Question and Answer

With Justification
1. The determination of the meaning of the terms or words used by the parties
in their written contract is called?
a. Psychological Contract
b. Interpretation of Contract
c. Quasi Contract
d. None of the above
B. Interpretation of Contract. According to Article 1370, Interpretation of
Contract is the determination of the meaning of the terms or words used by
the parties in their written contract. It is the Process of ascertaining the
intention of the parties from the written words contained in the contract
2. A contract was executed between X and Y. the contract recited that it is a
sale of the parcel of land belonging to X for P100,000. In the contract, X is
described as the vendor and Y, the vendee. Therefore, the contract should be
considered a?
a. Contract of Sale
b. Contract of Lease
c. Quasi Contract
d. Contract of Adhesion
A. Contract of Sale. The terms of the contract are clear and it does not
appear from the circumstances that the intention of the parties is contrary to
the literal meaning of said terms. Therefore, the contract should be
considered a contract of sale. No interpretation should be given which would
alter or change the plain meaning of the wording
3. In order to judge the intention of the contracting parties, their
contemporaneous and subsequent acts shall be?
a. Considered
b. Principally considered
c. Disregard
d. Reviewed
B. Principally Considered. According to Article. 1371 In order to judge the
intention of the contracting parties, their contemporaneous and subsequent
acts shall be PRINCIPALLY CONSIDERED

4. R and E entered into a contract entitled Contract of Lease. Although the

contract refers to R as lessor and to E as Lessee, it states that the possession

and ownership of the land are transferred to E. the title to the land was given
by R to E who registered the land in his name. Before the date of the
contract, E wrote a letter to R offering to buy the land. Is the Contract of
Lease Valid?
a. Yes
b. No
c. Either A or B
d. Cannot be determined
B. No. By their acts, the parties clearly indicate that their evident intention is
to make E the owner of the land. Hence, the contract should be interpreted as
one of sale.
5. S sold his house including all the furniture therein to B. Is Ss refrigerator
included?
a. Yes
b. No
c. Maybe
d. Cannot be determined
B. No. the term all should not be understood to include Ss refrigerator
which is distinct and different from furniture
6. Referring to question 5. Does the selling also include the chair borrowed by
S to C?
a. Yes
b. No
c. Maybe
d. Cannot be determined
B. No. According to Article 1372. However general the terms of a contract
may be, they shall not be understood to comprehend things that are distinct
and cases that are different from those upon which the parties intended to
agree.
7. S sold his parcel of land to B. Now S has two lands, one owned by him
absolutely and another land of which he is a co-owner with C. C did not give
his consent to the sale. What land should S sold to B?
a. S owned land by him absolutely
b. S and C co-owned land
c. Both lands
d. None of the above
A. S owned land by him absolutely. The sale should refer to the land owned
by him alone as this would make the contract effectual. Article 1373.
8. If one interpretation makes a contract valid and other makes it illegal. Which
one is warranted by the rule stated by Article 1373?

a.
b.
c.
d.

The former interpretation

The latter interpretation
Both interpretation
None of the above

A. The Former interpretation. According to Article 1373. If some stipulation

of any contract should admit of several meanings, it shall be understood as
bearing that import which is most adequate to render it effectual.
9. R leased his house to E. In the contract, it was stated that E should not
sublease the house without the written consent of R. Another stipulation
therein contained stated that E should pay P1,000 as additional rent a month
should he violate this condition. E subleased the house without the consent
of R. what should R do?
a. R should eject the right of E
b. R should do nothing
c. R should collect an additional payment
d. R should do nothing
C. R should collect an additional payment. In the light of the clause stating
the penalty for the violation of the condition. (Article 1374)
10.X rendered services to Y but the contract did not provide for the amount of
compensation to be paid. The amount must be determined by?
a. Rate customarily paid in the place where the services were rendered
b. X should demand the amount to Y
c. Y should demand the amount to X
d. Both of them should agree in one amount
A. Rate customarily paid in the place where the services were rendered.
According to Article 1376. The usage or custom of the place shall be borne
in mind in the interpretation of the ambiguities of a contract, and shall fill
the omission of stipulations which are ordinarily established.
11.Most of the terms of which do not result from mutual negotiation between
the parties as they are usually prescribed in printed forms prepared by one
party to which the other may adhere if he chooses but which he cannot
change.
a. Contract of Sale
b. Contract of Lease
c. Quasi Contract
d. Contract of Adhesion
D. Contract of Adhesion. According to the Legal definition of the book.
12.R gave his car to E. It is not clear whether the contract is a donation or a
commodatum. what should be infer to this contract?
a. Donation

b. Commodatum
c. Either; or
d. None of them
B. The contract should be presumed as mere commodatum because it would
transmit lesser rights than a donation since R retains his ownership of the
car. (Article 1378)
13.If the
of?
a.
b.
c.
d.

contract in question is onerous, the doubts should be settled in favor

Greatest reciprocity of interest
Limited reciprocity of interest
Interest
None of the above

A. Greatest reciprocity of interest. According to the definition of Onerous

Contract by Article 1378.
14.S sold to B his land. S has many lands. It cannot be determined which land
was intended by the parties to be the subject of the sale. What supplementary
rule should be applied?
a. Gratuitous contract
b. Onerous contract
c. Principal object of the contract
d. None of the above
C. Principal object of the contract. According to the definition of principal
object of the contract, If the doubts refers to the principal object of the
contract and such doubt cannot be resolve thereby leaving the intention of
the parties unknown, the contract shall be null and void.
15.In relation to question 14. The contact between S and B shall?
a. Be null and void
b. Shall prevail
c. Still be valid
d. None of the above
A. Be null and void. According to the definition of principal object of the
contract, If the doubts refers to the principal object of the contract and such
doubt cannot be resolve thereby leaving the intention of the parties
unknown, the contract shall be null and void.

16.S sold to B his condominium unit Including all its contents. In the unit,
there is an antique chair belonging to X which X agreed to sell to S. Is the
chair to be included in the sale of the unit?
a. Yes
b. No

c. Maybe
d. Cannot be determined
B. No. According to Art.1372, however general the terms of a contract may
be, they shall not be understood to comprehend things that are distinct and
cases that are different from those upon which the parties intended to agree.
Since it was not intended that the chair be included, then it isnt.
17.X, architect, designed and supervised the construction of the house of Y. The
parties failed to agree beforehand the professional fee of X. Y paid X with
the consideration of contemporaneous and subsequent acts and the usage or
custom of the place. Is the action correct?
a. Yes
b. No
c. Maybe
d. Cannot be determined
A. Yes. According to Arts.1371 & 1376, the payment Y is bound to make to
X is determined, with consideration to their contemporaneous and
subsequent acts, and the usage or customs of the place.
18.Referring to question 17. The professional fee was agreed upon, but it is not
clear from the written contract prepared by X upon the request of Y whether
it should be the fixed amount of P200,000 or 6% of the cost of production.
How much is Y liable to pay?
a. Lesser amount
b. Greater amount
c. X should decide
d. None of the above
A. According to Art.1377, Y is liable to pay the lesser amount since it was
Xs fault that an obscurity occurred and the interpretation should not favor
the person who caused the obscurity.