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When the debtor binds himself to pay when his means permit him to do so, the obligation is: a. Conditional b. Pure c. Simple d. With a Period ANSWER: D

2. Contracts which cannot be sued upon unless ratified, thus it is as if they have no effect yet are: a. Voidable b. Rescissible c. Void d. Unenforceable ANSWER: D

3. If the obligation of the debtor is "I will pay you my debt after I have arrived from abroad," this is a. Unenforceable b. With a Period c. Void d. Conditional ANSWER: D

4. When the characters of the creditor and the debtor are merged in one and the same person, there is extinguishment of the obligation by: a. Compensation b. Merger of Rights c. Novation d. Remission ANSWER: B

5. Through insidious words or machinations, A was able to induce B to enter into a contract which without them B would not have agreed to it. There is: a. Undue Influence b. Fraud c. Mistake d. Misrepresentation ANSWER: B

6. "A sells to B his lot and house in the city if A decides to transfer and live in the countryside" is an example of: a. Mixed Condition b. Potestative Condition c. Casual Condition d. Resolutory Condition ANSWER: B

7. It is a mode of extinguishing an obligation when two persons in their own right are creditors of each other. a. Confusion b. Reformation c. Compensation d. Novation ANSWER: C

8. A contract is in the stage of conception when: a. There is meeting of the minds. b. Negotiations are in progress. c. The parties come to an agreement. d. The contract is perfected. ANSWER: B

9. If the obligor binds himself to perform his obligation as soon as "he shall have obtained a loan" from a certain bank, this obligation is: a. With a Term b. Conditional c. Suspensive d. Resolutory ANSWER: B

10. Contracts entered into in a state of drunkenness or during a hypnotic spell are: a. Void b. Valid c. Voidable d. Legal ANSWER: C

11. Delay in the giving or delivering of a thing a. Mora solvendi ex re b. Mora solvendi ex persona c. Mora accipiende ex re d. Mora accipiende ex persona ANSWER: A

12. Which of the following statements is false? a. Obligations to give definite things and those that are not susceptible of partial performance shall be deemed divisible. b. Execution of a certain number of days of work shall be divisible. c. Accomplishment of work by metrical units are divisible d. An obligation to pay a certain amount in ten annual installments is divisible. ANSWER: A 13. This contract is without effect unless ratified: a. Marriage between first degree cousins

b. Contract of sale between two insane persons c. Contract of sale between husband and wife d. Donation between husband and wife ANSWER: B

14. Which of the following contracts is not void ab initio? a. Those whose object is outside the commerce of men b. That whose object did not exist at the time of transaction c. That which contemplates an impossible service d. That which is undertaken in fraud of creditors ANSWER: D

15. Rescission of contract can take place in this case a. When the thing which is the object of the contract is legally in the possession of a third person who acted in bad faith b. When he who demands rescission can return whatever he may be obliged to restore c. When the party seeking resolution can perform only as to part and as to remainder d. When the seller cannot return the installments paid to him by the buyer ANSWER: B

16. A defective contract where damage or lesion is essential a. Rescissible b. Voidable c. Unenforceable d. Void ANSWER: A

17. An instrument may be reformed d a. Simple donations inter vivos wherein no condition is imposed b. Wills c. When the instrument does not express the true intention of the parties due to mistake d. When the real agreement is void

ANSWER: C 18. Three of the following contracts are void. Which one is not? a. Oral contract of partnership of three partners and capital contribution is more than P3,000 in cash b. Written contract contemplating impossible services c. Oral contract of partnership where real estate is contributed as capital d. Agent's authority to sell land is given orally. ANSWER: A

19. When a third person assumes the payment of the obligation even without the knowledge and consent of the debtor but with the consent of the creditor a. There is novation b. There is delegation if debtor is released c. There is subrogation d. There is expromission if debtor is released ANSWER: D

20. Which of the following is not an element of legal compensation? a. Debts to be compensated are due and demandable b. There is controversy or adverse claim over any debts to be compensated c. There are two or more debts of the same kind d. There are two or more persons who are creditor or debtors of each other. ANSWER: B Question: Why is it important that obligation in contractsbe faithfully fulfiiled?? Answer: Laws are enacted to have order (or require the performance of a particular action to achieve the same) Since the terms and conditions of a contract are considered the governing laws between parties, it is necessary to faithfully fulfill one's obligation, that is, to avoid the occurrence of dispute. Hence, why do we have to fulfill our obligations, that is to achieving order between the parties to the contract. Question: How do you apply the laws on obligations and contracts to everyday activities and business dealings? Answer: We apply laws on obligations and contracts unconsciously to our daily activities. One will not

notice that in performing a simple common task you have applied several principles on obligations and contracts. Like, for example, buying a piece of pandesal, the buyer will offer to buy and the seller will accept. At this point, once the seller and buyer agrees to the object and price, and their minds have met; each of them will not just rescind or refuse to comply. Even without knowledge of law, one will not just back out from the perfected sale. Then, after the perfection of the contract of sell; unknowingly, they will go on to consummate the same. The buyer will hand the money and the seller, in return, will hand over the pandesal. A clear example of reciprocal obligations, isn't? If the money given is more than the price of the pandesal, the seller will give the change. That is because he knows no one should be enriched at the expense of another; hence, he has the obligation to return what is not due him. Likewise, if what was delivered to the buyer is more than what he paid for, he will return the same under the same principle, creating an implied obligation to return. In a simple, but very common, transaction, the parties are not aware that they are applying the basic principles of law on obligations and contracts. They might not be well versed, or even, have not had any formal education, yet they apply these simple principles of law unconsciously. Thus, If you ask: how we apply laws on obligations and contracts on our daily activities, we apply it unknowingly, but instinctively, depending on one's value.

PART I. OBLIGATIONS 1. Sam is obliged to give Ben on March 1, 2011 a particular parcel of land. Which of the following statements below is correct? a. b. c. d. The obligation to deliver arises upon the fulfilment of the condition. The obligation to deliver arises upon the arrival of the term. The obligation to deliver arises upon the perfection of the contract. The obligation to deliver arises upon full payment of the parcel of land.

2. Refer to the previous question, supposing delivery is made on March 15, 2011, which of the following statements below is the best choice? a. Sam has a real right over the land after March 15, 2011. b. Sam has a personal right over the land and fruits before March 15, 2011. c. Sam has a real right over the land and fruits from March 1, 2011 to March 15, 2011, which is a right that is enforceable against the whole world. d. Sam has a real right over the land and fruits after March 15, 2011, which is enforceable against the whole world. 3. X, a debtor did not deliver his car on February 1, 2011. A Typhoon happened and the car to be delivered was destroyed on February 03, 2011. Will X be liable for the damage? Choose the best answer: a. No, X obligation is extinguished. A specific obligation as a rule is extinguished by a fortuitous event or act of God. b. No, because X was not guilty of bad faith, a recognized exception where a fortuitous event does not exempt. c. No, because X is not yet in legal delay. d. Yes, X will be liable. The obligation is not extinguished based on the principle of genus nunquam perit. 4. Which of the following is with a term or period? a. b. c. d. I will give you P10, 000.00 if your mother dies of cancer. I will give you P10, 000.00 when I have money. I will give you P10, 000.00 after you graduate this March. I promise to pay you P10, 000.00

5. X, Y and Z are obligated to A in the amount of P30, 000.00. X shall only pay if A graduates on 2011 and Y shall pay on January 1, 2012, and Z shall pay when A reaches 25. If A sues X, after he graduated, how much can X be held liable to pay A? a. X, Y and Z are joint debtors of A. Upon fulfillment of the condition, A can only demand P10, 000.00 from X. b. X, Y and Z are solidary debtors of A. Upon fulfillment of the condition, A can demand the whole P30, 000.00 from X subject to reimbursement by the other parties.

c. X, Y and Z are solidary debtors of A. Upon fulfillment of the condition, A can demand P10, 000.00 from X and not the P30, 000.00 as this was the only amount due upon the fulfillment of the condition. d. X, Y and Z are joint debtors of A. Upon fulfillment of the condition, A can demand from any debtor the whole amount of P30, 000.00 subject to reimbursement by the other parties which is really their share of the obligation. PART II. CONTRACTS 1. A wants to borrow from B P100, 000.00 so he offered by way of mortgage his land as security. Both parties agreed on this point but the contract as drafted contained an absolute sale. Supposing A comes to you, what would be your advice? a. b. c. d. The contract must be rescinded because of its defect. The contract must be annulled. The contract must be reformed. The contract is unenforceable unless it is ratified.

2. X sent a letter on February 1, 2011 offering a sale to Y. A letter of acceptance was sent by Y on February 15, 2011. However, A changed his mind and sent a telegram cancelling the acceptance on February 16, 2011. Which of the statements below is true? Choose the best answer. a. The contract of sale is binding since the letter of Acceptance was sent earlier than the telegram cancelling the acceptance. b. Y can still cancel the contract because the letter of acceptance did not yet come to the knowledge of X. c. The contract of sale is binding only at the time the offeror has knowledge of the acceptance. d. Y can still withdraw because he immediately sent a telegram the next day cancelling the contract. 3. Trillanes offered Garcia a car worth P1M. Trillanes gave Garcia a 30-day period to decide. Given the 30-day period for the prospective buyer to decide, could Trillanes withdraw the offer before the lapse of the 30 day period? a. Yes, because Trillanes as the seller has the right to withdraw his offer at any time before acceptance. b. Yes, just by communicating to the offeree that you are withdrawing the offer at any time before acceptance with no consideration involved. c. No, because the contract has already been perfected and such withdrawal is tantamount to a breach in the contract. d. No, since the 30-day period given by Trillanes is already binding between them. 4. A, in a written instrument, donated a real property to B worth P1M. B accepted the donation. Both agreed to affix their signature in the said instrument. B wanted to have the donation registered but the registration requires it to be in a public instrument. Can B then sue to compel A to observe the necessary form? Decide. a. No, because donations are gratuitous in nature, thus the donor acted in pure liberality. b. Yes, because the donation of a real property at a value that exceeds P5, 000.00 is in writing. c. No, because the donation of real property in the first place is not valid absence the requirement of delivery for real contracts.

d. No, because the donation of real property in the first place is not valid absence the formal requirement that it be in a public instrument. 5. Pedro who resides in Cebu wrote to Maria who resides in Manila that he is donating to her a car worth P1M. Upon the receipt of the letter, Maria called Pedro and informed him that she is accepting the donation. On the same day Maria wrote and mailed a letter to Pedro accepting the donation. Immediately after mailing the letter, Maria died. Who is entitled to the car, the heirs of Pedro or Maria? Decide. a. The heirs of Pedro. There was no valid donation. There is acceptance but the donation of a personal property at a value that exceeds P5, 000. 00 must be in writing to have validity. b. The heirs of Pedro. There was no valid donation. The donation in the instant case cannot produce an effect whatsoever. c. The heirs of Maria. There was a valid donation. There was a meeting of the minds when Maria called Pedro and informed him that she is accepting the donation. d. The heirs of Maria. There was a valid donation. The offer became effective upon death, civil interdiction, insanity, or insolvency of either party before acceptance is conveyed.

REVIEWER ON OBLIGATIONS AND CONTRACTS MULTIPLE CHOICE: 1. To pay money, is a kind of; a. Personal obligation b. Real obligation

c. Moral obligation d. Legal obligation

2. A. Day certain is a future event, which may or may not come. B. If Mr. Ming promised to pay when he has the money available, his obligation is one with the period or term. a. Only A is true c. Both are true b. Only B is true d. Both are false 3. It takes place when two persons, in their own right, are creditors and debtors of each other. a. Condonation c. Compensation b. Remission d. Confusion 4. In this kind of contractual obligation, e.g. sale, neither party incurs in delay if the other does not or is nor ready to comply with what is incumbent upon him. a. Pure c. Reciprocal b. One with a period d. Indivisible 5. Grand Dad authorized his grandson to use the new car until he finishes his schooling in college. The obligation contains; a. Positive condition c. Resolutory condition b. Suspensive condition d. None of the above 6. The above kind of conditional obligation is demandable; a. At once c. Upon the arrival of the period b. When the event happens d. None of the above (when he finishes school) 7. A contractor undertook to erect a 10-storey building for Ph80,000,000 until June 30th 2009. Due to several unexpected inclement weather, sadden shortage of cement and other construction materials and without his fault, the construction was only finished on the agreed date up to the 7th floor. Can his obligation be extinguished? a. No, because the contract must be complied with in good faith as it is the law between them. b. No, because he is already in delay. c. Yes, because of fortuitous events. d. Yes, due to substantial compliance in good faith 8. Fitch agreed to give his cellphone to Gabs that is when his cat dies. The obligation is deemed; a. Conditional c. one with a day certain b. One with a term of period d. b and c are correct e. none of the above 9. Which statement is correct? a. contract is the result of an obligation b. obligation is the result of a contract

c. all agreements are contracts d. whenever there is an obligation, there is a contract 10. Fay is indebted to Crish in the sum of Php 10,000. Since he is short of cash, he offered to give his wristwatch to the creditor who accepted the offer. This is known as; a. Subrogation c. Dacion en pago b. Cession d. None of the above 11. Yeng lent Php. 10,000.00 to Ditto for his tuition fee for the current school year. The obligation is considereda. one with a period c. pure (because payment is demandable at once) b. facultative (because it is a single prestation) d. personal obligation 12. Sky is leaving for abroad permanently and offered to sell her 3 cars (Toyota, Honda and Nissan). Bayer promised to buy any one of them, the obligation of Sky is considereda. Pure c. Facultative b. Alternative d. Indivisible ` 13. Ordinances that prohibits smoking and jaywalking are deemeda. Legal obligations c. Natural obligations b.Contractual obligations d. Moral Obligations 14. Similarly, these are examples of aa. Real obligation b. Personal positive obligation

c. Negative personal obligation d. All of them

15. Boggy owes Wano Php. 10,000.00. After several promises to pay, the debtor has yet to make good such promise to pay. Later, he offered to pay Php. 4,000.00 only. Out of frustration, Wano accepted the payment. Is the indebtedness extinguished? a. No, because there is still a balance. b. No, because of solution indebiti. c. Yes, because the creditor accepted such incomplete payment without protest. d. Yes, because of condonation. 16. The general principle that the contracting parties may established such stipulations, clauses, terms and conditions as they may deem convenient in the premises. a. Principle of mutuality c. Autonomy of contracts b. Principle of relativity d. None of the above 17. A. A red Toyota car (model 2008) is an indeterminate thing. B. If Mr.Ming promised to pay when he has the money available, his obligation is one with a period or term. a. Only A is true c. Both are true b. Only B is true d. Both are false 18. The clothing shop undertook to tailor a special graduation gown for Melo in time for his valedictory address on the 15th May 2009. Since there were occasional brownouts, the shop failed to finish the gown on this date. Will the debtor be liable for delay? a. No, because there is yet no demand for delivery b. No, due to fortuitous event (manpower shortage) c. Yes, because of their stipulation d. Yes, because time is controlling motive for establishment of the contract

19. In a contract of sale, the buyer must pay the purchase price in order to extinguish his obligation. Insofar as the seller is concerned, his obligation may be extinguished my means of a. Payment c. Performance b. Delivery d. All of the above 20. An obligation arising from the meeting of minds of parties. a. Natural Obligation c. Contractual Obligation b. Legal Obligation d. Quasi-contract 21. Dodee will sell his condominium unit to Jawo for Php. 5 Miliion on June 16th 2009. It is earning rental payments in the meantime. If, however, Dee delivered the property on September 2009, when will Jay be entitled to the fruits of the unit, if any? a. From the time that they agreed upon b. From the time the obligation to deliver has come (or the rentals beginning June 15th) c. From the time of delivery (in September 2009) d. None of the above 22. What kind of right was acquired by Jawo on the 15th June? a. Real right c. Both of them b. Personal right d. Legal right 23. As regards the right of Jawo acquired at the time of delivery, it is considered a a. Real right c. Both of them b. Personal right d. Legal right

24. In an obligation (with suspensive condition) and the thing obliged to be given is improved by its nature, or by the time, the improvement shall belong to a. Creditor c. Both of them b. Debtor d. It depends on their agreement 25. Donnie bought 50 bottles of imported wines for Php. 100,000.00 that was to be delivered on the 31st December 2008. Since the seller failed to deliver on tome, he is therefore liable for damages due to his a. Delay or default c. Contravention of the terms of the obligation b. Negligence d. None of the above 26. Ordinances that prohibits smoking and jaywalking are deemed a. Legal obligations c. Natural obligations b. Contractual obligations d. Moral obligations 27. A contract that contains a stipulation in favor of a third person, who communicated his acceptance to the obligor before its revocation, is called a. Insurance contract c. Stipulation pour autrui b. Aleatory contract d. None of the above 28. Real contracts such as deposit, pledge and commodatum, are perfected upon a. Consent c. Both of them b. Delivery of the object d. Demand

29. When one of the contracting parties is compelled by a reasonable and well-grounded fear of an imminent and grave evil upon his person or property, or upon the person or property of his spouse, descendants or ascendants, to give his consent. There is a. Violence c. Undue influence b. Intimidation d. Fraud 30. A seller offered to sell his other cellphone for Php.10,000.00 to his friend. The latter agreed to buy but asked for discounted price. There is a. A perfected contract of sale c. Counter offer by the buyer e. Both c and d b. Consent to buy from the buyer d. Qualified acceptance 31. Nelson (who is 30 years of age) sold his car to Raine for Php.500,000.00 the buyer is however only 17 years, 11months and 29 days old. The contract of sale is a. Valid and perfected c. Voidable e. None of the above b. Rescissible d. Both a and c 32. From the moment of the meeting of minds, the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature may be in keeping with good faith, usage and law. This is the principle of a. Consensuality c. Mutuality b. Good faith d. Both a and b 33. A special promise to answer for the debt, default or miscarriage of another must be in writing to be a. Valid c. Paid b. Enforceable d. None of the above 34. A contract entered into in the name of another by one who has no authority or legal representation or who has acted beyond his powers, shall be a. Unenforceabl e c. Rescissible b. Voidable d. Void 35. Failure to disclose facts when there is duty to reveal them, as when the parties are bound by confidential relations, constitutes a. Fraud c. Both of them b. Mistake d. Only b is correct 36. In contracts of pure beneficence, the cause or consideration is a. Merely liberality of the benefactor c. Payment b. Services rendered d. None of the above 37. In this kind of contract, the cause is understood to be, for each contracting party, the prestation or promise of a thing or service by the other a. Onerous contract c. Contracts of pure beneficence b. Remuneratory d. All of them 38. This kind of contract cannot be ratified. Neither can the right to set up the defense of illegality be waived a. Voidable c. Rescissible b. Void d. Unenforceable

39. Contracts whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy. a. Voidable c. Rescissable b. Void d. Unenforceable 40. This creates the obligation to return the things which were the object of the contract, together with their fruits, and the price with its interest, provided that he who demands it can return whatever he may be obliged to restore. a. Rescission c. Fulfillment b. Annulment d. Payment 41. These vitiate consent a. State of drunkenness c. Mistake, fraud, violence, intimidation b. Consent given during a hypnotic spell d. All of them e. Only c is correct 42. An absolutely simulated or fictitious contract is a. Void c. Both of them b. Inexistent d. None of the above 43. When one of the contracting parties dies, his property or assets will immediately go to the a. Heirs c. Assigns b. Estate d. Creditors 44. In order that it may make a contract voidable, it should be seriousthat is in reference to a. Fraud c. Both of them b. Mistake d. Only b is correct 45. When through insidious words or machinations of one of the contracting parties, the other is induced to enter into a contract which without them he would not have agreed to. This is a. Violence c. Undue influence b. Intimidation d. Fraud 46. Beth and Buddyboth minorsagreed to buy and sell gold watch of the former. The contract of sale is a. Voidable because of minority c. Unenforceable b. Void because of lack of consent d. Rescissible 47. It becomes ineffective upon the death, civil interdiction, insanity, or insolvency of either party before acceptance is sent and conveyed to the other. a. Acceptance c. Consent b. Offer d. None of the above 48. As a general rule, one of the enumeration is not a requisite for the existence of a valid contract a. Consent of the contracting parties b. Object certain which is the subject matter of the contract c. Cause of the obligation which is established d. Delivery

49. Under their contract of employment, Angela was being paid a daily wage well above the Minimum Wage Law because of the current economic crisis; the employer decided to reduce her pay but still complied with the law. Can the employee complain against the employer? a. No, because of fortuitous event (financial losses) b. No, because anyway the law was not violated c. Yes, unless the losses are clearly proven d. Yes, because the minimum wage law was violated 50. SUPPOSING that in the foregoing problem, the employee, under their written contract of employment agreed to receive less pay that that allowed by law because of lack of work, can he still complain lateron? a. No, it is better to have work and no work at all b. No, because the contract is the law between them c. Yes, because of solution indebit (wrong payment) d. Yes, because the minimum wage law was violated

Multiple Choice Questions in Obligations and Contracts

1. It is the juridical relation resulting from lawful, voluntary, and unilateral acts by virtue of which the parties become bound to each other to the end that no one shall be unjustly enriched or benefited at the expense of another. a. b. c. d. Agreement Vinculum juris Contracts Quasi-Contracts

2. This takes place when something is received when there is no right to demand it, and it was unduly delivered thru mistake. a. b. c. d. Solutio Indebiti Negotiorum Gestio Vinculum juris Prestation

3. This happened when the creditor make a demand and the obligor fails to deliver the thing. a. Negligence b. Mora solvendi c. Mora accipiendi d. Compensatio morae 4. Demand is not necessary to incur delay when: a. b. c. d. Creditor refuses the performance without just cause. The debtor is guilty of non-performance. Time is the controlling motive If the obligation bears interest

5. In what instance may we consider that there is no delay? a. b. c. d. In civil obligations In positive obligation In obligation arising from crime In natural obligation

6. In Accion subrogatoria the creditor may exercise all of the rights and bring all of the actions which the debtor may have against third persons if: a. If the account is personal

b. The debtor's acts are fraudulent c. The debtor has performed an act subsequent to the contract, giving advantage to other persons d. Creditor must have the right of return against debtor 7. In Accion Pauliana Rescission, which involves the right of the creditor to attack or impugn by means of rescissory action any act of the debtor which is in fraud and to the prejudice of his rights as creditor provided: a. The debt is due and demandable b. There is a failure of the debtor to collect his own debt from 3rd persons either through malice or negligence c. The debtor's assets are insufficient d. The debtor has performed an act subsequent to the contract, giving advantage to other persons 8. It causes the extinguishment or loss of rights already acquired upon the fulfillment of the condition, that is, the happening of the event which constitutes the condition. In other words, the fulfillment of which will extinguish an obligation (or right) already existing. a. b. c. d. Condition subsequent Suspensive facultative condition positive condition

9. When the thing deteriorates with the debtors fault, the creditor may choose one of the following: a. Mutual restitution b. Rescission (cancellation) of the obligation with indemnity for damages c. Suffer the deterioration of the thing d. Institute an action for negligence. 10. It is a future and certain event upon the arrival of which the obligation (or right) subject to it either arises or is terminated. a. b. c. d. Fortuitous events Condition Period Date and time


1. 2. 3. 4. 5. 6. 7. 8. 9. 10.