BUSINESS LAW (PRELIMS) b.

When parties stipulate that there shall be liability

even in case of fortuitous event
Choose the best answer. c. When the nature of obligation requires
assumption of risk
1. The obligation of a school to provide its students a safe d. When the obligation is to deliver a determinate
and secure environment and an atmosphere conducing to thing and no stipulation was made in case of
learning is an obligation arising from: fortuitous event.
a. Law 12. X obliged himself to paint the house of Y. Y refused.
b. Contract What is the remedy available to X?
c. Quasi contract a. Specific performance
d. Quasi-delict b. Rescission
2. Statement 1: there is no delay in obligations not to do. c. Damages
Statement 2: delay is applicable only to the debtor, never d. No recourse.
to the creditor. 13. X is obliged to give Y a specific car if Y passes the CPA
a. Both statements are true. board exam. Ds obligation is an example of:
b. Both are false. a. Pure obligation
c. Only Statement 1 is true. b. Obligation with suspensive condition
d. Only statement 2 is true. c. Obligation with resolutory condition
3. The principle of negotiorum gestio does not apply: d. Obligation with suspensive period.
a. When the property or business is not neglected 14. One of the following is a void obligation:
or abandoned. a. D is obliged to give C P5,000 if C does not go to
b. When the officious manager has been tacitly the moon.
authorized by the owner. b. D is obliged to give C P5,000 if D goes to Leyte.
c. Both a and b c. D is obliged to give C P5,000 if C goes to Leyte.
d. Neither a nor b d. D is obliged to give C P5,000 if D wins the lotto.
4. It is the thing that is particularly designated or physically 15. I obliged myself to give you my car if he dies. Obligation
segregated from all others of the same class. is:
a. Generic thing a. a pure obligation
b. Indeterminate thing b. subject to resolutory condition
c. Determinate thing c. subject to suspensive condition
d. Real thing d. with a period
5. Refers to delay on the part of the creditor. 16. I obliged myself to give you my car if he dies of cancer.
a. Mora solvendi Obligation is:
b. Mora accepiendi a. a conditional obligation
c. Simply mora b. subject to resolutory condition
d. Compensation morae c. subject to suspensive condition
6. The following are the requisites of an obligation, except: d. with a period
a. Juridical tie 17. D is obliged to give C a specific watch, a specific ring, or
b. Consent
a specific bracelet. The parties agreed that C will have the
c. Active subject
d. Object right to choose the thing which will be given to him.
7. It is a wrong committed without any pre-existing relations Before C could make his choice, the watch and the ring
between the parties: are lost through Ds fault. What is the right of C?
a. Natural obligation a. C may choose the delivery to him of the bracelet,
b. Quasi-delict or the price of the watch or price of the ring plus
c. Quasi-contract damages.
d. Crime b. C cannot choose the price of the watch or the
8. Every person obliged to do something is also obliged to price of the ring because the said objects have
take care his obligation with: already been lost.
a. Extraordinary diligence c. C can only choose to have the bracelet because
b. Diligence of a father of a good family
anyway, D can still perform his obligation.
c. Diligence of a good father of a family
d. None of the above.
d. None of the above
18. A, B, C, and D are obliged to give V, W, X, Y and Z
9. Which of the following is a determinate thing:
a. A cellphone. P20,000. Which is true.
b. A ring with diamond embellishment a. V may collect from A P20,000.
c. Toyota car with engine no. 12344, body no. b. V may collect from A P5,000
c. V may collect from A P1,000
39394 and plate no. abc123
d. V may collect from A P4,000
d. Secossana bag
19. In obligations with a penal clause, the creditor as a rule
10. Demand must be made on the due date of the obligation
may recover from the debtor in case of breach the
in order for delay to exist in one of the following cases.
following:
Which is it?
a. The penalty as agreed upon, plus damages and
a. When it was stipulated by the parties that
interest
demand need not be made.
b. Penalty and damages
b. When the law provides that demand need not be
c. Penalty and interest
made. d. Penalty only
c. When the obligation does not indicate whether 20. A, B, and C are solidary debtors of X and Y for P30,000,
demand must be made or not on due date. joint creditors.
d. When time is of the essence. a. X may collect P30,000 from either A, B, or C.
11. There shall be no liability for loss due to fortuitous event
thereafter, he must give to Y P25,000
in which one of the following cases?
representing the share of Y.
a. When debtor delays
 b. X may collect P30,000 from the debtors but not
more than P10,000 from each of them.
Thereafter, he must give to Y P15,000
representing the share of Y.
c. X may collect P15,000 from either of the
debtors. Thereafter, he is not obligated to give
any amount to Y.
d. X may collect P15,000 from the debtors but not
ore than P5,000 from each of them. Thereafter,
he is not obligated to give any amount to Y.
21. The debtor shall lose the right to make use of the period in
the following cases, except when he:
a. Becomes insolvent
b. Violates any undertaking in consideration of
which the creditor agreed to the period.
c. Attempts to abscond
d. does not furnish any guaranty or security to the
creditor.
22. An obligation ceases to be alternative and becomes a
simple obligation in the following cases, except when:
a. The debtor has communicated his choice to the
creditor
b. The right of choice has been expressly granted to
the creditor and his choice has been
communicated to the debtor.
c. Among the several prestations that are due, only
one is practicable.
d. Three prestations are due but one of them is
unlawful or impossible.
23. Consider the following statements:
I. The nullity of the principal obligation carries
with it the nullity of the penal clause.
II. The nullity of the principal obligation does not
carry with it the nullity of the penal clause.
III. The nullity of the penal clause carries with it the
nullity of the principal obligation.
IV. The nullity of the penal clause does not carry
with it the nullity of the principal obligation.
a. Statements I and III are true.
b. Statements I and IV are true.
c. Statements II and III are true.
d. Statements II and IV are true.
24. An obligation with various prestations are due but the
performance of all of them is required in order to
extinguish the obligation is known as:
a. Alternative obligation
b. Facultative obligation
c. Conjunctive obligation
d. Simple obligation
25. On May 1, 2010, D executed a written undertaking
obliging himself to deliver 100 sacks of rice to C on May
31, 2010. On May 28, 2010, C demanded the delivery of
100 sacks of rice from D but D did not comply. The
following day, a fire of undetermined origin destroyed Ds
warehouse together with about 500 sacks of rice stored
therein and from which D intended to get 100 sacks of
rice for delivery to C.
a. Ds obligation to deliver 100 sacks of rice to C is
extinguished, the cause of the loss being a
fortuitous event.
b. Ds obligation to deliver 100 sacks of rice to C is
not extinguished because D was in default.
c. Ds obligation is to pay damages because he was
in default.
d. Ds obligation to deliver 100 sacks of rice to C is
not extinguished because he can get 100 sacks of
rice from other sources.
For nos. 26-28 consider the following facts:
Dolores borrowed P15,000 from Consuelo. On due date, Dolores
was not able to pay but she promised to give Consuelo a specific
ring, a specific bracelet or a specific necklace, in payment of the
debt. Consuelo accepted the offer of Dolores.
26. What kind of obligation is the new obligation of Dolores?
a. Facultative obligation
b. Compound obligation
c. Alternative obligation
d. Simple obligation
27. How was the obligation of Dolores to pay P15,000
extinguised?
a. By compensation
b. By novation
c. By confusion
d. By condonation
28. Assume that before Dolores could deliver any of the ring,
bracelet or necklace, the ring and the bracelet were lost
successively through the fault of Dolores. In this case:
a. Consuelo may demand the payment of the price
of the ring or the price of the bracelet plus
damages, or the delivery of the necklace.
b. Dolores may deliver the necklace to Consuelo
without any obligation to pay damages
c. Dolores may deliver the necklace to Consuelo
with the obligation to pay damages because the
ring and the necklace were lost through her fault.
d. Consuelo may demand the payment of the price
of the bracelet which was the last item that was
lost, plus damages.
29. Which of the following is not a proper remedy for the
creditor?
a. To compel the debtor to make the delivery if the
obligation is to deliver a determinate thing
b. To ask that the obligation be complied with at the
expense of the debtor, if the obligation is to
deliver a generic thing
c. To compel the debtor to perform the obligation,
if the obligation is an obligation to do.
d. To ask the debtor that what has been done be
undone, if the obligation is an obligation not to
do.
30. A, B, C and D owe X, Y and Z the sum of P12,000. Based
on the foregoing facts, which of the following statement is
incorrect?
a. The obligation is valid.
b. There are 7 distinct debts in the obligation.
c. Each debtor is liable only for a total of P3,000.
d. Each creditor is entitled to collect a maximum of
P4,000.
31. D is obliged to deliver either a specific bracelet, a specific
necklace, or a specific ring to C. No mention was made in
the agreement of the parties as to who has the right of
choice. Before due date, C wrote D informing the latter
that he (C) preferred that the ring be delivered to him. D
received the letter but did not give any response to C.
Subsequently, the ring was lost through a fortuitous event.
a. Ds obligation to C is extinguished by fortuitous
event.
b. D is obliged to pay damages to C because he was
in default when he did not respond to the letter.
c. Ds obligation is not extinguished as he may
deliver either the bracelet or the necklace.
d. Ds obligation became a simple obligation when
C informed D of his (Cs) preference on the
object to be given to him.
32. D, a professional singer, agreed to sing for a fee of
P20,000 at the birthday party of C who was a fan of D.
due to numerous commitments, D could not go to the
 party of C. He sent X, another professional singer who 37. C had a personal right against D for the delivery of the
was known to sing better than D, to sing at Cs party, and thing and its fruits beginning on:
informed C that the latter needed to pay only P10,000. a. January 1, 2010
a. D may validly assign his obligation to sing b. June 30, 2010
because the reduced fee was advantageous to C. c. July 1, 2010
b. D may validly assign his obligation to sing d. September 30, 2010
38. C acquired a real right over the thing and its fruits on:
because X could perform the obligation better
a. January 1, 2010
than him. b. June 30, 2010
c. D may not validly assign his obligation to sing c. July 1, 2010
because it is personal in nature. d. September 30, 2010
d. C cannot refuse the performance of the 39. the kind of fraud which renders an obligation void is:
obligation by X because the obligation to sing is a. causal fraud
transmissible since it would not require much b. incidental fraud
effort on the part of either D or X who are both c. fraud in performance
professional singers. d. future fraud
33. Which of the following obligations is void: 40. D appointed C as his agent to purchase a parcel of land
a. D agreed to hire C as manager of his (Ds) belonging to X. D promised to give a commission of
businesses if C is willing to relocate to Cebu. P10,000 to C if C can present to D the deed of sale signed
b. D agreed to paint the portrait of C if D will by X in favor of D on or before December 31, 2010. The
enroll in a painting class this coming month. condition of the obligation is:
c. D promised to pay his debt to C amounting to a. Negative
P10,000 as soon as possible. b. Positive
d. D promised to pay C P10,000 when his means c. Impossible
permit him to do so. d. No condition exists.
34. D is obliged to deliver 10 sacks of Granador rice to C. 41. In No. 40, which of the following statement is incorrect.
a. Ds obligation is extinguished if it is already
The parties agreed that should D fail to perform his
January 1, 2011 and C has not yet presented to D
obligation as stipulated. D will pay a penalty of P1,000.
the deed of sale duly signed by X.
On due date, D made a delivery of 20 sacks of rice but
b. Ds obligation is extinguished on December 5,
each sack contained a mixture of granador rice and
2010 if X dies on such date without his having
another variety of lower quality. C discovered the fraud.
signed the deed of sale.
a. C may demand the payment of the stipulated
c. Ds obligation is demandable if C presents to D
penalty only.
on or before December 31, 2010 the deed of sale
b. C may demand the payment of the stipulated
duly signed by X.
penalty and damages although there was no
d. Ds obligation is demandable if it is already
stipulation on the latter.
January 1, 2011 and C has not yet presented to
c. C may demand the payment of damages only if
D the deed of sale duly signed by X.
there was stipulation with respect to damages.
42. X obliged himself to give Y a car owned by X. X has
d. C may demand the payment of damages in
many cars. What are the remedies of Y in case X failed to
addition to the stipulated penalty only if D
fulfill his obligation?
refuses to pay the penalty.
a. Ask for specific performance.
35. The following are the sources of an obligation, except:
b. Ask another person to deliver a car at the
a. Quasi-contract
b. Contract expense of X.
c. Quasi-delict c. Compel X to deliver one of his cars plus
d. Quasi-law damages.
36. These statements are presented to you: d. Damages.
I Several prestations are due but all must be 43. Statement 1: there is no delay in obligations not to do.
performed to extinguish the obligation. Statement 2: delay is applicable only to the debtor, never
II If there are void prestations, the other prestations to the creditor.
may still be valid, hence, the obligation remains. a. Both statements are true.
b. Both are false.
In your evaluation of the foregoing statements: c. Only Statement 1 is true.
a. Both statements refer to an alternative obligation. d. Only statement 2 is true.
b. Neither statement refers to an alternative 44. Refers to delay on the part of the creditor.
a. Mora solvendi
obligation.
b. Mora accepiendi
c. Only statement 1 refers to an alternative
c. Simply mora
obligation. d. Compensation morae
d. Only statement 2 refers to an alternative 45. The following are the requisites of an obligation, except:
obligation. a. Juridical tie
b. Consideration
For nos 37-38, use the following facts: c. Active subject
d. Object
On January 1, 2010, D and C agreed that D would deliver to C a 46. During the flood, the properties of D were saved from
specific land on July 2010. From January 1 to June 30, 2010. D destruction by C without the knowledge of D who was
harvested palay from the land worth P20,000. D actually delivered then away. C incurred necessary and useful expenses in
the land to C on September 20, 2010. At that time, crops valued at the act of saving Ds properties. For such expenses:
P15,000 that grew beginning on July 1, 2010 remained a. D is not required to reimburse C because C acted
unharvested. without Ds consent.
 b. D must reimburse C although C acted without
the consent of D.
c. D must reimburse C because there was an
implied contract between them.
d. D need not reimburse C because Cs act of
saving Ds properties is gratuitous, hence, no
compensation may be asked.
47. The creditor has the right to the fruits of the thing from
the time:
a. The things and its fruits have actually been
delivered.
b. From the perfection of the contract.
c. From the time the obligation to deliver arises.
d. The payment of the price of the thing and its
fruits has been made.
48. If there is a concurrence of two or more creditors and/or
two or more debtors in one and the same obligation, the
obligation is presumed to be:
a. Individual and collective
b. Solidary
c. Joint and several
d. Joint
49. A, B, and C are solidary debtors of X in the amount of
P60,000. A, however, was a minor at the time the
obligation was constituted. If X sues B, B will be liable to
X for:
a. P60,000
b. P40,000
c. P20,000
d. P30,000
50. A, C and C are joint debtors of W, X, Y and Z, joint
creditors, in the amount of P24,000. In this case, W can
demand:
a. P8,000 from A, P8,000 from B and P8,000 from
C.
b. P24,000 from either A, B or C
c. P2,000 from A, B and C
d. P6,000 from either A, B or C
51. When the debtor binds himself to pay as soon as he has
the means:
a. The obligation is void because payment is
dependent upon a condition that is potestative on
his part.
b. The obligation is valid, but the creditor must go
to and ask the court to fix the period for the
payment of the obligation.
c. The obligation is void because there is no
meeting of minds between the parties as to an
essential element thereof.
d. The obligation is suspended until the debtor has
the means to pay his debt.
52. D promised to give P20,000 to C provided C does not
sign a contract with X on or before December 31, 2010.
The condition of the obligation is:
a. Negative
b. Positive
c. Impossible
d. No condition exists
53. Refer to No. 190. Which of the following statements is
incorrect:
a. Ds obligation becomes demandable if it is
already January 1, 2011 and C has not yet signed
the contract with X.
b. Ds obligation becomes demandable on
December 5, 2010 if X dies on such date without
C having signed the contract with X.
c. Ds obligation is extinguished if C signs the
contract with X on or before December 31, 2010.
d. Ds obligation is extinguished if it is already
January 1, 2011 and C has not yet signed the
contract with X.
54. X is obliged to deliver his car to Y on December 31, 2013.
X loses the right to the period in all of the following
cases, EXCEPT:
a. When he becomes insolvent.
b. When he does not furnish to Y a guaranty.
c. When he violates any undertaking.
d. When he attempts to abscond.
55. D is obliged to give C a specific watch, a specific ring, or
a specific bracelet. The parties agreed that C will have the
right to choose the thing which will be given to him.
Before C could make his choice, the watch and the ring
are lost through Ds fault. What is the right of C?
a. C may choose the delivery to him of the bracelet,
or the price of the watch or price of the ring plus
damages.
b. C cannot choose the price of the watch or the
price of the ring because the said objects have
already been lost.
c. C can only choose to have the bracelet because
anyway, D can still perform his obligation.
d. None of the above.
56. A, B, C, and D are obliged to give V, W, X, Y and Z
P20,000. Which is true.
a. V may collect from A P20,000.
b. V may collect from A P5,000
c. V may collect from A P1,000
d. V may collect from A P4,000
57. A and B entered into a compromise agreement dated April
29, 2007 and approved on July 1, 2007. It states that A
will pay B the amount of P1M within one (1) year from
the execution of the agreement. What is the reckoning
point of the one (1) year period?
a. From the approval of the compromise;
b. From the receipt of the judgment based on
compromise;
c. From the date of the execution of the
compromise;
d. 15 days after receipt of the judgment.
58. A and B entered into a contract, subject to the condition
that in case the Senate will not concur in to the treaty,
neither party will be liable. The Senate rejected it. Can A
invoke force majeure or fortuitous event as a ground to
exempt himself from liability?
a. No, because it is not an act of God;
b. Yes, because of the binding effect of contracts;
c. Yes, because while the non-concurrence is
foreseeable, it is beyond their control;
d. Yes, because of the principle of liberty of
contracts.
59. A borrowed money from Metrobank and executed a
mortgage over his house and lot as security. No period
has been agreed upon on the date of payment. Before the
lapse of ten (10) years, the bank foreclosed the mortgage.
Is the bank correct?
a. Yes, because of delay in the payment of the
obligation;
b. Yes, otherwise the action to foreclose might
prescribe;
c. No, because the proper remedy is for the bank to
file an action for the fixing of the period.
d. Yes, because of the principle of solutio indebiti.
60. A lent money to B with a penalty clause providing for 6%
per month. In case a suit is filed, what do you think the
court will do with the penalty?
a. It will declare it void because it is contrary to
law;
b. It will declare it void because it is contrary to
public policy;
c. It will reduce the penalty. (Art. 1229, NCC);
 d. It will declare the penalty void as it is contrary
to morals.
61. A entered into a contract of loan with B secured by chattel
mortgage. There was a second contract of loan secured
by a real estate mortgage with the condition that the latter
will be an additional security for all obligations of A with
B. For failure to pay the first, B foreclosed the chattel
mortgage. Is the foreclosure proper?
a. No, because of objective novation;
b. No, because with the execution of the second, it
extinguished the first;
c. No, because when the second was executed, the
incompatibility extinguished the first;
d. Yes, because there was no extinctive novation as
there was no manifest incompatibility of the two
mortgages.
62. Which of the following is not correct in connection with
the requisites of rescission?
a. It must be gratuitous;
b. It must be accepted by the obligor;
c. The obligation must be demandable.
d. It can be unilateral.
63. A owes money to B evidenced by a PN payable on As
birthday. When A was celebrating his birthday, B put the
PN inside an envelope and delivered it to A. What is the
effect of Bs act?
a. Nothing as there was no intention to extinguish
the obligation;
b. Nothing as B did not state his intention to
condone the obligation;
c. The delivery of the PN implies the renunciation
of the action which B had against A;
d. Nothing as condonation must be accepted.
64. Is a stipulation in a contract of lease granting the lessee an
exclusive right to renew the contract valid?
a. No, because it is violative of the principle of
mutuality of contracts;
b. No, because validity or compliance cannot be
left to the will of only one of the parties;
c. Yes, it is fundamentally part of the consideration
in the contract.
d. No, it is contrary to law.
65. The following enumeration is correct, except:
a. Consensual contracts are perfected by mere
consent;
b. Real contracts are perfected by the delivery of
the object;
c. All contracts are perfected by mere consent;
d. Even if the lessor is obliged to deliver the thing
leased, it is still a consensual contract.
66. Consent in a contract is manifested by any of the
following acts, except:
a. Delivery of downpayment;
b. Delivery of earnest money;
c. Delivery of option money;
d. Delivery of a letter accepting the offer with
qualification.
67. The following are correct in connection with contracts of
adhesion, except:
a. Prepared by only one of the parties and the other
merely affixed his signature;
b. They are void as they are one sided;
c. They are binding as ordinary contracts;
d. Due to their peculiar nature, their validity is
determined in light of the circumstances under
which the stipulations are intended.
68. An action pauliana is an action to rescind contracts in
fraud of creditors. The following are its requisites, except:
a. Plaintiff asking for rescission has a credit prior to
the alienation although demandable later.
b. Debtor has made a subsequent contract
conveying a patrimonial benefit to a third person.
c. Creditor has no other legal remedy.
d. The third person was not a party to the fraud.
69. Which of the following is a determinate thing:
a. A cellphone.
b. A ring with diamond embellishment
c. Toyota car with engine no. 12344, body no.
39394 and plate no. abc123
d. Secossana bag
70. Demand must be made on the due date of the obligation
in order for delay to exist in one of the following cases.
Which is it?
a. When it was stipulated by the parties that
demand need not be made.
b. When the law provides that demand need not be
made.
c. When the obligation does not indicate whether
demand must be made or not on due date.
d. When time is of the essence.
Exam ends here!
Do not get tired chasing your dreams. Everything will be
worth it, in the end.
-Atty. Chelissa Mae N. Rojas, CPA