Multiple Choice Flashcards by DAZ, KRISTEL ANN, P.

A ________ is essentially a contractual agreement between a seller and a buyer, where one party transfers ownership of a thing to another party for a price or consideration.
a. Sale
b. Principal
c. Bilateral
d. Commutative

A. Sale

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What is the characteristic of a sale where both parties have reciprocal obligations?
a. Nominal Contract
b. Consensual Nature
c. Bilateral Contract
d. Commutative

C. Bilateral Contract

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What is the characteristic of sale where there’s a mutual exchange of duties which ensures that both parties benefit from the transaction.
a. Bilateral Contract
b. Nominal Contract
c. Consensual Nature
d. Commutative

A. Bilateral Contract

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What is the characteristic of a sale where both parties exchange something of value.
a. Consensual Nature
b. Commutative
c. Principal Contract
d. Onerous Transaction

D. Onerous Transaction

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A characteristic of sale that stands independently and does not rely on another agreement for its validity
a. Commutative
b. Onerous Transaction
c. Principal Contract
d. Nominal Contract

C. Principal Contract

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The ____ refers to the item being sold in a sales transaction.
a. Subject Matter
b. Price
c. Product
d. Consent

a. Subject Matter

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This occurs when the debtor transfers ownership of a property to the creditor as a means of extinguishing a debt.
a. Sale
b. Contract for a piece of work
c. Dación en pago
d. Cession in payment

C. Dacion en pago

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What do you call when a debtor assigns or surrenders all his or her assets to creditors so they may sell them and apply the proceeds to satisfy outstanding obligations.
a. Barter
b. Cession in payment
c. Dación en pago
d. Contract for a piece of work

B. Cession in payment

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It is a deposit made to a seller that represents a buyer’s good faith to make a purchase such as the acquisition of a new home
a. Earnest Money
b. Option Money
c. Purchase Price
d. Downpayment

A. Earnest Money

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This is the consideration paid for the purpose of holding one to his promise to buy or sell a determinate thing for a certain period of time.
a. Installment
b. Purchase Price
c. Earnest Money
d. Option Money

D. Option Money

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In this remedy, the seller can sue the buyer to recover the agreed-upon price of the goods that were sold but not yet paid for.
a. Action for Price exercised
b. Action for Damages
c. Possessory Lien
d. Right to Examine

A. Action for Price exercised

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Action for the seller to provide financial compensation to the seller for any losses incurred due to the buyer’s non-payment
a. Ordinary
b. Warranties
c. Possessory Lien
d. Action for Damages

D. Action for Damages

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This is a legal right that allows a seller to retain possession of the goods sold until the buyer makes payment for the goods
a. Possessory Lien
b. Action for Damages
c. Warranties
d. Stoppage in Transit

A. Possessory Lien

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An important legal mechanism available to an unpaid seller to protect their interests when the buyer fails to pay for the goods.
a. Replacement
b. Refund
c. Stoppage in Transit
d. Legal Advice

C. Stoppage in Transit

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One of the remedies available to an unpaid seller in a situation where the buyer has defaulted on payment.
a. Stoppage in Transit
b. Special Right to Resell the Goods Exercised
c. Action for Damages
d. Possessory Lien

B. Special Right to Resell the Goods Exercised

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This assures the buyer that the good or service is free from defects, and it is a legally binding commitment.
A. Warranties
B. Refund
C. Redemption
D. Credit

A. Warranties

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It refers on how you keep all records related to the purchase, such as receipts and warranties.
A. Documentation
B. Replacement
C. Notice
D. Legal Advice

A. Documentation

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This refers to the conditions under which the sale on credit occurs. These terms should include the repayment schedule, interest rates, penalties for late payments, and any security measures, such as collateral, to protect the seller in case the buyer defaults on payment
A. Legal Advice
B. Notice
C. Payment terms
D. Credit Terms

D. Credit Terms

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If neither replacement nor a refund is possible or desired, the consumer can request that the goods be __.
A. Redemption
B. Repair
C. Refund
D. Replacement

B. Repair

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It is defined as a transaction involving the transfer of goods, services, funds, property or rights, thereby creating an obligation on the part of those who receive them, that must be complied with in the future.
A. Credit
B. Payment Terms
C. Credit Terms
D. Documentation

A. Credit

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In a pacto de retro sale, it refers to the seller who reserves the right to repurchase.
A. Co-owner
B. Vendor a retro
C. Vendee a retro
D. Insolvent buyer

B. Vendor a retro

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In a pacto de retro sale, it refers to the buyer who temporarily acquires ownership but is obligated to allow repurchase if the vendor exercises their right.
A. Co-owner
B. Vendor a retro
C. Vendee a retro
D. Insolvent buyer

C. Vendee a retro

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This term takes place when the vendor reserves the right to repurchase the thing sold, with the obligation to comply with the provisions of article 1616 and other stipulations which may have been agreed upon.
A. Sale on credit
B. Warranties
C. Legal Redemption
D. Conventional Redemption

D. Conventional Redemption

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A legal remedy where the consumer can demand a new unit that is free from the defects plaguing the initial purchase.
A. Notice
B. Refund
C. Documentation
D. Repair

Replacement

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This type of warranty is not explicitly stated by the seller but is automatically applied by law to protect consumers. It helps ensure that consumers receive products that are fit for their intended purpose and meet reasonable quality standards. A. Notice B. Warranty of Merchantability C. Legal redemption D. Warranty of Fitness for a particular purpose

B. Warranty of Merchantability

This outlines the amount to be paid, the due date, and any conditions for deferred payment, including whether the buyer will pay in full or through installments. A. Payment Terms B. Credit Terms C. Documentation D. Notice

A. Payment Terms

It is exercised after the sale has been perfected against the vendee. The recognition of this right will result in the rescission of the sale. A. Replacement B. Redemption C. Repair D. Pre-emption

B. Redemption

28. This term assures the buyer that the product will perform as expected for the specific use intended, even if it is not explicitly stated in the sales agreement. A. Warranty of Fitness for a particular purpose B. Warranty of Merchantability C. Conventional Redemption D. Replacement

A. Warranty of Fitness for a particular purpose

It is the right to be subrogated, upon the same terms and conditions stipulated in the contract, in the place of one who acquires a thing by purchase or dation in payment, or by any other transaction whereby ownership is transmitted by onerous title. A. Legal Redemption B. Replacement C. Conventional Redemption D. Contractual Obligations

A. Legal Redemption

It is the act or right of purchasing before others. It is exercised before the sale or resale against the would-be vendor A. Replacement B. Pre-emption C. Repair D. Replacement

B. Pre-emption

What is the main purpose of PD 957? A. To regulate commercial real estate transactions B. To protect buyers from unscrupulous developers and sellers C. To increase government revenue from real estate sales D. To encourage foreign investment in real estate

B. To protect buyers from unscrupulous developers and sellers

Under PD 957, how long does a developer have to complete the promised facilities and infrastructure? A. Within six months of project registration B. Within one year of the project’s license issuance or within an approved period C. Within five years of project completion D. Within two years after selling 50% of the units

B. Within one year of the project’s license issuance or within an approved period

3. Before selling subdivision lots or condominium units, developers must first secure a ______ from DHSUD. A. Certificate of Ownership B. Deed of Sale C. License to Sell D. Business Permit

C. License to Sell

What happens if a buyer stops installment payments due to a developer’s failure to complete the project? A. The payments made by the buyer will be forfeited. B. The buyer may demand a refund with interest at the legal rate. C. The buyer must continue paying to avoid penalties. D. The developer will be exempted from liability.

B. The buyer may demand a refund with interest at the legal rate

According to PD 957, when should the title be transferred to the buyer? A. Upon full payment, with no extra fees except registration costs B. After the buyer completes a five-year residency C. Once 80% of the subdivision or condominium project is sold D. When the developer decides it is convenient

A. Upon full payment, with no extra fees except registration costs

What law governs the rights of buyers who fail to pay installment payments? A. Civil Code of the Philippines B. Maceda Law (RA 6552) C. Urban Development Act D. Housing and Land Use Regulatory Act

B. Maceda Law (RA 6552)

Under PD 957, who is responsible for paying real estate taxes before the title is transferred? A. The buyer B. The seller and buyer share the taxes equally C. The developer D. The local government

C. The developer

What is the effect of a waiver clause in a contract that exempts the developer from complying with PD 957? A. It is valid if both parties agree. B. It is null and void. C. It can be enforced in court. D. The developer can demand additional payments.

B. It is null and void

If a buyer occupies the property before the title transfer, when do they start paying real estate taxes? A. Immediately upon move-in B. The following year after moving in C. After the developer completes all amenities D. Once 75% of the units are occupied

B. The following year after moving in

What law complements PD 957 by governing condominium ownership? A. Urban Housing Act B. Maceda Law C. The Condominium Act (RA 4726) D. Real Estate Taxation Law

C. The Condominium Act (RA 4726)

What is the primary objective of the Recto Law? A. To allow sellers to impose multiple penalties on buyers B. To regulate the sale of real estate properties C. To prevent sellers from abusing buyers in installment sales D. To allow buyers to avoid paying for purchased items

C. To prevent sellers from abusing buyers in installment sales

Which of the following is NOT a remedy available to the seller under the Recto Law? A. Exact fulfillment of the obligation B. Cancelling the sale after one missed installment C. Foreclosing the chattel mortgage D. Cancelling the sale after two missed installments

B. Cancelling the sale after one missed installment

Under Article 1484, what happens if the seller chooses foreclosure of a chattel mortgage? A. The seller can still sue for the unpaid balance B. The seller cannot pursue the buyer for any remaining balance C. The buyer must pay the full price before repossession D. The contract is automatically voided

B. The seller cannot pursue the buyer for any remaining balance

What law governs installment sales of personal property in the Philippines? A. Maceda Law B. Recto Law C. Civil Code of 1889 D. Consumer Protection Act

B. Recto Law

What is the scope of the Recto Law? A. Sales of real estate properties B. Installment sales of personal property C. All forms of contracts and agreements D. Transactions with lump-sum payments

B. Installments sales of personal property

Which article in the Civil Code replaced Section 1454-A and contains the Recto Law? A. Article 1485 B. Article 1484 C. Article 1486 D. Article 1454

B. Article 1484

What happens if a lease contract includes an option to buy and the lessor deprives the lessee of the property? A. The lease contract is terminated without penalty B. Article 1484 rules on installment sales apply C. The lessee automatically owns the property D. The seller can sue for the remaining balance

B. Article 1484 rules on installment sales apply

Which of the following statements about deficiency claims is TRUE under the Recto Law? A. The seller can claim a deficiency if foreclosure proceeds are insufficient B. Deficiency claims are allowed only for real property C. Deficiency claims are prohibited after foreclosure D. Buyers must always pay the full balance regardless of foreclosure

C. Deficiency claims are prohibited after foreclosure

What does Article 1486 state regarding forfeiture of installments or rent paid? A. It is always allowed without restriction B. It is valid unless deemed unconscionable C. It is never permitted under any circumstance D. The buyer must return the property before forfeiture applies

B. It is valid unless deemed unsconscionable

Why was Article 1485 included in the Civil Code? A. To ensure that sellers do not disguise installment sales as lease contracts B. To allow sellers to impose additional penalties on buyers C. To regulate the sale of government properties D. To prevent buyers from defaulting on their payments

A. To ensure that sellers do not disguise installment sales as lease contracts

What is another name for the Maceda Law? a) Installment Sales Protection Act b) Realty Installment Buyer Protection Act c) Property Installment Agreement Act d) Homebuyers' Protection Law

B. Realty Installment Buyer Protection Act

Who authored the Maceda Law? a) Claro M. Recto b) Ernesto Maceda c) Ferdinand Marcos d) Jose P. Laurel

B. Ernesto Maceda

The Maceda Law applies to which type of property? a) Personal property b) Real estate used for residential purposes c) Commercial property d) Industrial buildings

B. Real estate used for residential purposes

Which of the following is NOT covered under the Maceda Law? a) House and lot purchased in installments b) Condominium units bought under installment payments c) Subdivision lots purchased through installment d) Agricultural land

D. Agricultural Land

What is the maximum refundable amount a buyer can receive under Maceda Law? a) 50% b) 75% c) 90% d) 100%

C. 90%

What is a key difference between the Recto Law and Maceda Law? a) Recto Law applies to personal property, Maceda Law applies to real estate b) Recto Law applies to real estate, while Maceda Law applies to installment sales c) Recto Law covers real estate, Maceda Law covers personal property d) Both laws apply to all installment sales

A. Recto Law applies to personal property, Maceda Law applies to real estate

If a buyer has paid less than two years of installments, how many days are given as a grace period to pay overdue payments? a) 30 days b) 60 days c) 90 days d) 120 days

B. 60 days

Under the Maceda Law, how much refund is required for buyers who have paid less than two years of installments? a) 0 b) 25% c) 50% d) 100%

A. 0

What is the main purpose of the Maceda Law? a) Protect buyers of residential real estate under installment payments b) Provide additional profits for developers c) Ensure tax compliance for real estate transactions d) Enforce commercial property installment regulations

A. Protect buyers of residential real estate under installment payments

Maceda Law was created mainly to protect: a) Wealthy investors b) Low- and middle-income home buyers c) Commercial developers d) Foreign buyers of Philippine property

B. Low-and middle-income home buyers

1. What is the essence of an agency relationship? a) The agent acts on their own behalf b) The agent acts as a representative of the principal c) The agent takes full ownership of the principal’s business d) The agent does not need the principal’s consent

B. The agent acts as a representative of the principal

2. Which of the following is NOT a characteristic of a contract of agency? a) Consensual b) Unilateral in all cases c) Nominate d) Bilateral

B. Unilateral in all cases

3. Which article of the Civil Code defines agency? a) Article 1868 b) Article 1880 c) Article 1895 d) Article 1900

A. Article 1868

What is the general rule regarding acts that may be delegated to an agent? a) All acts may be delegated without restriction b) Personal acts and acts prohibited by law cannot be delegated c) Only business-related acts can be delegated d) The agent can delegate acts without the principal’s consent

B. Personal acts and acts prohibited by law cannot be delegated

What are the two general types of agency based on manner of creation? a) Voluntary and involuntary agency b) Express and implied agency c) Gratuitous and compensated agency d) General and special agency

B. Express and Implied Agency

When is an agent liable for the acts of a sub-agent? a) If the agent was not authorized to appoint a sub-agent b) If the agent appointed a notoriously incompetent substitute c) If the principal did not allow the substitution d) All of the above

D. All of the above

What is the meaning of "Qui facit per alium facit per se" in agency law? a) He who acts through another, acts himself b) The agent is independent from the principal c) The agent must act in his own interest d) An agent’s authority cannot be revoked

A. He who acts through another, acts himself

What is required for a pledge to be enforceable against third parties? a) A notarized contract b) Registration in a public record c) Delivery of the pledged item to the pledgee d) Both b and c

D. Both b and c

Under Article 1897, when is an agent personally liable to third parties? a) When the agent acts within the scope of authority b) When the agent exceeds their authority without notice c) When the agent follows the principal’s instructions d) When the agent contracts in the principal’s name

B. When the agent exceeds their authority without notice

Under Article 1919, which of the following does NOT automatically extinguish an agency? a) Revocation by the principal b) Death of the principal or agent c) Expiration of the agency period d) The agent’s failure to perform

D. The agent's failure to perform

In a contract of pledge, who retains ownership of the pledged item? a) The pledgee b) The pledgor c) The bank d) The government

B. The pledgor

What is the key difference between a real mortgage and a chattel mortgage? a) A real mortgage involves movable property, while a chattel mortgage involves immovable property b) A real mortgage involves immovable property, while a chattel mortgage involves movable property c) A chattel mortgage does not require a contract d) A real mortgage does not require registration

B. A real mortgage involves immovable property, while a chattel mortgage involves movable property

Under Article 1908, when is a commission agent liable for damages? a) When they fail to collect credits due and demandable b) When they disclose the buyer’s name c) When they sell goods at a higher price d) When they return the goods to the principal

A. When they fail to collect credits due and demandable

Which of the following extinguishes a mortgage? a) Destruction of the mortgaged property b) Sale of the mortgage to another lender c) The debtor’s bankruptcy d) The principal’s inability to pay

A. Destruction of the mortgaged property

When does a guarantee commission make a commission agent liable? a) When the buyer defaults on payment b) When the goods are delivered late c) When the agent does not make a written statement about damaged goods d) When the principal refuses to acknowledge the sale

A. When the buyer defaults on payment

What is the primary purpose of an agency? a) To create a new legal entity b) To extend the personality of the principal through an agent c) To allow agents to act independently d) To avoid liabilities in business transactions

B. To extend the personality of the principal through an agent

Which of the following is NOT an element of a contract of agency? a) Consent of the parties b) A valid consideration c) The agent acts as a representative d) The agent acts within the scope of authority

B. A valid consideration

What type of agency is created when the principal explicitly states their consent, either orally or in writing? a) Implied Agency b) Express Agency c) General Agency d) Ostensible Agency

B. Express Agency

In an agency, who is responsible for authorizing the agent to act on their behalf? a) Sub-agent b) Principal c) Third party d) Commission agent

B. Principal

Which of the following is NOT a mode of extinguishing an agency? a) Revocation by the principal b) Withdrawal by the agent c) Completion of the agency’s purpose d) Resignation of a third party

D. Resignation of a third party

What is the general rule regarding acts that may be delegated to an agent? a) Any act can be delegated b) Only personal acts can be delegated c) Only acts allowed by law can be delegated d) Any act except personal acts or those prohibited by law

D. Any act except personal acts or those prohibited by law

If an agent accepts an agency but fails to carry it out, what is the consequence? a) The agency remains valid b) The principal must compensate the agent c) The agent is liable for damages suffered by the principal d) The agent is automatically excused

C. The agent is liable for damages suffered by the principal

What is the effect of revocation of agency by the principal? a) The agency continues as long as the agent wishes b) The agency is terminated immediately c) The agent must continue to act until a replacement is found d) The agent automatically gains ownership of the agency

B. The agency is terminated immediately

When can an agency NOT be revoked? a) When it is for the mutual interest of both principal and agent b) When the principal loses confidence in the agent c) When the agent requests termination d) When a third party objects to the revocation

A. When it is for the mutual interest of both principal and agent

Under what condition can an agent appoint a substitute? a) Always b) When not prohibited by the principal c) Only when dealing with financial transactions d) Only when they have express written permission

B. When not prohibited by the principal

What is the effect of the death of the principal on an agency? a) The agency continues indefinitely b) The agency is automatically terminated, except in certain cases c) The agent must notify the heirs before continuing d) The agent assumes the principal’s role

B. The agency is automatically terminated, except in certain cases

When does a pledge become enforceable against third parties? a) Only when written consent is provided b) When the pledged item is delivered to the creditor c) When the pledgee becomes the owner of the item d) When the pledgee sells the pledged item

B. When the pledged item is delivered to the creditor

When does implied agency arise? a) When the agent acts in their own name b) When the principal explicitly authorizes the agency c) When the principal’s actions, silence, or inaction indicate consent d) When a contract is notarized

C. When the principal’s actions, silence, or inaction indicate consent

What is a general agency? a) An agency that allows an agent to act in any legal matter b) An agency covering all business of the principal c) An agency that only covers a specific transaction d) An agency that requires notarization

B. An agency covering all business of the principal

What is a special agency? a) An agency covering only a specific transaction b) An agency with unlimited authority c) An agency requiring multiple agents d) An agency granted by the government

A. An agency covering only a specific transaction