.

Question 61

On Jan 1, 20XX, Mr. A and Mr. B entered into a contract to sell over 1 hectare of land, whereby the former, for and in consideration of the reservation fee of Php 50 thousand, promised to sell the land to the latter for Php 1 million if the government will construct a road adjacent to it within the same year. Indeed a road was constructed and completed on Dec 25 of the same year. However, as early as May 22 of the same year, Mr. A sold the land to Mr. C who intentionally outbidded Mr. B and paid Php 1.2 million for the land. A week later, Mr. A sold the coconuts to Mr. D who paid for, and took, it on May 29. Which of the following is true in relation to the coconuts?

a) Mr. A has a right to sell the coconuts because the happening of the condition has no retroactive effect on the transactions over the fruits;
b) Mr. B has a better right over the coconuts because the happening of the condition on December 25 will retroact to January 1, giving him a right over the land and its fruits as early as that date.
c) Mr. C has a better right over the coconuts because on May 22, he paid ahead of Mr. B and Mr. d.
d) Mr. D has no right over the coconuts because of the principle “accessory follows the principal”

Answer 61

a) Mr. A has a right to sell the coconuts because the happening of the condition has no retroactive effect on the transactions over the fruits;

Question 62

Mr. Chef and Mr. Cook entered into a sale by installment whereby the restaurant of Mr. Chef was sold to Mr. Cook for Php 12 million to be paid in 12 equal installments of Php 1 million per month. Mr. Cook paid religiously for the first 9 months and Mr. Chef deposited the proceeds to the bank to earn interests. Mr. Cook, however, failed to pay the installments for the 10th, 11th and 12th months. Which of the following is true?

a) The obligations to pay the 10th, 11th and 12th installments months are obligations with suspensive condition;
b) The obligations to pay the 10th, 11th and 12th installments are obligations with suspensive period;
c) The failure to pay the 10th, 11th and 12th installments are resolutory periods

Answer 62

b) The obligations to pay the 10th, 11th and 12th installments are obligations with suspensive period;

Question 63

Mr. Chef and Mr. Cook entered into a sale by installment whereby the restaurant of Mr. Chef was sold to Mr. Cook for Php 12 million to be paid in 12 equal installments of Php 1 million per month. Mr. Cook paid religiously for the first 9 months and Mr. Chef deposited the proceeds to the bank to earn interests. Mr. Cook, however, failed to pay the installments for the 10th, 11th and 12th months. Which of the following is not true?

a) Mr. Chef is entitled to file a case for fulfillment and rescission plus damages.
b) Mr. Chef is entitled to choose either a case for fulfillment or a case for rescission plus damages.
c) Mr. Chef is entitled to file a case for fulfillment plus damages, then file a case for rescission plus damages if fulfillment is impossible.
d) Mr. Chef is entitled to file a case for rescission plus damages even if the right of rescission is not stated in the contract.

Answer 63

a) Mr. Chef is entitled to file a case for fulfillment and rescission plus damages.

Question 64

Mr. Chef and Mr. Cook entered into a sale by installment whereby the restaurant of Mr. Chef was sold to Mr. Cook for Php 12 million to be paid in 12 equal installments of Php 1 million per month. Mr. Cook paid religiously for the first 9 months and Mr. Chef deposited the proceeds to the bank to earn interests. Mr. Cook, however, failed to pay the installments for the 10th, 11th and 12th months. Worse, Mr. Cook sold the restaurant to Mr. Kusinero who bought it without knowing that Mr. Cook still had obligations to Mr. Chef. Which of the following is true?

a) Mr. Chef is entitled to rescission and can get back his restaurant from Mr. Kusinero who would have to get back his money from Mr. Cook.
b) Mr. Chef is entitled to fulfillment and damages from Mr. Cook.
c) Mr. Chef is entitled to rescission to get back his restaurant from Mr. Kusinero and fulfillment to get back the remaining 3 installments from Mr. Cook.
d) Mr. Chef cannot get rescission or fulfillment because they are not stated in the contract.

Answer 64

b) Mr. Chef is entitled to fulfillment and damages from Mr. Cook.

Question 65

Mr. Chef and Mr. Cook entered into a sale by installment whereby the restaurant of Mr. Chef was sold to Mr. Cook for Php 12 million to be paid in 12 equal installments of Php 1 million per month. Mr. Cook paid religiously for the first 9 months and Mr. Chef deposited the proceeds to the bank to earn interests. Mr. Cook, however, failed to pay the installment for the 10th, 11th and 12th months. Mr. Chef, angry that Mr. Cook failed to pay installments, put up, on the 11th month, a new restaurant adjacent to his former restaurant, in clear violation of their contract that provides for “non-competition for 1 year.” Which of the following is true?

a) They are both infractors and they shall pay damages to each other.
b) They are both infractors and they shoulder their own damages
c) Mr. Cook is the first infractor and he is liable for all damages suffered by Mr. Chef.
d) Mr. Cook is the first infractor but his liability for damages shall be reduced by the court.

Answer 65

d) Mr. Cook is the first infractor but his liability for damages shall be reduced by the court.

Question 66

On Jan 1, 2020 Mr. D received a loan and signed a promissory note: “I promise to pay Mr. C the amount of Php 1 million within 3 months from the signing of this note.” For whose benefit the period was created?

a) It is presumed to be for the benefit of both debtor and creditor.
b) It is for the benefit of the creditor who can collect anytime within 3 months.
c) It is for the benefit of the debtor who may pay anytime within 3 months
d) It is not clear at all and the court shall fix the period.

Answer 66

c) It is for the benefit of the debtor who may pay anytime within 3 months

Question 67

On Jan 1, 2020 Mr. D received a loan and signed a promissory note: “I promise to pay Mr. C the amount of Php 1 million within 3 months from the signing of this note.” When is the due date?

a) April 1 , 2020, as this is 3 calendar months from the signing.
b) April 1, 2020, as this is the 90th day from the signing, with Jan 2 being the first day.
c) March 31, 2020, as this is the 90th day from the signing, with Jan 2 being the first day.
d) March 30, 2020, as this is the 90th day from the signing, with Jan 1 being the first day.

Answer 67

c) March 31, 2020, as this is the 90th day from the signing, with Jan 2 being the first day.

Question 68

On Jan 1, 2020 Mr. D received a loan and signed a promissory note: “I promise to pay Mr. C the amount of Php 1 million within 3 months from the signing of this note.” Mr. C wants to collect interest. Which of the following is true?

a) Mr. A can collect the same rate of interest that he is imposing upon other debtors.
b) Mr. A can collect thelegal rate of interest of 12 % per year.
c) Mr. A cannot collect interest
d) Mr. A can file a case to ask the court to fix interest.

Answer 68

c) Mr. A cannot collect interest

Question 69

In relation to the same problem, Mr. C came to know that Mr. D’s vehicle that was made as collateral to secure the debt was totally damaged after being bumped from behind by an over speeding truck. Which of the following is the best statement?

a) Mr. C can collect because the 90-day period was intended for creditor’s benefit.
b) Mr. C cannot collect because the 90-day period was intended for debtor’s benefit.
c) Mr. C can now collect because the debtor can no longer avail of the period because the security has been impaired.
d) Mr. C can demand for another security of the same value.

Answer 69

d) Mr. C can demand for another security of the same value.

Question 70

Mr. X and Mr. Y entered into a contract to sell whereby Mr. X, for and in consideration of the reservation fee of Php 100,000, promised to sell to Mr Y a house and lot if the latter would pay Php 10 million on or before Dec 31, 20XX. Which of the following is/are true?

a) This is an obligation with a suspensive condition and Article 1189 will apply
b) This is an obligation with a resolutory condition and Article 1189 will apply.
c) This is an obligation with a suspensive period and Article 1189 will apply.
d) This is an obligation with a resolutory condition and Article 1189 will apply

Answer 70

c) This is an obligation with a suspensive period and Article 1189 will apply.

Question 71

Mr. X and Mr. Y entered into a contract to sell whereby Mr. X, for and in consideration of the reservation fee of Php 100,000, promised to sell to Mr Y a house and lot if the latter would pay Php 10 million on or before Dec 31, 20XX. Prior to the due date, the house was struck by lightning causing substantial damage. Which of the following is/are true?

a) Mr. Y can ask for reduction of the price as it was not his fault.
b) Mr. Y can ask for rescission of the contract as the thing was substantially impaired.
c) Mr. Y will just have to bear the impairment.
d) Mr. Y can ask Mr. X to restore the house to its former condition.

Answer 71

c) Mr. Y will just have to bear the impairment.

Question 72

Mr. X and Mr. Y entered into a contract to sell whereby Mr. X, for and in consideration of the reservation fee of Php 100,000, promised to sell to Mr Y a house and lot if the latter would pay Php 10 million on or before Dec 31, 20XX. Prior to the due date, Mr. X, on his own, voluntarily repaired and repainted the house and even added a terrace. Which of the following is true?

a) Mr. X can demand reimbursement of his expenses.
b) Mr. X can demand additional price because the house is more beautiful.
c) Mr. X can just demand the original price of the house.
d) Mr. X, in the meantime, can offer to sell the house to another buyer as it is now improved.

Answer 72

c) Mr. X can just demand the original price of the house.

Question 73

Mr. X and Mr. Y entered into a contract to sell whereby Mr. X, for and in consideration of the reservation fee of Php 100,000, promised to sell to Mr Y a house and lot if the latter would pay Php 10 million on or before Dec 31, 20XX. Prior to the due date, a public park was built in front of the property thereby increasing its market value. Which of the following is true?

a) Mr. X can demand reimbursement of his expenses.
b) Mr. X can demand additional price because the house is more beautiful.
c) Mr. X can just demand the original price of the house.
d) Mr. X can ask for rescission as what he is going to let go is more valuable than what he is going to receive.

Answer 73

c) Mr. X can just demand the original price of the house.

Question 74

Which of the following is the best statement?

A) Distributive obligation means there are several prestations and all are to be fulfilled; while conjunctive obligation means there are several prestations but only one needs to be fulfilled.
B) Conjunctive obligation means there are several prestations and all are to be fulfilled; while distributive obligation means there are several prestations but only one needs to be fulfilled
C) Facultative obligation means several prestations are agreed but only one is to be fulfilled; while alternative obligation means only one prestation has been agreed but obligor may render a substitute.
D) Alternative obligation means several prestations are agreed but only one is to be fulfilled; while facultative obligation means only one prestation has been agreed but obligor may render a substitute.
E) Both A and C are true.
F) Both B and D are true.

Answer 74

F) Both B and D are true.

Question 75

“For 10 million, I am going to sell to you Lot A with its house.”

A) Simple obligation
B) Conjunctive obligation
C) Alternative obligation
D) Facultative obligation

Answer 75

A) Simple obligation

Question 76

“For 10 million, I am going to sell to you Lot A with its house or Lot B with its house.”

A) Simple obligation
B) Conjunctive obligation
C) Alternative obligation
D) Facultative obligation

Answer 76

C) Alternative obligation

Question 77

“For 10 million, I am going to sell to you Lot C and construct a house thereon”

A) Simple obligation
B) Conjunctive obligation
C) Alternative obligation
D) Facultative obligation

Answer 77

B) Conjunctive obligation

Question 78

“For 10 million, I am going to sell to you Lot A with its house. At my option, i may deliver to you a different lot of similar size with a house of similar design.”

A) Simple obligation
B) Conjunctive obligation
C) Alternative obligation
D) Facultative obligation

Answer 78

D) Facultative obligation

Question 79

Mr. Lessor and Mr. Farmer entered into a contract whereby the former, for and in consideration of Php 100,000, would lease to the latter one-month use of one truck out of his fleet of 5 trucks come banana season, to be used in carrying the latter’s bananas from the plantation to the port. When banana season arrived, the engine of truck A was being repaired. The registration of truck B expired without being renewed. Truck C was already converted into a water truck. Truck D and truck E are still available. Which of the following is correct?

A) Mr. Lessor can choose either A, B, C, D or E
B) Mr. Farmer can choose either truck D or truck E
C) Mr. Lessor can choose either truck D or truck E
D) Mr. Lessor and Mr. Farmer must agree which one.

Answer 79

C) Mr. Lessor can choose either truck D or truck E

Question 80

Mr. Lessor and Mr. Farmer entered into a contract whereby the former, for and in consideration of Php 100,000, would lease to the latter one-month use of one truck out of his fleet of 5 trucks come banana season, to be used in carrying the latter’s bananas from the plantation to the port. When banana season arrived, the engine of truck A was being repaired. The registration of truck B expired without being renewed. Truck C was already converted into a water truck. Truck D and truck E are still available. Suppose Mr. Lessor communicated to Mr. Farmer his choice of truck D as the one available for the use of the latter, which of the following is true?

A) Mr. Farmer can ask for truck E.
B) Mr. Lessor can later change his mind and offer truck A once its engine is repaired.
C) Both may agree that it will be truck B.
D) Mr. Farmer can ask for rescission and demand the return of his Php 100,000.
E) None of the above

Answer 80

E) None of the above

Question 81

Mr. Lessor and Mr. Farmer entered into a contract whereby the former, for and in consideration of Php 100,000, would lease to the latter one-month use of one truck out of his fleet of 5 trucks come banana season, to be used in carrying the latter’s bananas from the plantation to the port. When banana season arrived, the engine of truck A was being repaired. The registration of truck B expired without being renewed. Truck C was already converted into a water truck. Truck D and truck E are still available and Mr. Lessor chose truck D as the one available for the use of Mr. Farmer. Suppose after the 1st day of the lease, truck D was ambushed and torched by local bandits. Which of the following is true?

A) Mr. Farmer is liable for the value of the truck that he can no longer return.
B) Mr. Lessor is liable to return the advance rent for the remaining 29 days.
C) Mr. Lessor bears the loss of his truck and Mr. Farmer bears the loss of his advance rent.
D) Mr. Farmer can now insist on the use of truck E without paying another rent

Answer 81

C) Mr. Lessor bears the loss of his truck and Mr. Farmer bears the loss of his advance rent.

Question 82

Mr. Lessor and Mr. Farmer entered into a contract whereby the former, for and in consideration of Php 100,000, would lease to the latter one-month use of one truck out of his fleet of 5 trucks come banana season, to be used in carrying the latter’s bananas from the plantation to the port. When banana season arrived, the engine of truck A was being repaired. The registration of truck B expired without being renewed. Truck C was already converted into a water truck. Truck D and truck E are still available and Mr. Lessor decided to let truck D to Mr. Farmer but before he could communicate his choice, truck D was ambushed and torched by local bandits. Which of the following is true?

A) Mr. Lessor is liable to return the advance rent.
B) Mr. Lessor bears the loss of his truck and Mr. Farmer bears the loss of his advance rent.
C) Mr. Farmer can now insist on the use of truck E.
D) Mr. Farmer can ask for rescission

Answer 82

C) Mr. Farmer can now insist on the use of truck E.

Question 83

For an already existing obligation of Php 100 thousand, Mr. D promised to deliver and pledge to Mr. C his diamond ring on Dec 31, 20XX with a condition that if he can get his gold necklace from his son, he might decide to deliver and pledge it, instead of the diamong ring, to Mr C. Which of the following is true?

A) Mr. C can insist that it should be the diamond ring that should be pledged.
B) Mr. C can insist that it should be the gold necklace that should be pledged.
C) Mr. D can choose to pledge either the diamond ring or the gold necklace.
D) None of the above

Answer 83

C) Mr. D can choose to pledge either the diamond ring or the gold necklace.

Question 84

For an already existing obligation of Php 100 thousand, Mr. D promised to deliver and pledge to Mr. C his diamond ring on Dec 31, 20XX with a condition that if he can get his gold necklace from his son, he might decide to deliver and pledge it, instead of the diamong ring, to Mr C. Suppose the gold necklace was lost before Mr. D can decide on substitution. Which of the following is true?

A) The obligation to pay Php 100 thousand is extinguished.
B) The obligation to pledge diamond ring is extinguished.
C) The obligation to pledge gold necklace is extinguished.
D) None of the above.

Answer 84

D) None of the above.

Question 85

For an already existing obligation of Php 100 thousand, Mr. D promised to deliver and pledge to Mr. C his diamond ring on Dec 31, 20XX with a condition that if he can get his gold necklace from his son, he might decide to deliver and pledge it, instead of the diamong ring, to Mr C. Suppose the diamond ring was lost before Mr. D can decide on substitution. Which of the following is true?

A) The obligation to pay Php 100 thousand is extinguished.
B) The obligation to pledge diamond ring is extinguished.
C) The obligation to pledge gold necklace is extinguished.
D) None of the above.

Answer 85

B) The obligation to pledge diamond ring is extinguished.

Question 86

In comparing alternative obligation and facultative obligation, which of the following is not true?

A) In alternative obligation, there are several prestations but only one is to be fulfilled; while in facultative obligation, there is only one prestation but debtor may choose to substitute it with another;
B) In alternative obligation, the choice belongs to the debtor unless expressly granted to the creditor; in facultative obligation, the right to substitute always belongs to the debtor;
C) In alternative obligation, the fortuitous loss of one prestation will not extinguish the obligation; while in facultative obligation, the fortuitous loss of the original prestation will extinguish the obligation.
D) In alternative obligation, the loss of one prestation due to debtor’s fault who has a right of choice will make him liable; while in facultative obligation, the loss of original prestation due to debtor’s fault will make him liable.

Answer 86

D) In alternative obligation, the loss of one prestation due to debtor’s fault who has a right of choice will make him liable; while in facultative obligation, the loss of original prestation due to debtor’s fault will make him liable.

Question 87

Which of the following is the best statement?

A) In passive joint obligation, each of the debtors can be required to pay the entire obligation; while in passive solidary obligation, each of the debtors may pay only his share.
B) In passive solidary obligation, each of the debtors can be required to pay the entire prestation; while in passive joint obligation, each of the debtors may pay only his share.
C) In active joint obligation, each of the creditors can demand the entire prestation; while in active passive obligation each of the creditors can demand only his share.
D) In active solidary obligation, each of the creditors can demand the entire prestation; while in active joint obligation each of the creditors can demand only his share.
E) A and C are correct
F) B and D are correct

Answer 87

F) B and D are correct

Question 88

Which of the following is the best answer

A) If there are two or more debtors or two or more creditors, the presumption is that the obligation is solidary.
B) If there are two or more debtors or two or more creditors, the presumption is that the obligation is joint
C) Both A and B are true
D) Both A and B are false

Answer 88

B) If there are two or more debtors or two or more creditors, the presumption is that the obligation is joint

Question 89

“We promise to pay Php 1 million to CorpX” signed A and B. What is the kind of obligation?

A) Active solidary obligation
B) Passive solidary obligation
C) Active joint obligation
D) Passive joint obligation

Answer 89

D) Passive joint obligation

Question 90

Landowner X and Developer Y, “seller,” and Mr. B, “buyer,” entered into a Contract to Sell over Lot # 1 for the price of Php 2 million. What is the kind of obligation as to the delivery of Lot # 1?

A) Active solidary obligation
B) Passive solidary obligation
C) Active joint obligation
D) Passive joint obligation

Answer 90

B) Passive solidary obligation

Question 91

Mr. A, Mr. B and Mr. C promised to pay Php 9 million in solidum to CoopX on Dec 31, 20XX. Which of the following is true?

A) CoopX can demand the entire Php 9 million from Mr. A or from Mr. B or from Mr. C or from all.
B) CoopX must demand the entire Php 9 million from all.
C) CoopX, once it has demanded the entire Php 9 million from Mr. A, can no longer demand from Mr. B or Mr. C.
D) CoopX, once it has collected the entire Php 9 million from Mr. A, can still demand from Mr. B or Mr. C.

Answer 91

A) CoopX can demand the entire Php 9 million from Mr. A or from Mr. B or from Mr. C or from all.

Question 92

Mr. A, Mr. B and Mr. C promised to pay Php 9 million in solidum to CoopX on Dec 31, 20XX. Suppose Mr. A paid CoopX the full Php 9 million, which of the following is true?

A) Mr. A can demand reimbursement of Php 9 million from Mr. B and Mr. C.
B) Mr. A can demand reimbursement of Php 6 million from Mr. B who, in turn, can demand reimbursement of Php 3 million from Mr. C.
C) Mr. A can demand reimbursement of Php 3 million from Mr. B and another reimbursement of Php 3 million from Mr. C.
D) Mr. A cannot demand reimbursement as it is not stated in the contract.

Answer 92

C) Mr. A can demand reimbursement of Php 3 million from Mr. B and another reimbursement of Php 3 million from Mr. C.

Question 93

Mr. A, Mr. B and Mr. C promised to pay Php 9 million in solidum to CoopX on Dec 31, 20XX. Suppose Mr. A paid Mr. X the full amount of Php 9 million not on Dec 31, 20XX but on May 22, 20XX. Mr. A now wants to be reimbursed not only for the shares of Mr. B and Mr. C but also interests on the said shares. Which of the following is true?

A) Mr. A can demand interest from May 22, 20XX to the date of actual reimbursement.
B) Mr. A can demand interest from May 22, 20XX to Dec 31, 20XX.
C) Mr. A can demand interest from Jan 1, 20X1 to the date of actual reimbursement.
D) A cannot demand interest as it is not stated in the contract.

Answer 93

C) Mr. A can demand interest from Jan 1, 20X1 to the date of actual reimbursement.

Question 94

Mr. A, Mr. B and Mr. C promised to pay Php 9 million in solidum to CoopX on Dec 31, 20XX. Suppose Mr. A paid in full and now wants to be reimbursed by Mr. B and Mr. C for their shares. But Mr. C has become insolvent. Which of the following is/are true?

A) Mr. A can demand reimbursement from Mr. B Php 6 million out of the Php 9 million because he (A) intended and undertook to shoulder only Php 3 million
B) Mr. A can demand reimbursement from Mr. B only Php 3 million out of the Php 9 million because Mr. B intended and undertook to shoulder only Php 3 million.
C) Mr. A can demand reimbursement from Mr. B of Php 3 million plus Php 1.5 million which is equivalent to 1/2 of the share of Mr. C.
D) None of the above.

Answer 94

C) Mr. A can demand reimbursement from Mr. B of Php 3 million plus Php 1.5 million which is equivalent to 1/2 of the share of Mr. C.

Question 95

Maria, Juana and Rosa, a minor, borrowed Php 9 million from Pedro, Juan and Pablo. They agreed that the obligation is solidary. Later, Juan was so smitten by Juana that he, in a moment of unconditional love, wrote her a letter saying that she no longer have to pay her share. Juan did it without informing Pedro and Pablo. Which of the following is true?

A) Pedro and Pablo can claim the obligation including the Php 3 million share of Juana because the remission by Juan was not authorized by them.
B) Pedro and Pablo can claim the obligation less the Php 3 million share of Juana.
C) Pedro and Pablo can claim the obligation less the Php 3 million share of Juana and demand the same from the solidary debtors including Juana.
D) None of the above.

Answer 95

B) Pedro and Pablo can claim the obligation less the Php 3 million share of Juana.

Question 96

Maria, Juana and Rosa, a minor, borrowed Php 9 million from Pedro, Juan and Pablo. They agreed that the obligation is solidary. Later, Juan was so smitten by Juana that he, in a moment of unconditional love, wrote her a letter saying that she no longer have to pay her share. Juan did it without informing Pedro and Pablo. Pedro and Pablo failed to collect any from Juana and now they sue Maria and Rosa for the entire Php 9 million. Which of the following best describes the defenses of Maria and Rosa?

A) Maria and Rosa can raise a defense that the Php 3 million share of Juana be deducted from the obligation by reason of remission.
B) Maria and Rosa can raise a defense that the Php 3 million share of Rosa be deducted from the obligation because it was not valid as Rosa was a minor when the debt was contracted.
C) Maria can claim that since one of them was a minor when the obligation was contracted, the entire obligation is void.
D) A and B are correct
E) B and C are correct
F) A and C are correct.

Answer 96

D) A and B are correct

Question 97

Maria, Juana and Rosa, a minor, borrowed Php 9 million from Pedro, Juan and Pablo. They agreed that the obligation is solidary. Later, Juan was so smitten by Juana that he, in a moment of unconditional love, wrote her a letter saying that she no longer have to pay her share. Juan did it without informing Pedro and Pablo. Suppose that Pedro and Pablo were able to collect Php 3 million from Maria but got nothing from Rosa and Juana. Which of the following best describes the relationship between and among solidary creditors?

A) Juan had to pay Php 3 million to Pedro and Pablo by reason of his unauthorized Php 3 million remission in favor of Juana, less his Php 1 million share from the amount collected from Maria.
B) Juan had to pay Php 2 million to Pedro and Pablo as the latters’ share in the amount that should have been paid by Juana, less his Php 1 million share from the amount collected from Maria.
C) Juan need not pay any amount to Pedro and Pablo because the remission was valid and he (Juan) can still collect the Php 1 million share from the amount collected from Maria.
D) Juan need not pay any amount to Pedro and Pablo and just let the two of them divide the Php 3 million they collected from Maria

Answer 97

B) Juan had to pay Php 2 million to Pedro and Pablo as the latters’ share in the amount that should have been paid by Juana, less his Php 1 million share from the amount collected from Maria.

Question 98

Maria, Juana and Rosa, a minor, borrowed Php 9 million from Pedro, Juan and Pablo. They agreed that the obligation is solidary. Later, Juan was so smitten by Juana that he, in a moment of unconditional love, wrote her a letter saying that she no longer have to pay her share. Juan did it without informing Pedro and Pablo. Suppose that Pedro and Pablo were able to collect Php 3 million from Maria but got nothing from Rosa and Juana. Which of the following best describes the relationship between solidary debtors?

A)Since Maria paid Php 3 million, she is entitled to get reimbursement of Php 1 million from Juana and another Php 1 million from Rosa
B) The payment of Php 3 million by Maria will be shouldered by her alone since Juana benefitted from remission and Rosa was a minor.
C) Juana was not a minor and should be equally liable with Maria and, therefore, she should share the burden of Maria by reimbursing her Php 1.5 million.
D) Rosa was not the one intended by the remission and should be equally liable with Maria and, therefore, she should share the burden of Maria by reimbursing her Php 1.5 million.

Answer 98

B) The payment of Php 3 million by Maria will be shouldered by her alone since Juana benefitted from remission and Rosa was a minor.

Question 99

Which of the following is true?

A) Indivisibility of prestation makes the obligation solidary.
B) Divisibility of prestation makes the obligation joint.
C) Indivisibility does not necessarily mean solidarity.
D) None of the above.

Answer 99

C) Indivisibility does not necessarily mean solidarity.

Question 100

Which of the following is true?

A) Non-delivery of a joint indivisible obligation makes the guilty debtor liable for the entire prestation.
B) Non-delivery of a joint indivisible obligation makes any debtor liable for the entire prestation but innocent debtor may ask for reimbursement from the guilty debtor
C) Non-delivery of a joint indivisible obligation makes all the debtors liable for damages but innocent debtors are liable only up to their shares.
D) None of the above.

Answer 100

C) Non-delivery of a joint indivisible obligation makes all the debtors liable for damages but innocent debtors are liable only up to their shares.

Question 101

Which of the following is true?

A) Extinguishment of principal obligation results to extinguishment of penal clause.
B) Extinguishment of penal clause results to extinguishment of principal obligation.
C) Extinguishment of principal obligation does not necessarily mean extinguishment of penal clause.
D) None of the above.

Answer 101

A) Extinguishment of principal obligation results to extinguishment of penal clause.

Question 102

Which of the following is the best statement

A) Subsidiary penalty can be demanded together with the principal obligation, while complementary penalty can be demanded in lieu of the principal obligation.
B) Subsidiary penalty must be clearly intended while complementary penalty is presumed.
C) Complementary penalty can be demanded together with the principal obligation, while subsidiary penalty can be demanded in lieu of the principal obligation.
D) Complementary penalty must be clearly intended while subsidiary penalty is presumed.
E) A and B are true.
F) C and D are true.

Answer 102

F) C and D are true.

Question 103

Cardcorporation issued a credit card to Mr. Holder under a contract that states: “All charges made through the use of the card shall be paid by the holder within 20 days from receipt of statement of account otherwise the holder shall pay, in addition to the unpaid principal, interest at the rate of 3 % per month and a penalty of 5 % per month xxxx xxx”. Which of the following is the best statement?

A) The penal clause is compensatory because under the law penal clauses are presumed to be compensatory.
B) Cardcorporation can collect only the penalty and not the liquidated damages in the form of monthly interest.
C) The penal clause is punitive because the parties agree.
D) Cardcorporation can collect both penalty and damages.
E) A and B are true
F) C and D are true

Answer 103

F) C and D are true

Question 104

Cardcorporation issued a credit card to Mr. Holder under a contract that states: “All charges made through the use of the card shall be paid by the holder within 20 days from receipt of statement of account otherwise the holder shall pay, in addition to the unpaid principal, interest at the rate of 3 % per month and a penalty of 5 % per month xxxx xxx.” Which of the following is the best statement?

A) Cardcorporation can collect the principal and the penalty because the penal clause is complementary (not subsidiary).
B) Cardcorporation can collect the penalty and damages because the penal clause is punitive (not reparatory)
C) Cardcorporation can collect the principal, penalty and interest because the penal clause is complementary and, at the same time, punitive.
D) Cardcorporation can collect penalty in lieu of the principal because the penal clause is subsidiary (not complementary) and in lieu of damages because it is also reparatory (not punitive)

Answer 104

C) Cardcorporation can collect the principal, penalty and interest because the penal clause is complementary and, at the same time, punitive.

Question 105

Which of the following is not a cause of extinguishment of obligation?

A) Loss of a specific thing due by reason of fortuitous event.
B) Loss of a generic thing due by reason of fortuitous event.
C) Impossibility of an obligation to do by reason of fortuitous event.
D) Impossibility of an obligation not to do by reason of fortuitous event

Answer 105

B) Loss of a generic thing due by reason of fortuitous event.

Question 106

Which of the following is not a cause of extinguishment of obligation?

A) Annulment
B) Arrival of suspensive period.
C) Fulfillment of resolutory condition.
D) Compromise.

Answer 106

B) Arrival of suspensive period.

Question 107

Which of the following is not a cause of extinguishment of obligation?

A) Death of a debtor in an obligation to give a generic thing.
B) Death of a debtor in an intransmissible obligation to do.
C) Mutual withdrawal
D) Compromise

Answer 107

A) Death of a debtor in an obligation to give a generic thing.

Question 108

Mr. Obligor borrowed from Mr. Obligee Php 10 million. To secure the loan, Mr. Obligor also signed a real estate mortgage over his house. On due date, Mr. Third, without the consent of Mr. Obligor, paid the Php 10 million. However, Mr. Obligee had previously paid Php 2 milion. Which of the following is true?

A) Mr. Third has the right to demand from Mr. Obligor Php 10 million as it was the amount he shelled to Mr. Obligee
B) Mr. Third can foreclose the mortgaged house of Mr. Obligor if the latter refuses to pay.
C) Mr. Third can ask Mr. Obligee the refund of Php 10 million as his decision to pay Mr. Oblior’s debt was a bad mistake of his life.
D) Mr. Third can ask Mr Obligor reimbursement of only Php 8 million as this the extent of the benefit received by the latter.

Answer 108

D) Mr. Third can ask Mr Obligor reimbursement of only Php 8 million as this the extent of the benefit received by the latter.

Question 109

Mr. Conman took the laptop of Mr. Neighbor and sold it to Mr. Buyer who paid him Php 20,000 for it. Which of the following is the best statement?

A) Mr. Buyer can keep the laptop as he paid good money for it
B) Mr. Neighbor can recover the laptop as its delivery to Mr. Buyer was invalid considering that Mr. Conman had no free disposal of the thing.
C) Mr. Buyer can insist that the money be recovered first from Mr. Conman before he is going to return the laptop to Mr. Neighbor.
D) None of the above.

Answer 109

B) Mr. Neighbor can recover the laptop as its delivery to Mr. Buyer was invalid considering that Mr. Conman had no free disposal of the thing.

Question 110

To cover the monthly rent for his commercial space, Mr. Renter delivered Php 100,000 not to Mr. Owner but to the latter’s friend, Mr. Neighbor. Later, Mr. Renter was surprised that Mr. Owner issued a receipt only for Php 80 thousand. Previously Mr. Owner regularly sent his official receipts through Mr. Neighbor whom he always described as an honest and trusted assistant. Which of the following is the best statement?

A) Mr. Renter had to pay another Php 20 thousand unless he could prove that the entire Php 100 thousand redounded to the benefit of Mr. Owner.
B) Mr. Renter need not pay anymore if he could prove that he delivered Php 100 thousand to Mr. Neighbor
C) Mr. Owner can demand another Php 100 thousand if he could prove that he never authorized Mr. Neighbor to collect.
D) None of the above

Answer 110

B) Mr. Renter need not pay anymore if he could prove that he delivered Php 100 thousand to Mr. Neighbor

Question 111

Mr. Loner engaged and paid in advance Mr. Hardware to provide him with construction materials. Mr. Hardware had his house and hardware in the mainland and Mr. Loner had his construction site on a remote isle and yet they did not bother to agree as to the delivery place. Which of the following is the best statement?

A) Mr. Loner must get the construction materials from Mr. Hardware’s place in the mainland.
B) Mr. Hardware must deliver the construction materials to Mr. Loner’s isle.
C) Mr. Hardware must deliver it to the port and Mr. Loner’s must get it from there.
D) None of the above.

Answer 111

A) Mr. Loner must get the construction materials from Mr. Hardware’s place in the mainland.

Question 112

Which of the following is not true?

A)Parties may make conventional compensation on debts which are not due.
B)Parties may make conventional compensation on debts of consumables which are not of the same kind.
C)Parties may make conventional compensation of debts arising from claims of damages.
D)Parties may make conventional compensation of debts arising from commodatum.

Answer 112

D)Parties may make conventional compensation of debts arising from commodatum.

Question 113

Mr. Utang borrowed from Mr. Faybsik Php 9,000 to be paid on May 22. Mr. Trabahante, the collector of Mr. Faybsik, borrowed from Mr. Utang Php 5,000 to be paid on May 30. Which of the following is the best statement?

A)Mr. Utang will hand, on May 22, Php 5,000 to Mr. Trabahante to be delivered to Mr. Faybsik on the same day
.B)Mr. Trabahante will receive, on May 22, Php 5,000 from Mr. Utang and then deliver Php 9,000 to Mr. Faybsik on May 30.
C)Mr. Faybsik will collect from Mr. Utang Php 5,000 on May 22 and then deduct Php 4,000 from the salary of Mr. Trabahante on May 30.
D)Mr. Faybsik will collect Php 9,000 from Mr. Utang on May 22.

Answer 113

D)Mr. Faybsik will collect Php 9,000 from Mr. Utang on May 22.

Question 114

To meet a client’s need, XHardware bought on credit 200 sacks of cement worth Php 60,000 from AHardware. To beef its stock, AHardware bought on credit 100 gallons of paint worth Php 75,000 from XHardware. Now the two debts are due. Which of the following is the best statement?

A) There is compensation despite the fact that the debt of XHardware arises from his purchase of sacks of cement while the debt of AHardware arises from purchase of gallons of paint

B)There is compensation because it can be presumed that is the intention of the parties.
C)There is no compensation because the two debts are not of the same amount.
D)There is no compensation because the two products bought on credit are not of the same kind and quality.

Answer 114

A) There is compensation despite the fact that the debt of XHardware arises from his purchase of sacks of cement while the debt of AHardware arises from purchase of gallons of paint

Question 115

XHardware borrowed from AHardware 200 sacks of cement worth Php 60,000 payable by an equal number of sacks of cement, and the latter borrowed from the former 100 gallons of paint worth Php 75,000 payable by an equal number of gallons of paint. Which of the following is the best statement?

A)AHardware will just pay Php 15,000 which is the difference between his debt of Php 75,000 and his credit of Php 60,000.
B)AHardware can insist on compensation because the products are both consumables.
C)There is no legal compensation because the products are not of the same kind and quality.
D)There is no legal compensation because the products are not of the same kind and quality but parties may agree on conventional compensation.

Answer 115

D)There is no legal compensation because the products are not of the same kind and quality but parties may agree on conventional compensation.

Question 116

Which of the following is not true?

A)The guarantor may set-off the credit of the principal debtor against the credit of the principal creditor.
B)The principal debtor may set-off his credit against the credit of the principal creditor.
C)The principal creditor may set-off his credit against the credit of the guarantor once the principal debtor has become insolvent
D)The principal creditor may set-off his credit against the credit of the guarantor.

Answer 116

D)The principal creditor may set-off his credit against the credit of the guarantor.

Question 117

Mr. Pre sold on credit merchandise worth Php 3 million to Junjun. Senyor made a guarantee that he would be the one to pay if Junjun cannot pay. Mr. Pre agreed to the sale on credit because he is also indebted to pay Php 1 million to Junjun and Php 2 million to Senyor by reason of previous transactions and he knows also that Junjun is very solvent. Which of the following is the best statement?

A)Mr. Pre can set-off his Php 3 million against the combined Php 1 million credit of Junjun and Php 2 million credit of Senyor.
B)Mr. Pre can set-off his Php 3 million credit against the Php 2 million credit of Mr. Senyor
C)Senyor can set-off the Php 1 million credit of Junjun against the Php 3 million credit of Mr. Pre.
D)Senyor can set-off his Php 2 million credit against the Php 3 million credit of Mr. Pre.

Answer 117

C)Senyor can set-off the Php 1 million credit of Junjun against the Php 3 million credit of Mr. Pre.

Question 118

Which of the following is not true about judicial compensation?

A)The party claiming compensation must prove in court his right to be awarded damages
B)The party claiming compensation must prove in court the amount of damages due him.
C)The court cannot order judicial compensation if one debt consists of liquidated account and the other a claim for damages.
D)Legal compensation is not judicial compensation.

Answer 118

C)The court cannot order judicial compensation if one debt consists of liquidated account and the other a claim for damages.

Question 119

Which of the following is not true?

A)Valid debt can be a subject of legal compensation.
B)Void debt can be a subject of legal compensation before it is declared void.
C)Rescissible debt can be a subject of compensation before it is rescinded.
D)Voidable debt can be a subject of compensation before it is avoided.

Answer 119

B)Void debt can be a subject of legal compensation before it is declared void.

Question 120

Which of the following is not true?

A)The debtor who has consented to the assignment of rights cannot set up against the assignee the compensation which would pertain to him against the assignor
B)The debtor who has reserved his right to compensation, cannot set up against the assignee the compensation which would pertain to him against the assignor
C)The debtor who has not consented to the assignment of rights may set up the compensation of debts previous to the assignment but not of subsequent ones.
D)The debtor who is not aware of the assignment of rights may set up the compensation of debts until he becomes aware of the assignment.

Answer 120

B)The debtor who has reserved his right to compensation, cannot set up against the assignee the compensation which would pertain to him against the assignor

Question 121

On Jan 1, Mr. Landlord rented out his building to XFinance for a monthly rent of Php 50,000 per month payable every 1st day of the month. On the same month, Mr. Landlord borrowed from XFinance Php 600,000 to be paid at Php 50,000 per month payable every 15th day of the month. On May 4, XFinance assigned its rights to collect credits to XCollect. Mr. Landlord consented to the assignment but made no reservation. Which of the following is not correct?

A)The monthly rentals and monthly loan installments for the months of January, February, March and April shall be compensated against each other.
B)If Mr. Landlord consented to the assignment, he can set-off his May 1 rental collectible against his May 15 loan installment payable.
C)If Mr. Landlord consented to the assignment, he cannot set-off his May 1 rental collectible against his May 15 loan installment payable.
D)If Mr. Landlord is not aware about the assignment, he can set-off all his collectibe rentals against his loan installment payables until he is notified about the assignment.

Answer 121

B)If Mr. Landlord consented to the assignment, he can set-off his May 1 rental collectible against his May 15 loan installment payable.

Question 122

Davao Hardware ordered 1000 sacks of cement from Panabo Hardware to be delivered to a remote construction site in Panabo City which delivery may cost Panabo Hardware Php 3,000. On the other hand, Panabo Hardware also ordered 1000 sacks of cement, of the same brand and variant, from Davao Hardware to be delivered to a client based in downtown Davao City, which delivery may cost Davao Hardware Php 1,000. Which of the following is not true?

A)There is compensation because the two debts are consumables of the same kind and quality.
B)There is total compensation of the principal obligations because the quantities of the two debts are the same.
C)The parties no longer have obligation to each other as the two principal obligations are totally extinguished.
D)The compensation takes effect by operation of law.

Answer 122

C)The parties no longer have obligation to each other as the two principal obligations are totally extinguished.

Question 123

Mr. Creditor lent to his friend, Mr. Debtor, the following: (1) Php 3 millions, with 2 % interest per month, payable on August 30; (2) Php 1 million, with 2 % interest per month payable on Sept. 30; (3) Php 1 million, with 2 % interest per month payable on Oct. 30; (4) Php 1 million, with 2 % interest per month payable on Dec. 30, secured with a mortgage over the house of Mr. Debtor; (5) 500 sacks of rice worth Php 1 million to be paid with 500 sacks of rice of same quality on Nov30 with a penalty of additional 12 sacks of rice for every month of delay. On December 1, the previous Php 2 million loan of Mr. Creditor payable to Mr. Debtor has matured. How should it be applied or compensated?

A)It will be applied or compensated to the Php 3 million debt, being the one that first became due.
B)It will be applied or compensated to the Php 1 million debt with mortgage, being the most onerous obligation.
C)It will be applied or compensated according to the stipulation of parties, if there is any.
D)It will be applied or compensated according to the choice of the debtor.

Answer 123

C)It will be applied or compensated according to the stipulation of parties, if there is any.

Question 124

14)Mr. Creditor lent to his friend, Mr. Debtor, the following: (1) Php 3 millions, with 2 % interest per month, payable on August 30; (2) Php 1 million, with 2 % interest per month payable on Sept. 30; (3) Php 1 million, with 2 % interest per month payable on Oct. 30; (4) Php 1 million, with 2 % interest per month payable on Dec. 30, secured with a mortgage over the house of Mr. Debtor; (5) 500 sacks of rice worth Php 1 million to be paid with 500 sacks of rice of same quality on Nov30 with a penalty of additional 12 sacks of rice for every month of delay. On December 1, the previous Php 2 million loan of Mr. Creditor payable to Mr. Debtor has matured. Suppose there is no stipulation as to how a concurrent credit be compensated against several debts. Which of the following is the best answer?

A) Mr. Debtor may demand that his Php 2 million credit be compensated against his Php 3 million debt, being the first one to became due.
B) Mr. Debtor may demand that his Php 2 million credit be compensated against his Php 1 million debt with mortgage, being the most onerous
C) Mr. Debtor may demand that his Php 2 million credit be compensates against his Php 1 million payable in 500 sacks of rice, being the most cumbersome.
D) Mr. Debtor may demand that his Php 2 million credit be compensated against his Php 1 million debt payable on Sept 30

Answer 124

D) Mr. Debtor may demand that his Php 2 million credit be compensated against his Php 1 million debt payable on Sept 30

Question 125

If all the requisites listed in Article 1279 are present, when shall legal compensation take effect?

A)The moment the two debts mature.
B)The moment the two parties agree to compensation.
C)The moment the two parties become aware of the concurrence of the debts.
D)The moment one party claims compensation against the other party.

Answer 125

A)The moment the two debts mature.

Question 126

Which of the following is not a novation?

A)Changing their object or principal conditions
B)Substituting the person of the debtor
C)Subrogating a third person in the rights of the creditor
D)Restructuring schedule of payments

Answer 126

D)Restructuring schedule of payments

Question 127

Which of the following is not true about novation?

A)Extinguishment of the old obligation must be declared.
B)The old and the new obligations must be incompatible with each other.
C)Novation is not presumed.
D)Novation takes effect by operation of law

Answer 127

D)Novation takes effect by operation of law

Question 128

Which of the following is not true?

A)In delegacion, third person becomes the new debtor upon agreement of the third person, original creditor and original debtor; while in expromision, third person becomes the new debtor upon agreement of the third person and original creditor, without the consent of the original debtor.
B)In delegacion, payment by third person gives him the right to full reimbursement and the right of subrogation; while in expromission, payment by third person gives him right to beneficial reimbursement only.
C)In delegacion, if third person becomes insolvent, creditor can no longer collect from the original debtor unless the insolvency is known to the latter; while in expromision, creditor can no longer collect from the debtor.
D)In delegacion, original debtor becomes the guarantor of the third person; while in expromision, the debtor has no such liability.

Answer 128

D)In delegacion, original debtor becomes the guarantor of the third person; while in expromision, the debtor has no such liability.

Question 129

Which of the following is not true

A)If the old obligation is void, the new obligation is also void.
B)If the new obligation is void, the old obligation is also void.
C)If the new obligation is void, the old obligation remains.
D)If the old obligation is valid it does not mean necessarily mean that the new obligation is valid.

Answer 129

B)If the new obligation is void, the old obligation is also void.

Question 130

Mr. Dee borrowed from Mr. Orig Php 3 million, with a penalty of 20 % interest per annum if unpaid. To secure payment thereof, he signed a mortgage over his house worth Php 5 million. His friend, Mr. Gee, also made a guaranty that if Mr. Dee could not pay, he would be the one to pay the Php 3 million. Later, Mr. Dee borrowed from Mr. Mortgee Php 1 million and signed a mortgage over the same house. Mr. Mortgee, sensing that Mr. Dee was about to get bankrupt and knowing that the value of the property mortgaged could still cover the two debts combined, paid Mr. Orig Php 3 million after getting the consent of Mr. Dee. Which of the following is not true?

A)The preferred mortgagee is Mr. Orig and the less preferred mortgagee is Mr. Mortgee.
B) Mr. Mortgee is now the creditor of Mr. Dee of the Php 3 million credit he got from Mr. Orig on top of his own Php 1 million credit
C)Mr. Mortgee will get the right of beneficial reimbursement.
D)Mr. Mortgee will get subrogation and therefore can foreclose the mortgage of Mr. Dee in favor of Mr. Orig, can collect penalty and can collect from guarantor Mr. Gee if Mr. Dee becomes insolvent,

Answer 130

C)Mr. Mortgee will get the right of beneficial reimbursement.

Question 131

Mr. Dee borrowed from Mr. Orig Php 3 million, with a penalty of 20 % interest per annum if unpaid. To secure payment thereof, he signed a mortgage over his house worth Php 5 million. His friend, Mr. Gee, also made a guaranty that if Mr. Dee could not pay, he would be the one to pay the Php 3 million. Later, Mr. Dee borrowed from Mr. Mortgee Php 1 million and signed a mortgage over the same house. Mr. Mortgee, sensing that Mr. Dee was about to get bankrupt and knowing that the value of the property mortgaged could still cover the two debts combined, paid Mr. Orig Php 3 million without informing Mr. Dee. Which of the following is not true?

A)The preferred mortgagee is Mr. Orig and the less preferred mortgagee is Mr. Mortgee.
B) Mr. Mortgee is now the creditor of Mr. Dee of the Php 3 million credit he got from Mr. Orig on top of his own Php 1 million credit
C)Mr. Mortgee will get the right of beneficial reimbursement.
D)Mr. Mortgee will get subrogation and therefore can foreclose the mortgage of Mr. Dee in favor of Mr. Orig, can collect penalty and can collect from guarantor Mr. Gee if Mr. Dee becomes insolvent,

Answer 131

C)Mr. Mortgee will get the right of beneficial reimbursement.

Question 132

Mr. Dee borrowed from Mr. Orig Php 3 million, with a penalty of 20 % interest per annum if unpaid. To secure payment thereof, he signed a mortgage over his house worth Php 5 million. His friend, Mr. Gee, also made a guaranty that if Mr. Dee could not pay, he would be the one to pay the Php 3 million. Later, Mr. Dee borrowed from Mr. Mortgee Php 1 million and signed a mortgage over the same house. Mr. Gee, sensing that Mr. Dee was about to get bankrupt and knowing that the value of the property mortgaged could still cover the two debts combined, paid Php 3 million to Mr. Orig after getting the consent of Mr. Dee. Which of the following is not true?

A)Mr. Gee, the guarantor, is a person interested in the fulfillment of the obligation.
B) Mr. Gee is now the creditor of Mr. Dee of the Php 3 million credit he got from Mr. Orig.
C)Mr. Gee will get the right of beneficial reimbursement.
D)Mr. Gee will get subrogation and therefore can foreclose the mortgage signed by Mr. Dee in favor of Mr. Orig and can collect penalty

Answer 132

C)Mr. Gee will get the right of beneficial reimbursement.

Question 133

Mr. Dee borrowed from Mr. Orig Php 3 million, with a penalty of 20 % interest per annum if unpaid. To secure payment thereof, he signed a mortgage over his house worth Php 5 million. His friend, Mr. Gee, also made a guaranty that if Mr. Dee could not pay, he would be the one to pay the Php 3 million. Later, Mr. Dee borrowed from Mr. Mortgee Php 1 million and signed a mortgage over the same house. Mr. Gee, sensing that Mr. Dee was about to get bankrupt and knowing that the value of the property mortgaged could still cover the two debts combined, paid Mr. Orig Php 3 million without informing Mr. Dee. Which of the following is not true?

A)Mr. Gee, the guarantor, is a person interested in the fulfillment of the obligation.
B) Mr. Gee is now the creditor of Mr. Dee of the Php 3 million credit he got from Mr. Orig.
C) Mr. Gee will get the right of beneficial reimbursement.
D) Mr. Gee will get subrogation and therefore can foreclose the mortgage signed by Mr. Dee in favor of Mr. Orig and can collect penalty

Answer 133

C) Mr. Gee will get the right of beneficial reimbursement.

Question 134

Which of the following is not a principle of contract?

A) Obligatory force
B) Autonomy
C) Natural obligation
D) Mutuality
E) Relativity
F) Consensuality

Answer 134

C) Natural obligation

Question 135

Which of the following is not true?

A) A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service
B) A contract exists when there is consent between the parties as to the object of the contract and the cause thereof
C) A contract is a creation of the state.
D) A contract is the law between parties
E) None of the above
F) All of the above

Answer 135

C) A contract is a creation of the state.

Question 136

Which of the following is not true?

A) Obligations arising from contracts have the force of law between the contracting parties
B) Contracts should be complied with in good faith
C) Those who are guilty of fraud, negligence, delay or breach in the performance of contract are liable for damages.
D) Contracts are obligatory as long as the law assigns a name on it

Answer 136

D) Contracts are obligatory as long as the law assigns a name on it.

Question 137

Which of the following is not true about contract?

A) It must not be contrary to law.
B) It must not be contrary to morals.
C) It must not be contrary to good customs.
D) It must not be contrary to public clamor.
E) It must not be contrary to public order.
F) It must not be contrary to public policy

Answer 137

D) It must not be contrary to public clamor.

Question 138

Which of the following is not true?

A) A contract binds both parties.
B) Validity and compliance of contract cannot be left to only one party.
C) Determination of performance cannot be left to a third person.
D) All of the above.
E) None of the above.

Answer 138

C) Determination of performance cannot be left to a third person.

Question 139

Transmissibility of rights means that as a rule, contractual rights take effect on the parties, their assigns and heirs but there are exceptions. Which of the following is not an exception.

A) When rights and obligations are not transmissible by stipulation;
B) When rights and obligations are not transmissible by their nature;
C) When rights and obligations are not transmissible by law
D) When the obligation of decedent exceeds the value of the estate he passed on to his heir
E) All of the above
F) None of the above.

Answer 139

F) None of the above.

Question 140

Relativity of contracts means that contracts take effect only between the parties, their assigns and heirs and do not affect third persons but there are exceptions. Which of the following is not an exception?

A) Contracts with a stipulation pour autrui
B) Contracts creating real rights
C) In contracts entered into to defraud creditors
D) In breach of contract that is induced by a third person
E) All of the above
F) None of the above.

Answer 140

F) None of the above.

Question 141

Mr. O leased his land to Mr. B for a fixed period. In accordance with the terms of the lease, Mr. B built a commercial building which he sublet to building occupants. When Mr. O died, his heirs sold the land and the building thereon to Mr. T prior to the expiration of the lease period. Which of the following is true?

A) The heirs of Mr. O are liable for damages to Mr. B for breach of contract.
B) The estate of Mr. O is liable for damages to Mr. B for breach of contract
C) Mr. T is liable for damages to Mr. B for breach of contract.
D) All of the above
E) None of the above.

Answer 141

A) The heirs of Mr. O are liable for damages to Mr. B for breach of contract.

Question 142

Mr. O leased his land to Mr. B for a fixed period. In accordance with the terms of the lease, Mr. B built a commercial building which he sublet to building occupants. When Mr. O died, his heirs induced Mr. T to buy the land. Which of the following is true?

A) Mr. T is liable for damages to Mr. B for breach of contract.
B) Mr. T is liable for damages to Mr. B for tortious interference.
C) Mr. T is not liable to pay damages
D) All of the above
E) None of the above.

Answer 142

C) Mr. T is not liable to pay damages

Question 143

Which of the following is not true about consensual contracts?

A) Consensual contracts are perfected by mere consent.
B) Mere consent in consensual contract does not give the obligee a real right over the object of the contract.
C) Mere consent in consensual contract gives the obligee an enforceable personal right against the obligor
D) Prior to delivery, his is just a personal right that he can invoke only against the other contracting party but after delivery, his right will ripen into a real right that can be invoked even against innocent third persons

Answer 143

B) Mere consent in consensual contract does not give the obligee a real right over the object of the contract.

Question 144

Which of the following is perfected upon meeting of the minds?

A) Consensual contract.
B) Real contract.
C) Solemn contract.
D) Formal contract.
E) All of the above.
F) None of the above.

Answer 144

A) Consensual contract.

Question 145

Mr. D telephoned Mr. C to borrow Php 1 million to be paid at the end of the year to which the latter agreed and wire-transferred the money to Mr. D’s account. Later Mr. D offered to pledge his car which he promised to deliver at the end of the week. Mr. D unfortunately, failed to deliver the car. Which of the following is true?

A) Mr. D is liable to pay the Php 1 million which was delivered to him.
B) Mr. D is liable to pay Php 1 million even if it was not delivered to him.
C) Mr. D is liable to deliver the car as pledge.
D) None of the above.

Answer 145

A) Mr. D is liable to pay the Php 1 million which was delivered to him.

Question 146

Mr. Mainman signed a document authorizing Mr. Pointman to sell his land for Php 5 million. Mr. Pointman sold the land for Php 5 million. Which of the following is the best statement?

A) Mr. Mainman is not liable to surrender the land to the buyer because he was not the one who personally transacted with him.
B) Mr. Mainman is not liable to surrender the land to the buyer because he has not received the money.
C) A and B are true
D) A and B are false

Answer 146

D) A and B are false

Question 147

Mr. Mainman signed a document authorizing Mr. Pointman to sell his land for Php 5 million. Mr. Pointman did not sell the land but merely mortaged it for Php 15 million. Which of the following is true?

A) Mr. Mainman is liable to pay the loan
B) Mr. Pointman, and not Mr Mainman, is the one liable to the creditor.
C) Mr. Pointman and Mr. Mainman are liable solidarily to the creditor.
D) None of the above

Answer 147

B) Mr. Pointman, and not Mr Mainman, is the one liable to the creditor.

Question 148

Which of the following is true?

A) There must be meeting of the offer certain and absolute acceptance during the preparation stage of the contract;
B) There must be meeting of the offer certain and absolute acceptance during the perfection stage of the contract
C) There must be meeting of the offer certain and absolute acceptance during the documentation stage of the contract;
D) There must be meeting of the offer certain and absolute acceptance during the consummation stage of the contract;

Answer 148

B) There must be meeting of the offer certain and absolute acceptance during the perfection stage of the contract;

Question 149

Mr. Owner offered to lease to Mr. Homeseeker his wooden house for Php 10,000 monthly rent. Mr. Homeseeker replied that he wanted to lease not the wooden house but the concrete house of Mr. Owner for the same rate. Mr. Owner replied that he could rent out the concrete house to Mr. Homeseeker for Php 12,000 monthly payment rental. Mr. Homeseeker replied that he would rent the concrete house for Php 12,000 a month rental payable quarterly. Which of the following is their contract?

A) Rent of wooden house for Php 10,000 monthly rental payment.
B) Rent of concrete house for Php 12,000 monthly rental payment.
C) Rent of concrete house for Php 36,000 quarterly rental payment.
D) None of the above.
E) All of the above.

Answer 149

D) None of the above.

Question 150

Mr. Owner said he wants to lease his condo unit for Php 300 thousand for 10 months. Mr. Thinker said he will think it over. Mr. Owner said that for Php 10 thousand, he will not offer the property to any other person for a period of 10 days. Mr. Thinker did not pay the Php 10 thousand. On the 11th day, before Mr. Owner could send another communication to Mr. Thinker, the latter sent a note that he is going to lease the property for 10 months for Php 300 thousand. Which of the following is true?

A) There is no lease because the 10 day period lapsed.
B) There is no lease because Mr. Thinker did not pay for reservation.
C) There is lease because Mr. Thinker agreed to the object and cause of contract.
D) There is no lease because Mr. Owner has not communicated to Mr. Thinker after the latter refused to pay reservation.

Answer 150

C) There is lease because Mr. Thinker agreed to the object and cause of contract.

Question 151

Which of the following is an offer?

A) Advertisement: “Lot for sale. For inquiries call (082)291XXXX”
B) Advertisement: “For sale: 200-square-meter lot situated in corner 1st street and X street, Barangay Y, Present City. For inquiries call (082)291XXXX”
C) Advertisement: “For sale: 200-square-meter lot situated in corner 1st street and X street, Barangay Y, Present City for Php 1 million. Cash only. To accept call (082)291XXXX”
D) Advertisement: “Invitation for bidders: 200-square-meter for sale situated in corner 1st street and X street, Barangay Y, Present City. To bid, call (082)291XXXX”
E) All of the above
F) None of the above

Answer 151

C) Advertisement: “For sale: 200-square-meter lot situated in corner 1st street and X street, Barangay Y, Present City for Php 1 million. Cash only. To accept call (082)291XXXX”

Question 152

Who among the following can give consent?

A) Minor
B) Insane during lucid interval
C) Drunk man
D) Hypnotized man
E) Deaf-mutes who do not know how to write
F) All of the above
G) None of the above

Answer 152

B) Insane during lucid interval

Question 153

Senyor sold a lot to Juan who paid for the same on installments which were all received on behalf of Senyor by the latter’s son. When Senyor died, his children said that the sale was null and void because at that time of the transaction, Senyor was already afflicted with senile dementia. Which of the following is the best statement?

A) The sale was null and void because there was no consent.
B) The sale was voidable because the consent was defective
C) The sale was ratified because the price installments were received.
D) All of the above
E) None of the above

Answer 153

C) The sale was ratified because the price installments were received.

Question 154

Mr. Ex contracted with Eynginer Juan for the building of his house. Which of the following mistakes does not vitiate consent?

A) That the name of the builder was mispelled as Eynginer Juan
B) That Eynginer Juan erroneously thought the the land is not owned by Mr. Ex
C) That Mr. Ex erroneously thought that the construction cost is Php 1 million instead of Php 10 million
D) That there was an error as to builder’s qualification because “Eynginer” is just a first name and not a title of profession
E) All of the above
F) None of the above

Answer 154

A) That the name of the builder was mispelled as Eynginer Juan

Question 155

Mr. Muscle, a friend of Mr. Boss, threatened Mr. Good that if the latter would not transfer his land to answer for Mr. Good’s wife previous embezzlement of Mr. Boss’ money, Mr. Boss would file a criminal case against the wife. Which of the following is the best statement?

A) The threat by Mr. Muscle does not make the contract voidable because he is just a third party
B) The threat by Mr. Muscle does not make the contract voidable because the threat was not directed against Mr. Good himself but only against his spouse
C) The threat by Mr. Muscle does not make the contract voidable because it is just a threat and not violence.
D) The threat by Mr. Muscle does not make the contract voidable because it is just a threat to enforce one’s claim.

Answer 155

D) The threat by Mr. Muscle does not make the contract voidable because it is just a threat to enforce one’s claim.

Question 156

Which of the following is a requisite of causal fraud?

A) It must have been employed by one contracting party upon the other
B) It must have induced the other party to enter into the contract.
C) It must have been serious
D) It must have resulted in damage and injury to the party seeking annulment
E) All of the above
F) None of the above.

Answer 156

E) All of the above

Question 157

Which of the following does not vitiate consent (does not make the contract voidable)?

A) Misrepresentation by third person misleading both parties
B) Misrepresentation in good faith by party
C) Incidental fraud
D) Erroneous expert opinion relied upon by party.

Answer 157

C) Incidental fraud

Question 158

A single father wants to give his entire farm to his only child but does not want to offend the feelings of his current girlfriend whom might get jealous of the affection he is giving to his child. So, he signs a deed of sale to make it appear that his child is paying for it. Which of the following is true?

A) The contract is sale as it is the one appearing in the deed.
B) The contract is null and void because there was no sale.
C) The contract is a donation.
D) The contract is an absolute simulation.

Answer 158

C) The contract is a donation.

Question 159

A father is giving his house to his only child but instead of signing a deed of donation, he signs a deed of sale supposedly for Php 1 million, in favor of the child who has no means of paying the said amount. Which of the following is true?

The contract is invalid because there is no cause as there is no payment.
The contract is invalid because the cause stated is false as the actual contract is not sale.
The contract is valid because there is another cause which is liberality of the giver.
The contract is valid because failure of the cause does not make the contract invalid.

Answer 159

The contract is valid because there is another cause which is liberality of the giver.

Question 160

Which of the following is not a requisite of cause?

existing
lawful
true
declared

Answer 160

declared

Question 161

X and Y orally agreed on a sale over the land of the former for the price of Php 1 million. Which of the following is not true?

There is no contract of sale of land because it is not in writing.
X cannot enforce in court the payment of Php 1 million from Y.
Y cannot enforce in court the delivery of the land from X.
The contract is defective but can be ratified.

Answer 161

There is no contract of sale of land because it is not in writing.

Question 162

Ireneo and his wife Salvacion, signed a deed of sale over Ireneo’s lot in favor of their niece for the purpose of allowing the niece to use the land as collateral in securing a loan. No amount was paid. What is the situation here?

Illegality of the cause
Absence of cause
Falsity of the cause
Failure of the cause
Inadequacy of the cause

Answer 162

Absence of cause

Question 163

For Php 50,000, Pedro sells to Juan all the rice that can be harvested in his 2-hectare farm for the year 20XX. Which of the following is the best statement?

There is contract because the kind of the object is determinate.
There is contract because the quantity of the object is determinable
There is no contract because the kind of the object is not determinate.
There is no contract because the quantity of the object is only determinable.
A and B are true.
C and D are true.

Answer 163

A and B are true.

Question 164

X and Y orally agreed on a sale over the land of the former for the price of Php 1 million. Which of the following is not true?

The contract is unenforceable but can be ratified by failure to object to the presentation of oral evidence.
The contract is unenforceable but can be ratified by X accepting the payment or part thereof.
The contract is unenforceable but can be ratified by Y occupying the land.
None of the above

Answer 164

None of the above

Question 165

Which of the following is not true?

Lesion or inadequacy of cause shall not invalidate a contract.
If inadequacy of cause is accompanied with fraud, mistake or undue influence, the contract is voidable.
If the contract is entered into by a guardian and his ward suffers lesion by more than 1/4 of the value of the thing, the contract is rescissible.
If the contract is entered into by a representative and the absentee he represents suffers lesion by more than 1/4 of the value of the thing, the contract is rescissible.
All of the above
None of the above

Answer 165

None of the above

Question 166

Ina had a parcel of land and six children: Uno, Dos, Tres, Quatro, Singko and Sais. While Ina was still alive, Quatro, Singko and Sais sold their respective 1/6 undivided shares over the land to Tres, making the latter the owner of a total 4/6 shares over the land. Ina conformed to the sales. Which of the following is true?

The sales are valid because future inheritance can be object of contract.
The sales are not valid because future inheritance cannot be object of contract.
The transactions are valid as they are acts of partition by a parent of her own property
The transactions are not valid because a parent can transfer her property only after her death.

Answer 166

The transactions are valid as they are acts of partition by a parent of her own property

Question 167

Which of the following is true?

If the contract is not valid because it is not in writing, a party may compel the other party to follow the required form of contract.
If the contract is not enforceable because it is not in writing, a party may compel the other party to follow the required form of contract.
If the contract is not convenient for the party because it is not in writing, he may compel the other party to follow the required form of contract.
None of the above.

Answer 167

If the contract is not convenient for the party because it is not in writing, he may compel the other party to follow the required form of contract.

Question 168

Which of the following is the best statement?

The general rule is that contract is consensual.
The general rule is that contract is solemn.
The general rule is that contract is informal.
The general rule is that contract is formal.
A and C are true
B and D are true

Answer 168

A and C are true

Question 169

Ireneo and his wife Salvacion, signed a deed of sale over Ireneo’s lot in favor of their niece for the purpose of allowing the niece to use the land as collateral in securing a loan. No amount was paid. What is the situation here? Which of the following is true?

The contract is void because there is failure in the cause
The contract is void because the cause is false
The contract is void because there is no cause.
All of the above.
None of the above.

Answer 169

The contract is void because there is no cause.

Question 170

Which of the following is true?

Non-declaration of the cause makes the contract void.
Inadequacy of the cause makes the contract void.
Absence of cause makes the contract void.
Failure of the cause makes the contract void.

Answer 170

Absence of cause makes the contract void.

Question 171

Which of the following does not make the contract invalid?

absence of cause.
illegality of cause.
falsity of cause.
failure to state cause.

Answer 171

failure to state cause.

Question 172

An alumnus and his alma mater sign a donation whereby the former donates a piece of land to the latter, with a condition that a building bearing his name be erected therein within 1 year. Which of the following is not true?

The cause of the alma mater is the delivery of the land.
The cause of the alumnus is pure liberality.
The cause of the alumnus is the construction of a building bearing his name.
All of the above
None of the above

Answer 172

The cause of the alumnus is pure liberality.

Question 173

Which of the following is not true?

Contracts listed in the Statute of Frauds must be in writing.
Contracts listed in the Statute of Frauds which is not in writing is valid.
Contracts listed in the Statute of Frauds which is not in writing is unenforceable.
Contracts listed in the Statute of Frauds must be in writing to be valid.

Answer 173

Contracts listed in the Statute of Frauds must be in writing to be valid.

Question 174

Which of the following does not require form for demandability?

An agreement not to be performed within 1 year
Lease for more than 1 year.
Sale of real property.
Loan of money of more than Php 5 thousand.

Answer 174

Loan of money of more than Php 5 thousand.

Question 175

Mr. Angry wants to smash the window of his neighbor and he buys a hammer for that purpose from XHardware which, upon sale, issues a receipt showing the amount received but not the item bought. Which of the following is not true?

The delivery of the hammer is a valid cause for Mr. Angry.
The payment of the price is a valid cause for XHardware
The non-declaration of the thing bought does not make the contract invalid
The motive of smashing the neighbor’s window makes the contract invalid.
All of the above
None of the above.

Answer 175

The motive of smashing the neighbor’s window makes the contract invalid.

Question 176

Ina had a parcel of land and six children: Uno, Dos, Tres, Quatro, Singko and Sais. While Ina was still alive, Quatro, Singko and Sais sold their respective 1/6 undivided shares over the land to Tres, making the latter the owner of a total 4/6 shares over the land. Which of the following is true?

The sales are valid because future things can be object of contract.
The sales are not valid because future things cannot be object of contract
The sales are valid because future inheritance can be object of contract.
The sales are not valid because future inheritance cannot be an object of contract.

Answer 176

The sales are not valid because future inheritance cannot be an object of contract.

Question 177

Which of the following is outside the commerce of men?

status of a person
corpse of an individual
property of public dominion
communal things
all of the above
none of the above

Answer 177

all of the above

Question 178

Which of the following is not a requisite of contract?

not outside the commerce of men
capable of existence
determinate as to its kind
not impossible
not contrary to law, morals, good customs, public order or public policy
all of the above
none of the above

Answer 178

none of the above

Question 179

Which of the following is not a cause

the promise of a thing or service by the other party
the service or benefit rewarded
pure liberality of the giver
motive of a party

Answer 179

motive of a party

Question 180

Which of the following does not require form for validity

Donation of movable property worth more than Php 5 thousand
Donation of immovable property.
Partnership involving real properties.
Loan of money

Answer 180

Loan of money

Question 181

Which of the following is not required for the demandability of the contract?

form required by law for the contract to be valid.
form required by law for the contract to be enforceable.
form required by law for the convenience of the parties.
all of the above
none of the above

Answer 181

form required by law for the convenience of the parties.

Question 182

Which of the following does not require form for validity?

Agreement as to interest.
Contract of antichresis
Authority to administer property
Inventory of real properties of partnership

Answer 182

Authority to administer property

Question 183

Which of the following cannot be considered as object of contract?

things which are not outside the commerce of men
future things
transmissible rights
future inheritance
services which are not contrary to law, morals, good customs, public order or public policy
all of the above
none of the above

Answer 183

future inheritance

Question 184

Which of the following is true?

A) In reformation, the contract is changed to conform with the law
B) In reformation, the instrument is changed to conform with the true intention of the parties.
C) In reformation, the contract is annulled because there is no meeting of the minds of the parties.
D) All of the above.
E) None of the above.

Answer 184

B) In reformation, the instrument is changed to conform with the true intention of the parties.

Question 185

Which of the following is not a ground for reformation?

A) The true intention of the parties is not expressed in the instrument because of mistake.
B) The true intention of the parties is not expressed in the instrument because of fraud.
C) The true intention of the parties is not expressed in the instrument because of inequitable conduct.
D) The true intention of the parties is not expressed in the instrument because of accident.
E) All of the above
F) None of the above

Answer 185

F) None of the above

Question 186

Which of the following is not a requisite of reformation?

A) There must have been a meeting of the minds of the parties to the contract
B) The instrument does not express the true intention of the parties.
C) The failure of the instrument to express the true intention of the parties is due to mistake, fraud, inequitable conduct or accident.
D) All of the above.
E) None of the above.

Answer 186

E) None of the above.

Question 187

Which of the following is not true?

A) Reformation is applicable when the defect is merely in the wording of the instrument, while annulment is applicable when the defect is in the consent of one of the parties.
B) Reformation is applicable when the instrument is defective but the contract itself is valid, while annulment is applicable when the contract itself is defective.
C) Reformation applies when mistake, fraud, inequitable conduct or accident has prevented a meeting of the minds of the parties, while annulment applies when mistake, fraud, inequitable conduct, or accident has prevented the expression of the parties’ true agreement in the instrument.
D) Upon reformation, the instrument will be corrected, while upon annulment, the contract will be invalidated.

Answer 187

C) Reformation applies when mistake, fraud, inequitable conduct or accident has prevented a meeting of the minds of the parties, while annulment applies when mistake, fraud, inequitable conduct, or accident has prevented the expression of the parties’ true agreement in the instrument.

Question 188

Which of the following is not true?

A) If the two parties mistakenly cause the failure of the instrument to disclose their real agreement, any of them may ask for reformation.
B) If one party is mistaken and the other party concealed the mistake, any of them may ask for reformation
C) If a third person drafting the instrument negligently made a mistake in the instrument, any of the parties may ask for reformation.
D) None of the above.
E) All of the above.

Answer 188

B) If one party is mistaken and the other party concealed the mistake, any of them may ask for reformation

Question 189

Which of the following is not true?

A) If the two parties mistakenly cause the failure of the instrument to disclose their real agreement, any of them may ask for reformation.
B) If one party is mistaken and the other party concealed the mistake, any of them may ask for reformation
C) If a third person drafting the instrument negligently made a mistake in the instrument, any of the parties may ask for reformation.
D) None of the above.
E) All of the above.

Answer 189

B) If one party is mistaken and the other party concealed the mistake, any of them may ask for reformation

Question 190

Mr. Borrower offered to mortgage to Mr. Lender his land known as Lot 1 with a nipa house to secure a loan of Php 20,000 to which the latter agreed. However, the lot erroneously typed by the clerk in the mortgage contract was Lot 2 which has a concrete house. Mr. Lender noticed the mistake but Mr. Borrower did not. Both signed. Which of the following is true?

A) Either the borrower or the lender can ask for reformation because none of them is at fault.
B) Either the borrower or the lender can ask for reformation because the clerk is not employed by any of them.
C) The lender cannot ask for reformation because he acted fraudulently.
D) The lender cannot ask for reformation because he concealed the mistake.

Answer 190

D) The lender cannot ask for reformation because he concealed the mistake.

Question 191

X signed a “transfer of rights” over his land in favor of Y for Php 20,000. After a year, X seeking to recover his land, went to Y to pay his alleged Php 20,000 ‘loan’ but the latter refused to receive the money and to return the land saying that their transaction was a sale and not a mortgage. It appears that: the consideration has been unusually inadequate; the supposed vendor has remained in possession of the property; and the supposed vendor continued to pay real estate taxes thereon. Which of the following is true?

A) X can ask for reformation because they agreed on mortgage but their instrument was about sale.
B) X can ask for reformation if he can prove that Y acted fraudulently.
C) X cannot ask for reformation because they both knew that the instrument was about sale.
D) X cannot ask for reformation because Y did not commit mistake, fraud, inequitable conduct or accident.

Answer 191

A) X can ask for reformation because they agreed on mortgage but their instrument was about sale.

Question 192

Which of the following is not true?

A) There is no reformation in onerous donations.
B) There is no reformation in wills.
C) There is no reformation when the real agreement is void.
D) There is no reformation when a party already files a case for enforcement of instrument.

Answer 192

A) There is no reformation in onerous donations.

Question 193

Testator made a last will and testament apportioning his properties to his children. Which of the following is not true?

A) During his lifetime, the children can ask for reformation to complain that the will does not express testator’s intention
B) During his lifetime, the children cannot ask for reformation
C) After his death, his children can ask for reformation to correct imperfect description
D) After his death, his children cannot ask for reformation to complain that the will does not express testator’s intention.

Answer 193

A) During his lifetime, the children can ask for reformation to complain that the will does not express testator’s intention

Question 194

Mr. Borrower offered to mortgage to Mr. Lender his land known as Lot 1 with a nipa house to secure a loan of Php 20,000 to which the latter agreed. However, the lot wrongfully stated in the instrument that the parties signed was Lot 2 which has a concrete house because Mr. Lender secretly replaced “Lot 1” in the original draft with “Lot 2” in the final draft and Mr. Borrower failed to notice it. Which of the following is not true

A) Mr. Borrower cannot ask for reformation because he was negligent.
B) Mr. Borrower can ask for reformation because he was injured.
C) Mr. Lender cannot ask for reformation because he was the guilty party
D) Mr. Lender cannot ask for reformation if he decides to right his wrong.

Answer 194

A) Mr. Borrower cannot ask for reformation because he was negligent.

Question 195

Which of the following is not true?

A) If words of the instrument are clear, they shall be interpreted according to their literal meaning.
B) In case of conflict between clear words and evident intent, the latter shall prevail.
C) In case of conflict between clear words and evident intent, the former shall prevail.
D) If intent of the parties is evident, the instrument which appear to be contrary shall be reformed.

Answer 195

C) In case of conflict between clear words and evident intent, the former shall prevail.

Question 196

Which of the following shall not be considered in determining the intent of the parties?

A) Stipulations in the contract.
B) Contemporaneous acts of the parties,
C) Subsequent acts of the parties
D) All of the above.
E) None of the above.

Answer 196

E) None of the above.

Question 197

Which of the following is true?

A) If it is impossible to settle the doubts as to the object of the contract, the contract shall be interpreted in such a way that there shall be the least transmission of rights.
B) If it is impossible to settle the doubts as to the object of the contract, the contract shall be interpreted in such a way that there shall greatest reciprocity of rights and obligations.
C) If it is impossible to settle the doubts as to the object of the contract, the contract shall be null and void.
D) All of the above.
E) None of the above.

Answer 197

C) If it is impossible to settle the doubts as to the object of the contract, the contract shall be null and void.

Question 198

X mortgaged his land in favor of the bank. The contract provides, in part: “During the existence of this mortgage, the mortgagor cannot dispose the property to another without the consent of the bank Xxx . . . . After any condition of this mortgage has been broken, all other obligations of whatever nature of the mortgagor to the mortgagee shall be considered due and payable, . .” X later sold his land. Which of the following is true?

A) The sale is null and void because the words are clear that the property cannot be disposed during the existence of the mortgage.
B) The sale is valid because the intent of the parties was to allow sale of the property during the existence of the mortgage.
C) The sale is valid because the punishment for sale of property was merely to make the obligation due and demandable.
D) All of the above.
E) None of the above.

Answer 198

C) The sale is valid because the punishment for sale of property was merely to make the obligation due and demandable.

Question 199

X corporation and Mr. Y, a paint job contractor entered a Contract of Work, prepared by the company lawyer which reads: “Y shall paint the office buildings, annexes, bunkhouses and all other buildings of company X.” Which of the following is not true?

A) The paint job covers the exteriors of the buildings.
B) The paint job covers the interiors of the buildings.
C) The paint job covers the guardhouses.
D) The paint job covers the company fence.

Answer 199

D) The paint job covers the company fence.

Question 200

Which of the following is not a defective contract?

A) Ratified contract
B) Rescissible contract
C) Voidable contract
D) Unenforceable contract
E) Void contract
F) Inexistent contract

Answer 200

A) Ratified contract

Question 201

Which of the following is not true?

A) Rescissible contract is a validly agreed contract.
B) Rescissible contract is valid until rescinded.
C) Rescissible contract has no effect for being defective.
D) Rescissible contract has consent, object and cause.

Answer 201

C) Rescissible contract has no effect for being defective.

Question 202

Which of the following cannot be rescinded?

A) Court-approved contract
B) If the aggrieved party has other legal remedies.
C) If the aggrieved party cannot return what he may be obliged to return.
D) If the object is already in the possession of a third person in good faith.
E) All of the above
F) None of the above.

Answer 202

E) All of the above

Question 203

A was sued by B and C for collection of money. D also sued A for the return of the car which the latter failed to pay. Because he had no money and he had several cases, A became insane and the court appointed A’s wife as his representative. To avoid the car being taken by the creditors, the wife sold the car to E at half the price. A later regained his sanity. Which of the following is the best statement?

A) A, B, C, D and E can ask for rescission.
B) Only B, C, D and E can ask for rescission.
C) Only A, B, C and D can ask for rescission.
D) Only A and his wife can ask for rescission.
E) All of the above.

Answer 203

C) Only A, B, C and D can ask for rescission.

Question 204

On May 22, 20XX, D only had Php 1,800,000 and he paid the following debts: Php 500,000 to A for a debt that became due as early as 12 years ago; Php 600,000 to B for a debt due on January 15, 20XX; Php 700,000 to C for a debt due on December 31, 20XX He had other debts due to several other persons but had no more to pay. Which of the following is true?

A) The payment made to A cannot be rescinded.
B) The payment made to B cannot be rescinded.
C) The payment made to C cannot be rescinded.
D) The payment made to all three can be rescinded.

Answer 204

B) The payment made to B cannot be rescinded.

Question 205

A contract knowingly entered into by the seller and buyer in order to defraud the seller’s creditors was rescinded. Which of the following is not true?

A) Seller is bound to return to buyer the price plus interest
B) Buyer is bound to return the thing plus the fruits.
C) Both of them shall pay to each other damages.
D) Both of them may be made liable to pay damages to the defrauded creditor

Answer 205

C) Both of them shall pay to each other damages.

Question 206

The guardian with a task of administering the cattle farm of a minor, after getting court approval, bought 10 cows for Php 50,000 each when the market rate was only Php 25,000 per head. Which of the following is true?

A) The minor can ask for rescission.
B) The boy, when he reaches legal age, can ask for rescission.
C) The boy, when he reaches legal age, can ask for rescission if he can return the cows.
D) The boy cannot ask for rescission.

Answer 206

D) The boy cannot ask for rescission.

Question 207

X donated all his properties to his grandchildren. Later, he contracted several debts. Which of the following is true?

A) There is a rebuttable presumption that the donations were in fraud of creditors
B) There is a conclusive presumption that the donations were in fraud of creditors.
C) There is no presumption of fraud at all.
D) Creditors can ask for rescission of the donations.

Answer 207

C) There is no presumption of fraud at all.

Question 208

In a case filed by C against D, a judgment was rendered ordering D to pay C Php 800,000. D hastily sold to T, for Php 3 million, his car worth Php 1 million and his pick-up worth Php 2 million. Which of the following is not true?

A) There will be rescission because there is a presumption that the sale is in fraud of creditors.
B) There will be rescission and T will be required to return the car and the pick-up and D will be required to return the Php 3 million.
D) There will be no rescission if D will voluntarily pay C.
E) There will be no rescission if C can find other properties to attach.

Answer 208

B) There will be rescission and T will be required to return the car and the pick-up and D will be required to return the Php 3 million.

Question 209

Who among the following cannot ask for rescission

A) The wards in contracts entered into by their guardians.
B) The absentees in contracts into by their representative.
C) The co-heirs in partitions over inheritance.
D) The creditors of one of the parties in contracts in fraud of creditors
E) All of the above.
F) None of the above

Answer 209

F) None of the above

Question 210

Who among the following cannot ask for rescission

A) The wards in contracts entered into by their guardians.
B) The absentees in contracts into by their representative.
C) The co-heirs in partitions over inheritance.
D) The creditors of one of the parties in contracts in fraud of creditors
E) All of the above.
F) None of the above

Answer 210

F) None of the above

Question 211

X signed a deed of sale in favor of his son so the latter can show to the US Embassy that he has properties in the Philippines

A) Absolutely valid
B) Rescissible
C) Voidable
D) Unenforceable
E)Void and inexistent

Answer 211

E)Void and inexistent

Question 212

A buyer, who is being sued by the seller for the recovery of an unpaid car, sold the said car to his friend

A) Absolutely valid
B) Rescissible
C) Voidable
D) Unenforceable
E) Void and inexistent

Answer 212

B) Rescissible

Question 213

Boyfriend makes an oral donation of his house to his girlfriend.

A) Absolutely valid
B) Rescissible
C) Voidable
D) Unenforceable
E) Void and inexistent

Answer 213

E) Void and inexistent

Question 214

Girlfriend makes an oral donation of her car to her boyfriend

A) Absolutely valid
B) Rescissible
C) Voidable
D) Unenforceable
E) Void and inexistent

Answer 214

E) Void and inexistent

Question 215

Minor sold his brand new laptop to his teacher.

A) Absolutely valid
B) Rescissible
C) Voidable 
D) Unenforceable
E) Void and inexistent

Answer 215

C) Voidable

Question 216

6) Teacher sold mango float to his minor students

A) Absolutely valid
B) Rescissible
C) Voidable
D) Unenforceable
E) Void and inexistent

Answer 216

A) Absolutely valid

Question 217

An insolvent man paid one of his creditors 1 year prior to due date of the loan.

A) Absolutely valid
B) Rescissible
C) Voidable
D) Unenforceable
E) Void and inexistent

Answer 217

B) Rescissible

Question 218

The guardian of a minor sold the house of the latter at twice the market price without approval of the court.

A) Absolutely valid
B) Rescissible
C) Voidable
D) Unenforceable
E) Void and inexistent

Answer 218

D) Unenforceable

Question 219

The guardian of a minor sold the house of the latter at half the market price with prior approval of the court.

A) Absolutely valid
B) Rescissible
C) Voidable
D) Unenforceable
E) Void and inexistent

Answer 219

A) Absolutely valid

Question 220

10) The guardian of a minor sold the house of the latter at market price to the judge who appointed the guardian.

A) Absolutely valid
B) Rescissible
C) Voidable
D) Unenforceable
E) Void and inexistent

Answer 220

E) Void and inexistent

Question 221

A farmer sold his farm to the creditor thinking that he was just signing a mortgage contract

A) Absolutely valid
B) Rescissible
C) Voidable
D) Unenforceable
E) Void and inexistent

Answer 221

C) Voidable

Question 222

A demented man sold his house to an insane man, on installment.

A) Absolutely valid
B) Rescissible
C) Voidable
D) Unenforceable
E) Void and inexistent

Answer 222

D) Unenforceable

Question 223

A demented man sold his house to an insane man, on installment. The guardian of the demented man accepted the 1st installment from the insane man.

A) Absolutely valid
B) Rescissible
C) Voidable
D) Unenforceable
E) Void and inexistent

Answer 223

C) Voidable

Question 224

A demented man sold his house to an insane man, on installment. The guardian of the demented man accepted the 1st installment from the insane man. The guardian of the insane man repainted the house.

A) Absolutely valid
B) Rescissible
C) Voidable
D) Unenforceable
E) Void and inexistent

Answer 224

A) Absolutely valid

Question 225

The agent sold the land of his principal who granted him authority to mortgage

A) Absolutely valid
B) Rescissible
C) Voidable
D) Unenforceable
E) Void and inexistent

Answer 225

D) Unenforceable

Question 226

The agent sold the land of his principal who granted him authority to mortgage. The principal accepted the money knowing that the same were proceeds from sale.

A) Absolutely valid
B) Rescissible
C) Voidable
D) Unenforceable
E) Void and inexistent

Answer 226

A) Absolutely valid

Question 227

The representative of an absentee sold the farm of the latter at half the market price without prior approval from the court. Which of the following is true?

A) The absentee can ask for invalidation of the contract and demand the return of his farm and the value of the crops.
B) The absentee can ask for invalidation of contract and demand the return of his farm and the value of the crops if he is willing and able to return the money of the buyer and its interest.
C) The absentee can ask for invalidation of contract and demand the return of his farm if he is willing and able to return the money of the buyer.
D) The absentee can ask for invalidation of contract but he need not return the money of the buyer because he has no fault considering that the sale was done in his absence.

Answer 227

B) The absentee can ask for invalidation of contract and demand the return of his farm and the value of the crops if he is willing and able to return the money of the buyer and its interest.

Question 228

The representative of an absentee sold the farm of the latter at half the market price without prior approval from the court. The absentee now wants to invalidate the contract. Which of the following is true?

A) His action prescribes after 4 years from the date of contract.
B) His action prescribes after 4 years from the time of his re-appearance.
C) His action prescribes after 4 years from the time of his discovery of the sale.
D) His action does not prescribe.

Answer 228

B) His action prescribes after 4 years from the time of his re-appearance.

Question 229

The minor sold his house to his neighbor after the latter made him believe that it was haunted. The neighbor later rented it out. Which of the following is true?

A) The seller, upon reaching legal age, can ask for invalidation of the contract and demand the return of the house and the rentals thereof.
B) The seller, upon reaching legal age, can ask for invalidation of the contract and demand the return of the house and the rentals thereof if he is willing and able to return the price and the interests.
C) The seller, upon reaching legal age, can ask for invalidation of the contract and demand the return of the house and the rentals thereof if he is willing to return what he has received to the extent that it benefitted him.
D) The seller, upon reaching legal age, can ask for invalidation of the contract and demand the return of the house and the rentals thereof but he is not liable to return what he received because the neighbor took advantage of his minority.

Answer 229

C) The seller, upon reaching legal age, can ask for invalidation of the contract and demand the return of the house and the rentals thereof if he is willing to return what he has received to the extent that it benefitted him.

Question 230

The minor sold his house to his neighbor after the latter made him believe that it was haunted. Which of the following is true?

A) The seller can ask for rescission.
B) The seller can ask for annulment.
C) The seller can ask for declaration of nullity of contract.
D) The seller can ask for reformation of contract.

Answer 230

B) The seller can ask for annulment.

Question 231

The minor sold his house to his neighbor after the latter made him believe that it was haunted. Which of the following is true?

A) The seller can ask for annulment within 4 years from the date of contract.
B) The seller can ask for annulment within 4 years from the time he reaches legal age.
C) The seller can ask for annulment within 4 years from the time he realizes that there is no such thing as haunted house.
D) The seller can ask for annulment and that right does not prescribe.

Answer 231

B) The seller can ask for annulment within 4 years from the time he reaches legal age.

Question 232

The owner said that he is going to sell his house to his neighbor who said that he is going to buy it. Which of the following is true?

A) The owner can ask for rescission.
B) The owner can ask for annulment.
C) The seller can ask for declaration of nullity of contract.
D) The seller can deny in court that there was an agreement.

Answer 232

D) The seller can deny in court that there was an agreement.

Question 233

The owner authorized in writing his agent to sell his property for not less than Php 10 million. The agent sold it at Php 8 million. Which of the following is true?

B) The owner can ask for annulment of sale
C) The owner can ask for declaration of nullity of sale.
D) The owner can ignore the sale.

Answer 233

D) The owner can ignore the sale.

Question 234

The seller sells to the buyer the property he previously mortgaged but now foreclosed and owned by the bank. Which of the following is true?

A) The buyer can ask for declaration of nullity of sale and demand the return of his money plus interest.
B) The buyer can ask for declaration of nullity of sale and demand the return of his money.
C) The buyer can ask for declaration of nullity of sale but he cannot demand the return of his money.
D) The buyer can ask for declaratio of nullity of sale and demand the return of his money as long as he can return the property to the seller.

Answer 234

B) The buyer can ask for declaration of nullity of sale and demand the return of his money.

Question 235

The seller sells to the buyer the property he previously mortgaged but now foreclosed and owned by the bank. Which of the following is true?

A) The buyer can ask for declaration of nullity of sale within 4 years from date of contract.
B) The buyer can ask for declaration of nullity of sale within 4 years from the discovery that the seller is no longer the owner.
C) The buyer can ask for declaration of nullity of sale within 4 years from his full payment of the contract price.
D) The buyer can ask for declaration of nullity of sale anytime.

Answer 235

D) The buyer can ask for declaration of nullity of sale anytime.