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CONTRACTS

1. A, a minor entered into a contract without the consent of her parents. In said contract A was supposed
to pay to B the sum of P10,000. B did not know of A’s minority and when A voluntarily paid B the
money, B accepted the sum. Out of this amount, B spent P8,000 for his needs. Later, the parents of A
learned of the transaction and brought an action in court to recover the P10,000 paid to B. How much
can the parents recover from B?
a. Nothing b. P10,000 c. P8,000 d. P2,000

2. A owes B P10,000 due on May 27 , 2015. A owes B P8,000 due on May 28, 2015. A obliged himself
to deliver to B a cow valued at P6,000 on May 30, 2015. On May 31, 2015, A paid B P10,000. If A
makes an application of payment,
a. The P10,000 should be applied to the first debt only
b. The P10,000 should be applied to the second debt only
c. The P10,000 should be applied either to the first debt or to the second debt
d. The P10,000 should be applied to the first debt, or to the second debt or to the third debt

3. A sold his land to B. The sale was made orally. B paid the agreed price. B wanted to have the sale
registered but he needs a public instrument. Which is correct?
a. B may sue A for the return of his money as no one shall be unjustly enriched at the expense of
another
b. B cannot demand the return of the purchase price because the sale is unenforceable`
c. B may compel A to execute the public instrument because the sale is valid.
d. B may only occupy and use the land as buyer In good faith

4. A is indebted to B for P100,000. For the purpose of defrauding B, A sold his only parcel of land to X
valued at P 100,000. X has no knowledge of the intention of A. As a result
a. The contract between A and X is binding.
b. The contract is voidable because A acted in bad faith
c. The contract between A and X rescissible
d. The right of B is to rescind the contract because it was intended to defraud him.

5. A lost in gambling and as payment executed a promissory note in favor of winner, B. Later, B assigned
the note to C. May C successfully recover from A?
a. Yes, if C is not aware that it is in payment of a gambling debt.
b. No, because B cannot recover, so also cannot the assignee.
c. Yes, because B can recover, so also the assignee can.
d. No, because promissory notes can only be negotiated but not assigned.

6. A shipped his cargo in B’s vessel. B and C entered into a contract for C to unload the cargo from the
ship’s hold. In the lifting operations, A’s cargo was damaged which is correct?
a. A may go against C and sue C for damages
b. A may go against either B or C and sue for damages
c. A may go against both B&C and sue for damages
d. A may go against both B and sue for damages

Questions 7-9 pertains to stages in the life of a contract


7. The bargaining point, that is, when the negotiation is in progress
a. Consummation b. Conception c. Death d. Birth

8. The meeting of minds regarding the object and cause of the contracts
a. Conception b. Preparation c. Death d. Birth

9. The point where the parties have performed their perspective obligations and the contract is terminated
a. Preparation b. Conception c. Perfection d. Consummation
10. A contract where the fulfilment is dependent upon the chance, so the values may vary because of the
risk or chance.
a. Commutative b. Aleatory c. Remunerative d. Gratuitous

11. A contract where the cause with respect to each contracting party is the prestation or the promise of
a thing or service by the other is
a. An onerous contract c. An innominate contract
b. A gratuitous contract d. An aleatory contract

12. A contract where one party receives no valuable consideration and the cause is the liberality of the
benefactor is
a. gratuitous contract c. An onerous contract
b. unilateral contract d. A commutative contract
13. Not a requisite for the validity of a contract
a. Consent b. Object c. Cause d. Delivery

14. Contract which cannot be ratified


a. Rescissible b. Voidable c. Unenforceable d. Void

15. Contract which has no effect at all


a. Rescissible b. Voidable c. Unenforceable d. Void

16. A contract where both contracting parties are incapable of giving consent is
a. Void b. Rescissible c. Unenforceable d. Voidable

17. An absolutely simulated or fictitious contract is


a. Void b. Voidable c. Rescissible d. Unenforceable

18. Not a characteristic of contract


a. Consensuality of contract c. Mutuality of contract
b. Simplicity of contract d. Relativity of contract

19. Contracts are generally effective only between the parties, their assigns and their heirs
a. Consensuality of contract c. Mutuality of contract
b. Simplicity of contract d. Relativity of contract

20. The contract must bind both contracting parties


a. Consensuality of contract c. Mutuality of contract
b. Simplicity of contract d. Relativity of contract

21. When there is concurrence of offer and acceptance, there is


a. Payment b. Consignation c. Consent d. Tender of payment

22. A is the guardian of B, a minor. B sold his land in writing to C valued at P1M for P.7M. The cause
of the contract is
a. Rescissible b. Voidable c. Unenforceable d. Void

23. A delivered his car to B for the latter’s use for one week without any compensation. The cause of the
contract is
a. The car of A c. The period of one week
b. The generosity of A d. The delivery of the car

24. A delivered hi bracelet to B for B’s necklace. No written agreement was signed by the parties. Which
of the following is appropriate description of the contract between A and B?
a. Onerous and bilateral c. Bilateral and innominate
b. Onerous and innominate d. Aleatory and nominate

25. The following instances will render an offer ineffective before acceptance is conveyed. Which one
will not? When one of the parties
a. Is civilly interdicted c. Becomes insane
b. Becomes insolvent d. Is placed under a hypnotic spell

26. D forced C to sign a promissory note where C promises to pay D P100, 000. The correct amount
should be P60, 000. Which is correct?
a. The contract is rescissible because there is lesion
b. The contract is unenforceable
c. D cannot demand payment from C because the contract is voidable
d. The contract is valid

27. If one party was mistaken and the other acted fraudulently or inequitably in such a way that the
instrument does not show their true intention, which one of the following is correct?
a. The former may ask for reformation
b. The latter may ask for reformation
c. Either the former or the latter may ask for reformation
d. The former may ask for annulment

28. A, desiring to buy certain property, hired an expert to ascertain its true value. But the expert’s opinion
turned out to be wrong and A was therefore misled May A ask for annulment of the contract?
a. Yes, because the opinion was made by an expert
b. No, a mere expression of an opinion does not signify fraud
c. No, because A’s own expert committed the error
d. Yes, A had relied on the expert’s special knowledge

29. Although validity agreed upon, courts can nullify this contract because of damage to one of the parties
or to a third person and its enforcement may cause injustice by reason of some external facts
a. Rescissible contracts c. Unenforceable contract
b. Voidable contract d. Void contract

30. A clause providing that the mortgagee will automatically own the property mortgaged if the debt is
not paid at maturity is
a. Dacion en pago b. Payment by cession c. Pactum commissorium d. Upset price

31. A specific amount below which the mortgaged property is not supposed to be at the execution sale
a. Dacion en pago b. Payment by cession c. Pactum commissorium d. Upset price

32. Pactum commissorrium and upset price are both


a. Rescissible b. Voidable c. Unenforceable d. Void

33. A wrong committed independent of contract and without criminal intent


a. Culpa aquiliana c. Quasi –contract
b. Delict d. Culpa contractual

34. If mistake, fraud, accident or inequitable conduct has prevented a meeting of the minds of the parties
to a contract, the proper remedy is
a. Ratify the contract c. Annulment of the contract
b. Ask for specific performance d. Reformation of the contract

35. The following are some accidental elements of a contract of sale, except
a. Terms of payment c. Place of payment
b. Interest rate d. Accession and Accessories

36. A stipulation in favour of a third person


a. Stipulation pour autrui c. Assignment of credit
b. Stipulation pour over d. Pactum commissorium

37. The following contracts are not perfected until the delivery of the object of the obligations, except
a. Pledge b. Deposit c. Commodatum d. Sale

38. Pledge, deposit and commodatum are


a. Consensual contracts b. Real contracts c. Solemn contracts d. Formal contracts

39. A contract to make deposit, to make a pledger or to make a commodatum is


a. Consensual contracts b. Real contracts c. Solemn contracts d. Formal contracts

40. Acceptance of an offer made by a letter or telegram shall bind the offer or from the time the
a. Offeree accepted the offer c. Acceptance came to the knowledge of the offeror
b. Offeree sent his letter or telegram d. Offeror made the offer

41. A contract where consent is given through mistake, violence, intimidation, undue influence or fraud
is
a. Rescissible b. Voidable c. Unenforceable d. Void

42. When in order to wrest consent, serious or irresistible force is employed, there is
a. Violence b. Mistake c. Intimidation d. Fraud

43. 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 b. Mistake c. Intimidation d. Undue
Influence

44. 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, there is
a. Fraud b. Mistake c. Intimidation d. Undue Influence

45. I. Failure to disclose facts, when there is duty to reveal them constitutes fraud
II. The usual exaggerations in trade, when the other party had an opportunity to know the facts, are not
themselves fraudulent
a. True, true b. True, false c. False, true d. False, false
46. A contract with a cause distinct from the selling price is
a. Lesion b. Cession c. Dation d. Option

47. The inadequacy of cause, like an insufficient price for a thing sold
a. Lesion b. Cession c. Dation d. Option

48. Where reformation is allowed


a. Simple donation inter-vivos wherein no condition is imposed c. Wills
b. Contract of mortgage fraudulently made as a contract of sale d. When the real agreement
is void

49. The process of intentionally deceiving others by producing the appearance of a contract that really
does not exist
a. Absolute simulation b. Relative simulation c. Fraud d. Misrepresentation
50. The process of intentionally deceiving others by producing the appearance of a contract which is
different from the true agreement
a. Absolute simulation b. Relative simulation c. Fraud d.
Misrepresentation

51. A contract in writing for the sale of movable property between a minor and an insane person is
a. Void b. Voidable c. Rescissible d. Unenforceable

52. I. Unless the contrary appears, advertisement for bidders are simply invitations to make proposals, and the
advertiser is not bound to accept the lowest or highest bid.
II. Contracts agreed to in a state of drunkenness or during a hypnotic spell are void.
a. True, true b. True, false c. False, true d. False, false
53. This will cure the defect of an unenforceable contract
a. Acknowledgement b. Confirmation c. Ratification d. Referendum

54. The mortgagor will execute an instrument to transfer the ownership over the property mortgaged to
the mortgagee if the debt is not paid at maturity is
a. Void b. Voidable c. Valid d. Unenforceable

55. Sometimes referred to as condition precedent


a. Casual condition b. Potestative condition c. Suspensive condition d.
Resolutory condition

56. Also known as condition subsequent


a. Casual condition b. Postestative condition c. Suspensive condition d.
Resolutory condition

57. A owes B P10, 000 payable as soon as A has the money to pay B. This is
a. A conditional obligation c. A suspensive condition
b. An obligation with a period d. A potestative condition

58. Solidarity on the part of the obliges


a. Active solidarity b. Passive solidarity c. Mixed solidarity d.Casual solidarity

59. A was indebted to B bank. Later C, employee of A, offered to settle the obligation according to the terms
specified by him. The bank accepted the offer. The acceptance by the bank of the offer of C under the
term specified by him constitutes
a. A compensation b. A confusion c. Condition d. Novation

60. An obligation with a period, except


a. As soon as I have money c. As soon as possible
b. In partial payments d. Until the defendant shall have obtained a loan from the bank

61. A, B and C borrowed P24, 000 from Y and Z and signed a promissory note dated January 30, 2011, and
due within six months. How much can Y collect from A (debtors are solidary while creditors are joint),
on due date
a. P12, 000 b. P4, 000 c. P8, 000 d. P24, 000

62. A obliged himself to give B a car if B places among the top ten in the CPA Board Exam. Subsequently,
they agreed that A will give B the car if B merely passes the CPA Board. This is example of.
a. Mixed novation b. Real novation c. Implied novation d. Personal
novation

63. A law, to aid in human memory, or to prevent injustice due to faulty memory, which requires that
certain contracts must be in writing otherwise unenforceable
a. Pactum comissorium b. Statute of limitation c. Law on sales d. Statute of frauds

64. Characteristic of void contracts, except


a. Defense of illegality cannot be waived c. Action for declaration of inexistence does not
prescribed
b. Cannot be ratified d. The inexistence can be assailed by third person

65. Which of the following constitutes a definite offer


a. An offer made through an agent c. Business advertisement of things for sale
b. Advertisement for bidders d. Newspapers advertisements for employment

66. G was appointed as guardian of M, the latter being 17 years old. Later, without authority from G, M
sold G’s watch in writing to B valued at P100, 000 for P70, 000. Suffering lesion by more than ¼ of the
value, the contract is
a. Rescissible b. Voidable c. Unenforceable d. Void

67. Unless ratified, suits will not prosper if the contract is


a. Rescissible b. Voidable c. Unenforceable d. Void

68. The obligation is demandable on the date of the obligation and shall continue to be in force up to the
arrival of the day certain:
a. Resolutory period b. Suspensive period c. Indefinite period d. Legal
period

69. A, B and C secured a loan from D. The promissory note which evidences the obligation states: “I
promise to pay D or order P10, 000 payable on demand” (Sgd) A B C. The obligation is
a. Solidary b. Divisible c. Indivisible d. Joint

70. X obliged himself to pay Y the amount of P30,000 30 days after January 31, 2015 plus a penalty of
P3, 000 if he fails to pay the obligation on due date. After demand for payment by Y, X offered to pay
on June 30, 2015. Y can demand from X:
a. P30, 000 plus P3, 000 plus legal interest c. P30, 000 plus P3, 000
b. P30, 000 plus legal interest d. P 30, 000 plus P3, 000 plus legal interest plus damages

71. One is not a requisite needed in order that obligation shall be extinguished by loss or destruction of
the thing due:
a. When the thing is lost without the fault of the debtor
b. When the thing lost is generic
c. When the thing is lost before the debtor has incurred in delay
d. When the thing lost is specific.

72. In 2012, A, 17 years old sold his ring to B of legal age payable in 3 equal annual payments. B paid
in 2012, 2013 and 2014 agreed upon. In 2015
a. A can ask for annulment c. The contract is without defect
b. A can ask for annulment d. Either A or B can ask for annulment

73. The following contracts are valid, except


a. A contract where a party gave his consent while in a state of drunkenness
b. A contract where a party gave his consent because the other party threatened to sue him for an unpaid
debt
c. A contract where A gave his consent because B threatened to kill A’s spouse
d. A contract where the wife sells her property to her husband because of intimidation

74. The following statements pertain to the cause of a contract. Which statement refers to motive?
a. It is the essential reason of a contract
b. It is always known to the contracting parties
c. Its illegality does not affect the validity of the contract
d. There will be no contract without it

75. A and B executed a contract on January 12, 2015 where A agreed to sell and B agreed to buy A’s
only fighting cock. The agreement provides that the delivery of the cock is to be made on June 24, 2015
at which time B would pay the agreement price of P2,000. On June 9, 2015, A sold the same fighting
cock to C. B asks for your advice, assuming there is no delivery yet of the cock to C.
Advice B may sue for damages, on June 9, 2015 without the need of demanding delivery because it is useless,
the object was sold to a third person acting in good faith .
Advice B may sue for damages after the arrival of the stipulated period, that is June 24, 2015 because the right
of B to sue will only accrue on June 24, 2015/
a. Both advice are correct c. First is correct, second is wrong
b. Both advice are wrong d. First is wrong, second is correct

76. A offered to sell her watch to B for P1,000, B offered to buy the watch for P800 but it was rejected
by A. When B turned to go away. A called him and said she is now willing to sell the watch for P800.
May B refuse to buy said watch?
a. No, because B’s offer of P800 was accepted by A.
b. No, there is a meeting of the minds between the parties or the subject matter and the cause of the
contract
c. Yes, because B made a counter offer which was rejected by A
d. Yes, because the agreement is under the statute of frauds.

77. A offered to sell his house and lot to B for P2,000,000, who was interested in buying the same. In his
letter, A stated that he was giving B a period of one month within which to raise the amount. One week
before the expiration of the one-month period. A told B that he is no longer willing to sell the property
unless the price is increased to P3,000,000. May B compel A to accept the P2M first offered?
a. Yes, because this is an obligation with a period and a period is deemed for the benefit of both parties.
b. Yes, because the period is deemed for the benefit of B as it was A who voluntarily offered the period
to B.
c. No, because the promise to sell had no cause or consideration distinct from the selling price
d. No, because the increase in the price is 50% and is deemed unconscionable

78. A leased his property to B. Part of the premises was subleased by B to C. B violated the conditions
of the lease, so A wanted to rescind the lease contract. Which is correct?
a. A can rescind the lease contract provided he respects the sublease
b. A cannit rescind the lease contract as the sublease would naturally be affected
c. A cannot rescind the lease contract and is not bound to respect the sublease
d. B may object to the cancellation of the contract because he is not a party to the violation

79. An employee embezzled a sum of money from her employer, and in order that she would not be
prosecuted, her husband signed a promissory note to pay the amount embezzled, with interest to the
victim, which is correct?
a. The husband is liable because the note was executed by the husband voluntarily
b. The recovery shall be limited only to the amount embezzled without any interest
c. The employer may recover from the husband of the employee and may still prosecute the employee
d. No recovery can be made on the note because the consideration is illicit

80. A and B agreed on a certain contract, but A fraudulently fraud made a document reciting another
kind of contract. Later both A and B died. Which is correct?
a. Only the son of A may bring action to reform the instrument
b. Only the son of B may bring action to reform the instrument
c. Either the son of A or the son of B may bring an action to reform the instrument
d. Neither the son of A nor the son of B may bring an action to reform the instrument

81. In a contract of sale of a hardware store (construction materials) it was stipulated that the seller shall
not open or have any interest directly or indirectly in any hardware store either in his own name or in the
name of another or have connection with or be employed in any hardware store for a period of one year
or within three kilometres from Barangay Ginebra, San Miguel, Bulacan. Are these stipulations/
restrictions upon the seller valid?
a. No, the agreement is contrary to the public policy as the seller is deprived of a means of livelihood
b. No, the stipulations are in restraint of trade
c. Yes, the restrictions imposed are only on a limited scale
d. Yes, as long as the agreement is made in writing

82. A insured his residential house for P5M on January 1, 2015. On June 30, 2015 B burned the insured
property. Which is not correct?
a. A can proceed against the insurer and collect the P5M policy
b. The insurer shall be subrogated to the rights of A after payment to A
c. After payment the insurer shall have the right to proceed against B
d. A should proceed against B, the guilty party and not against the insurer

83. A bought a house and lot in a subdivision subject to the condition that they shall be used for residential
purposes only. The condition was annotated in the certificate of title. Ten years later, A sold the property
to B who converted same into a restaurant. The owner of the subdivision demanded the closure of the
restaurant but B refuses on the ground that the lot became commercial because of its proximity to some
stores and a shopping center in an adjoining subdivision. Furthermore, the lot has been reclassified into
the commercial by an ordinance passed by the City Council. Which is correct?
a. B cannot convert the lot into a commercial lot because of the restriction on the certificate of title
b. The stipulation between the owner of the subdivision and A is valid and shall bind B
c. B should first ask for the cancellation of the annotation on his certificate of title prohibiting the use of
the lot for the purposes other than residential
d. The stipulation that the lot shall be used exclusively for residential purposes becomes ineffective
because of the conversion of the land into commercial by ordinance as a valid exercise of the police
power of the state.

84. A sold to B his cow for P5,000. No date is fixed by the parties for the performance of their respective
obligations. The obligation of A is
a. To deliver the cow immediately as there is a perfected contract
b. to deliver the cow within the reasonable time from the perfection of the contract
c. to deliver the cow upon the payment by B of P5,000
d. to rescind the contract as there is no time fixed for the delivery and payment

85. The following contracts must be in writing, except


a. Donations of personal property where the value is Php 5,000 or more
b. Authority of the agent to sell a piece of land or any interest therein
c. Agreement to pay the interest in a contract of loan
d. Contract of antichresis

86. Which of the following stipulations is valid?


a. A stipulation where the mortgagee or pledgee will automatically owned the property mortgaged or
pledged in case the mortgagor or pledgor fails to pay the loan
b. A stipulator forbidding the owner from alienating the immovable mortgaged
c. A stipulation made in consideration of marriage other than mutual promise to marry
d. A stipulation which excludes one or more partners from any share in the profits or loss

87. They refer to the elements that may be stipulated by the contracting parties
a. Accidental elements c. Moral elements
b. Natural elements d. Artificial elements

88. They are the elements that are found in certain contracts and are presumed to exist unless set aside
by the parties
a. Accidental elements c. Artificial elements
b. Natural elements d. Incidental elements

89. The conception of a contract is


a. There is a meeting of minds c. When the contract is executed
b. When negotiations are in progress d. When the parties come to an agreement

90. The principle that contracting parties may establish such stipulations, clauses, terms and conditions
as they may deem convenient, provided they are not contrary to law, moral, public policy and public
order, refer to the principle of
a. Liberty of contract c. Consensuality of contract
b. Relativity of contract d. Mutuality of contract

91. Not a requisite of stipulation pour autrui


a. The contracting parties must have clearly and deliberately conferred a favour upon the third person
b. The stipulation must be part of the contract
c. The third person communicated his acceptance to the obligor before it revocation
d. There must be an agency between either of the parties and the third person

92. One is not a rescissible contract


a. Those undertaken in fraud of creditors when the latter cannot in any other matter collect the claims
due them
b. Those which are entered into by guardians wherever the wards whom they represent suffer lesion by
more than ¼ of the value of the things which are the object thereof
c. Those agreed upon in representation of absences, if the latter suffer a lesion more than ¼ of the value
of the project of the contract
d. Those where one of the parties is incapable of giving consent to a contract

93. Which of the following need not to be in writing to be enforceable?


a. An agreement for the sale of goods, chattels, or things in action at a price not less than P500
b. An agreement for the leasing for a period longer than one year, or for the sale of real property or of an
interest thereon
c. A representation as to the credit of a third person
d. A mutual promise to marry

94. To be enforceable, the following contracts are required to be in writing, except


a. A special promise to answer for the debt, default or miscarriage of another
b. An agreement that by its terms is not to be performed within a year from the making thereof
c. An agreement made in consideration of marriage other than a mutual promise to marry
d. A contract of loan

95. Which of the following contracts is voidable?


a. Those were both parties are incapable of giving consent to a contract
b. Those do not comply with the Statute of Frauds
c. Those entered into the name of another person by one who has been given no authority or legal
representation or who has acted beyond his powers
d. Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud

96. Which of the following is enforceable?


a. Oral sale of immovable property for a price of P400
b. Oral sale of immovable property for a price of P10,000
c. Oral contract of loan for P1,000
d. Oral agreement made in consideration of marriage

97. A, B and C are jointly liable to D in the amount of P9,000. D assigns the entire credit to A. In this
case
a. The obligation is extinguished because of confusion
b. B and C will not be liable to A
c. A becomes the new creditor and may demand from B and C P4,500 each
d. A’s share in the obligation is extinguished because of confusion

98. One of the following is not correct in joint obligations


a. There are as many debts as there are debtors
b. There are as many credits as there as creditors
c. The debts and/ or credits are considered distinct and separate from one another
d. The insolvency of one of the debtor shall make the other debtors liable

99. If a third person pays for the debtor with the consent of the debtor, he
a. Can recover only in so far as the payment has been beneficial to the debtor
b. Can recover the amount he has paid but he shall not acquire the rights of the debtor
c. Can recover the amount he has paid or the payment that has benefited the debtor whichever is lower
d. Can recover the amount he has paid and he shall acquire the rights of the creditor such as those arising
from a mortgage, guaranty or penalty

100. A is indebted to B with C as guarantor. B assigns the credit to D., who in turn assigns the credit to
C. Which is correct?
a. The obligation of A is extinguished
b. The assignment to C did not affect the obligations of C as guarantor
c. The assignment by B to D extinguished the guaranty
d. C becomes the new creditor of A

101. A obtained from B a loan for P1,500 with the interest of 10% per annum, the payment of which loan
was secured by a guaranty secured by C. After the maturity of the loan, D a friend of A went to B and
paid the latter, without the knowledge of A, P1,400 for said loan and thereupon B signed and delivered
to D a receipt of this tenor “Receivable from D P1,400 in full payment of A’s obligation in my favor.
Sgd. B”. Which is correct?
a. D may recover from A the amount of obligation, that is P1,500, because A was benefited up to P1500
b. D may recover from A P1,500 plus interest
c. D may recover from A P1,400 plus interest
d. D may recover from A P1,400 without interest

102. Using the preceding number, in case A has nothing with which to pay. D may exact from the
guarantor.
a. P1,500 b. P1,400 c. P1,400 plus interest d. Nothing

103. A was supposed to pay B P10,000 on June 30, 2015. Believing that the obligation was due and
demandable already on June 30, 2014, A paid B the P10,000 on said date. How much A may recover
from B on December 31, 2014?
a. P10,000 without interest because A voluntarily paid his obligation
b. None, because A voluntarily paid his obligation
c. P5,000 because ½ year has elapsed after A effected payment
d. P10,000 plus interest because when A effected payment he was unaware of the period

104. If one debt is P12,000 and the other is P6,000 and the debtor without making any application or
payment gives P3,000., how should said payment be applied, presuming that both debts are of the same
nature and burden?
a. The payment will be applied to the P12,000 debt c. The payment will be applied
equally
c. The payment will be applied to the P6,000 debt d. The payment will be applied
proportionately

105. Rescission of contract can take place


a. When the things which are the object of the contract are legally in the possession of third persons who
acted in good faith
b. When the party seeking rescission can perform only as to part and rescind as to another
c. When the seller cannot return the instalment paid to him by the buyer
d. When he who demands rescission can return whatever he may be obliged to restore

106. In order that fraud may make a contract voidable:


a. It may be incidental but both parties should not be in pari delicto
b. . It may be serious and the parties must be in pari delicto
c. . It may be incidental but should have been employed by both parties
d. . It should be serious and should have not have been employed by both contracting parties.

107. A, the father of B, was indebted to C in the amount of P1M. A died without paying the indebtedness
B inherited from A properties worth only P400,000. B paid C the amount of P1M one month after A’s
death. Can B ask for the refund of what he paid to C?
a. Yes, but only up to P600,000
b. Yes, but only up to P400,000
c. No, the obligation of the father is also the obligation of the heirs under the principle of relativity of
contracts.
d. No, because the heir voluntarily paid the debt of the decedent

108. One of the stipulations contained in the contracts between a company and its employees is that the
company shall pay a bonus to any employee of the company who shall continue their employment for at
least two consecutive years unless he quits or is discharged before the expiration of the period of two
years. X, an employee of the company was discharged one week before the completion of the two year
period
(1) If X discharged with just cause, he is nevertheless entitled to the bonus because when the company
voluntarily impedes the performance of the condition, it will be deemed performed.
(2) If X discharged without just cause, he is entitled to the bonus because when the debtor voluntarily
prevents the performance of the condition, it is deemed fulfilled.
a. true, true b. true, false c. false, true d. false,
false

SALES

1. Dacion en pago as distinguished from a contract of sale


a. There is greater freedom in fixing the price
b. Obligations are created
c. Ownership of the object is transferred to the other party
d. A pre-existing credit is extinguished

2. As a rule, this contract of sale involving a piece of land is void,


a. Between a minor and a deaf mute who does not know how to write
b. Between two insane persons who did not act during lucid interval
c. Between first degree cousins
d. Between husband and wife

3. One of the following is not correct


a. Things subject to a resolutory condition may be the object of the contract of sale
b. A thing is generic when it is particularly designated or physically segregated from all others of the same
class.
c. Things having potential existence may be the object of the contract of sale
d. The sole owner of a thing may sell an undivided interest therein

4. A needs a size 10 of model 101 of Delicious Shoes regularly available to the public for her boyfriend B,
but the same is out of stock so she placed an order for one. On the other hand, B placed an order for size
No. 8, colored violet, (something not ordinarily made by the company) to the given to A. Which is
correct?
a. Both are contracts of sale
b. Both are contracts for a piece of work
c. First is a contract of sale, second is a contract for a piece of work
d. First is a contract for a piece of work, second is a contract of sale

5. A offered to sell for P12,000,000 her house and lot to B who was interested in buying the same. In her
letter to B, A stated that she is giving B a period of one month within which to raise the amount and that
as soon as B is steady, they will sign the deed of sale. Five days before the expiration of the one month
period. A went to B and told her that she is no longer willing to sell the property unless the price is
increased to P15,000,000. Which is correct?
a. B may compel A to accept the P12,000,000 first offered
b. A may compel B to pay P15,000,000
c. A and B should shoulder the P3,000,000 difference
d. B cannot compel A to accept the P12,000,000 first offered

6. A, 17 years old , sold to B, of legal age, her necklace worth P20,000 for P15,000. Later, B sold the
necklace to C for P20,000. Which of the following statements is correct?
a. A has got a voidable title because at the same time, she is a minor
b. A can ask for rescission of the sale to C because she suffered a lesion of more than ¼ of the value of the
property
c. If C is in bad faith, C becomes the owner of the necklace upon delivery to him but his title is voidable
d. A can ask for annulment of the sale to C because at the time of sale she is a minor

7. Goods are deemed in transit


a. When the buyer accepts delivery of the goods upon arrival at destination
b. When the buyer intercepts and lawfully take possession of the goods any point before destination
c. From the time they are delivered by the seller to a common carrier or other bailee for transmission to the
buyer, up to the time that the buyer or his agent takes delivery of the goods from the carrier or bailee
d. When the carrier or bailee, upon arrival of the goods at destination acknowledges to the buyer or his
agent that he is holding the goods as bailee for the letter
8. Goods are deemed no longer in transit
a. If the goods are rejected by the buyer for a valid reason and the carrier or other bailee continues in
possession of them, even if the seller has refused to receive them back
b. From the time they are delivered to a carrier by land, water or air for the purpose of transmission to the
buyer
c. From the time they are delivered to a bailee for the purpose of transmission to the buyer until the buyer
or his agent in that behalf, takes delivery of them from such bailee
d. If the carrier or other bailee wrongfully refuses to deliver the goods to the buyer or his agent in that behalf

9. A sold to B orally a parcel of land for P200,000. A effected the delivery of the land. The payment of the
price was made three months later. At the end of the three month period
a. B may refuse to pay claiming in his defense the Statute of Frauds
b. B may return the parcel of land to A
c. A can collect from B because the contract as already been executed
d. B may refuse to pay on the ground that there is no written contract to support the sale
10. On January 10, 2015, A sold for P2M her house and lot to B. It was agreed that delivery of the house and
lot, and the payment therefore, would be made on March 1, 2015. Unfortunately, C a stranger negligently
set the house on fire on February 25, 2015, and the house was completely destroyed. Which is correct?
a. B is not required to pay the P2M since the contract had no subject matter
b. A must still deliver the lot but is excused from delivering the house, while B must pay the P2M
c. A must deliver the lot while B should pay only the amount equivalent to the value of the lot
d. A need not deliver the lot while B need not to pay the P2M

11. If immovable property should have been sold to different vendees, the ownership shall be transferred to
the person
a. Who have first taken possession in good faith
b. Who presents the oldest title in good faith
c. Who in good faith first recorded it in the Registry of Property
d. Who have paid in good faith the purchase price in full.

12. Using the preceding number, if movable property, it shall belong to the person
a. Who have paid in good the purchase price in full
b. Who in good faith first recorded it in the Registry of Property
c. Who presents the oldest title in good faith
d. Who have first taken possession in good faith

13. Action by the vendee against the vendor to nullify the sale due to some vices or defects which render
the object of sale unfit for the use intended or knowledge of which, the vendee would not have bought
the thing
a. Accion quanti minoris b. Accion reinvidicatoria c. Accion pauliana d. Redhibilitory action

14. Action to seek a corresponding reduction in price by reason some vices or defects in the thing purchased
a. Accion quanti minoris b. Accion reinvidicatoria c. Accion pauliana d. Redhibilitory action

15. The redhibitory action based on the faults or defects of animals must be brought within
a. 30 days from delivery to the vendee c. 40 days from delivery to the vendee
b. 40 days from delivery to the vendee d. 6 months from delivery to the vendee

16. This serves as proof of the perfection of the contract of sale


a. Dacion en pago b. Option money c. Delivery d. Arras

17. A contract of sale is not a(an)


a. Onerous contract b. accessory contract c. commutative contract d.Bilateral contract

18. Emptio spei as distinguished from emptio rei speratae


a. Sale of a future thing c. Its quantity and quality are unknown
b. Should come into existence d. Sale of a present thing

19. The sale of an expected thing


a. Dacion en pago b. Payment by cession c.Emptio spei d. Emptio rei-speratae

20. The sale of the hope itself


a. Dacion en pago b. Payment by cession c.Emptio spei d. Emptio rei-speratae

21. In contract of sale, if the price is absolutely simulated, the sale is


a. Unenforceable b. Voidable c. Void d. Rescissible

22. This is not an essential element of a contract of sale


a. Subject matter which should be determinate
b. Consent of the contracting parties
c. Warranty against eviction
d. Consideration which is certain in money or its equivalent

23. When a sale of a piece of a land or any interest therein is through an agent, the authority of the agent
shall be in writing, otherwise the sale is
a. Valid b. Voidable c. unenforceable d. void

24. A contract of sale is not


a. A consensual contract c. A reciprocal contract
b. A real contract d. An onerous and commutative contract

25. Not an implied warranty in a contract of sale


a. Right to sell the thing at the time of perfection of the contract
b. Reasonably fit for the purposed they are required
c. Merchantable in quality
d. Free from charges or encumbrances not declared or known to the buyer

26. Which of the following cannot be an object of a contract of sale?


a. Sale of credit
b. Young of animal not yet conceived at the time of perfection
c. Land which the seller expects to buy
d. Future inheritance

27. Delivery by merely pointing to the subject of sale if it cannot be delivered to the vendee at the time of
sale so that sale is
a. Traditio longa manu c. Traditio constitutum possesorium
b. Traditio brevi manu d. Tradito symbolica

28. Effected when the object of sale is already in the possession of the vendee at the time of sale so that
delivery need no longer to be made is
a. Traditio longa manu c. Traditio constitutum possesorium
b. Traditio brevi manu d. Tradito symbolica
29. When the owner of the thing sells it to vendee, but continues to have possession or occupation of the
thing not as owner but as tenant or lessee.
a. Traditio longa manu c. Traditio constitutum possesorium
b. Traditio brevi manu d. Tradito symbolica
30. Quasi-traditio is equivalent to
a. Traditio longa manu c. Traditio constitutum possesorium
b. Traditio brevi manu d. Tradito symbolica

For items 31-34


31. If the object of the contract is specially made or manufactured at the specific order of another, it is a
contract for a piece of work. This is
a. English rule b. Massachusetts rule c. New York rule d. Chicago rule

32. If the article already exists and subsequently acquired by another, it is a contract of sale, and if the article
is still to be manufactured at the instance of another, it is a contract for a piece of work. This is
a. English rule b. Massachusetts rule c. New York rule d. Chicago rule

33. If the material used in the manufacturer of the article is more valuable, it is a contract of sale, and if the
labor or skill is more valuable than the material used in the manufacturer of the article, it is a contract for
piece of work. This is
a. English rule b. Massachusetts rule c. New York rule d. Chicago rule
34. The rule observed in the Philippines is
a. English rule b. Massachusetts rule c. New York rule d. Chicago rule

35. Warranty against hidden defects is


a. An essential element b. A natural element c. An accidental element d. An artificial element

36. The Realty Instalment Buyer Protection Act applies to all transactions involving the sale or financing of
real estate on instalment but it excludes the following except
a. Sale or financing of industrial lots c. Sale to tenants under the Land Reform Code
b. Sale or financing of commercial building d. Sale of residential condominiums

37. In a contract of sale of personal property, the price of which is payable in instalments, the vendor may
exercise any of the following remedies, except
a. Exact fulfilment of the obligation, should the vendee fail to pay any instalment
b. Cancel the sale, should the vendee’s failure to pay cover two or more instalments
c. Foreclose the chattel mortgage on the thing sold, if one has been constituted should the vendee’s failure
to pay cover two or more instalments
d. Rescind the sale should the vendee fail to pay any instalment

38. The right of the seller to stop goods in transit, upon discovering that the buyer does not have the funds
to pay for the goods
a. Pre-emptive right b. Appraisal right c. Voting right d. right of stoppage in
transit

39. A sold to B a parcel of land for P3.8M. The sale is evidenced by a memorandum of agreement of sale
written in the Bicolano dialect. One week later, A sold the same parcel of land to C for P4M. This is
evidenced by a formal deed of sale. Upon buying the property, C, who was aware of the first sale,
immediately took possession of the lot. When informed of the second sale, B subsequently registered an
adverse claim to the property. Later, C registered the deed of sale in her favor. The parcel of land shall
belong to
a. B because he has got an older title c. C because he is the first to take possession
b. C because he is the first to register d. No one as both sales are void

40. Voluntary renunciation made by the buyer of his right to warranty against eviction where in case the
buyer evicted, the seller is liable to the value of the thing at the time of eviction.
a. Waiver intentionada b. Waiver consciente c. Waiver cursunada d. Waiver inocente

41. Using the preceding number , where the seller is no longer liable
a. Waiver intentionada b. Waiver consciente c. Waiver cursunada d. Waiver inocente

42. A contract of sale whereby the seller acquires the right to redeem or repurchase the object of the sale
from the buyer within a certain period agreed upon
a. Equitable mortgage b. Absolute sale c. On sale or return d. Pacto de recto sale

43. A sold to B his car and promised to deliver ten days later. The next day, after the sale to B, A sold the
same car to C and immediately effected delivery. On the day agreed upon, A did not deliver the car to B.
Which is correct?
a. B can cancel the contract between A and C, because the contract between A and B was perfected ahead
of the contract between A and C
b. B should make a demand to make A in default
c. A is liable to B for the value of the car plus damages after B makes a demand
d. A is liable to B for damages and is in default without need of any demand

44. A sold to B her Yamaha organ. It was agreed that A would fix the price a week later. At the agreed time,
A named the price P10,000. Was the sale perfected?
a. No, because the price was left to the discretion of one of the contracting parties
b. No, because at the time of sale the price was not fixed
c. Yes, because the price fix by one of the parties was accepted by the other
d. Yes, because there was agreement that A would fix the price

45. After the death of C, A, C’s son, sold his inheritance though its amount has not yet been determined to
B for a consideration of P1M. Which is correct?
a. The contract is valid if the value of inheritance is at least equal to P1M
b. The contract is valid even though the inheritance to be turned over to B is less than P1M
c. The contract is void as future inheritance cannot be the object of sale
d. The contract is unenforceable

46. A stole a fountain pen from P and sold it to B Merchandise, a “store to pens”, which paid for it in good
faith, not knowing it was stolen. The “store” then sold it to B, a reviewee. Which is correct?
a. C cannot be considered as the owner because the original seller (A) is not the real owner
b. P may recover the fountain pen from C without reimbursement because he is the legal owner
c. C became the owner because he purchased the pen from a merchant store
d. C became the owner regardless of whether the seller is a store for pens or not because C bought the house
it in good faith

47. When goods are delivered to the buyer on “sale or return” for period of seven days, ownership of the
goods passes to the buyer
a. Upon perfection of the contract
b. Upon acceptance by the buyer of the offer of the seller
c. Upon expiration of seven days
d. Upon delivery of the goods

48. B imported radios from Taiwan and asked for 220 volts radios. The radios arrived clearly labelled 220
volts and B sold them to the public as such. Later the customer complained that the radios have been
mislabelled by the manufacturer and that they were good only for 110 volts. As a consequence
a. B is liable to the vendees for any hidden defects even though he is not aware
b. B is not liable because he is in good faith
c. B is not liable under the principle of “caveat emptor” or let the buyer beware
d. The vendees may hold the manufacturer liable but not B because B specifically asked for 220 volts

49. If redemption is to be made by the seller, one of the following need no to be given to the buyer
a. Expenses of the contract c. Necessary expenses on the thing sold
b. Interest on the price of the sale d. Price of the sale

50. Not an element of the sellers right of stoppage in transit


a. The good must be in transit c. The seller must be in possession of the goods
b. The buyer must be insolvent d. the seller must be unpaid

51. A sold his only car to B for P300,000 to be paid as follows: P150,000 upon delivery of the car to B and
the balance at P10,000 per month until full payment of the purchase price. Later the car gets burned in
the possession of B through fortuitous event and without B’s fault, before full payment of the balance. Is
B obliged to pay the balance?
a. No, because the car was lost through the fortuitous event and without B’s fault, hence B’s obligation is
extinguished
b. No, because the loss should be borne by the seller as this an instalment sale so until the buyer pays the
full amount of the price of the sale, A remains to be the owner
c. Yes, but A must give another car to B because of the principle “genus nunquam peruit” or generic thing
never perishes
d. Yes, because of the principle “res perit domino” or the thing perishes with the owner
52. A, B, and C are co-owners of an undivided parcel of land, sold his 1/3 interest to B absolutely. Which is
correct?
a. C may exercise his right of redemption on the interest sold by A to B
b. C cannot exercise the right of redemption because the sale was made in favor of a co-owner
c. The sale made by A to B is void because it was not made in favor of a stranger
d. C may redeem only ½ of the interest sold by A to B

53. Using the preceding number, Suppose, instead of selling his interest to B, A sold it to D, who can exercise
the right of redemption?
a. Both B and C b. B but not C c. C but not B d. A, B and C

54. A offered for sale to B 20 cavans of wagwag rice and fixed the price per cavan at P10 over the price
offered at Y’s store in Quinta Market. The price is
a. Not certain because the price at Quinta Market is not stated
b. Certain because it has got reference to another thing which is certain
c. Certain because there is a price ceiling for price of rice
d. Not certain so the court may fix the price

55. A sold his motor vehicle to B who bought it for P200,000. It turned out however, that A has two motor
vehicles: Toyota valued at P230,000 and Lancer valued at P220,000. Which is correct?
a. There is no contract of sale between A and B
b. The parties may ask for interpretation or reformation
c. The parties can ask for annulment of the contract
d. D may choose between the Toyota or Lancer

56. A offers to B 100 electric fans for P80,00 payable in 60 days with 12% interest per annum. B accepted
the offer by telegram provided that interest is reduced to 6%. If there is a no further communication
between A and B relating to the terms
a. The contract is perfected because of the acceptance by B
b. There is no contract yet between A and B because B made a counter offer
c. The contract is perfected under the terms of A
d. There is no contract yet unless B gives earnest money

57. A owns 50 mango trees bearing fruits, ready for harvest. She sold all the fruits of all the trees to B who
paid
P100,000. A told B that he can harvest her fruits anytime he likes and pointing at the mango trees. For
legal purposes, A has fulfilled her obligation to deliver the mango fruits to B by
a. Traditio brevi manu c. Traditio longa manu
b. Tradito symbolica d. Traditio constitutum possesorium
58. A sold her specific car to B for P200,000 payable in 5 equal instalments. A delivered the car to B but a
mortgage was constituted on the car to answer for the unpaid instalments B paid the first 2 instalments
but failed to pay the last 3 instalments. A foreclosed the mortgage property and sold it at public action
for P100,000. Which is correct?
a. A can recover from B the balance of P20,000 even if there is no stipulation to that effect
b. A can recover from B the balance of P20,000 if there is stipulation to that effect
c. A cannot recover the deficiency except if there is stipulation to that effect
d. A cannot recover the deficiency even if there is stipulation to the contrary

59. Ownership of the thing sold is


a. Retained by the seller in ‘sale or return’
b. Transferred to the buyer upon constructive or actual delivery of the thing sold
c. Acquired by the buyer upon perfection of the contract
d. Transferred to the buyer upon acceptance of the price
60. Y sold his horse to Z for P50,000. No payment has yet been made and the sales document does not
provide the date of delivery. Before delivery and payment the horse gave birth to a baby horse, which is
correct?
a. Z is entitled to the baby horse which was born after the perfection of the contract
b. Y is entitled to the fruit (baby horse) as Z has not paid the price yet
c. Y is entitled to the (baby horse) because it was born before his obligation to deliver arises
d. Z should pay additional amount for the baby horse to be entitled to it

61. A contract of sale is in the stage of conception when


a. There is meeting of the minds c. The parties come to an agreement
b. Negotiations are in progress d. The contract is perfected

62. A seller sold to a buyer a piece of jewelry at a price of P20,000. The contract provides that the buyer will
pay the seller cash-P8,000 and for the balance, the buyer will give the seller a micro oven worth P12,000.
What is the nature of the contract?
a. Sale c. Barter
b. Partly sale and partly barter d. Commodatum

63. A, the guardian of B, sold B’s house and lot worth P480,000 for P240,000. Which is correct?
a. The contract can be rescinded because of inadequacy of price
b. The contract cannot be rescinded because there is no fraud, mistakes or undue influence
c. The contract cannot be rescinded because all the elements of a contract are present
d. The contract can be rescinded by A.

64. A leased to B a 5 DOC generator for two years at lease rental fee of P1,000 per month and signed an
option in favor of B to buy the generator at the end of the lease at P60,000. All rental fees paid are to be
considered as partial payment of the sale. After 12 months B was able to pay the rental fees for 9 months
and was in arrears for three months. A terminated the lease contract and repossessed the generator. The
consequence of the transaction is
a. A can collect the rental fees for three months which are in arrears
b. A can collect the rental fees for the unexpired 12 months of the lease contract
c. When A took possession of the generator, he has no further action against B
d. A in terminating the lease and repossessing the generator is obliged to refund the 9 months rental fee,
paid by B even if there is a stipulation to the contrary

65. X sold his car to Y for P50,000. No date was fixed for the performance of the obligation of the seller and
the buyer. The obligation of X is
a. To deliver the car immediately because the sale is a perfected contract
b. To deliver the car only after Y writes to X demanding the delivery of the car
c. To deliver the car only after Y pays the P50,000
d. To rescind the contract because there is no time fixed for the delivery

For numbers 66-81


a. Both are true c. Only the first is true
b. Both are false d. Only the second is true

66. The vendor need not be the owner at the time the sale is perfected. It is sufficient that he is the owner at
the time the thing sold is delivered. T
The sale of a vain hope or expectancy is voidable. F

67. There may be a contract of sale of goods, whose acquisition by the seller depends upon a contingency
which may or may not happen. T
If the consideration of the contract consists partly in money and partly in another thing, it shall be
considered a barter if the value of the thing given as a part of the consideration exceeds the amount of
the money or its equivalent. F
68. If the price is grossly inadequate, the sale is void. F
Whenever option money is given in a contract of sale, it shall be considered as part of the price and a
proof of the perfection of the contract. F

69. Earnest money and option money both apply to perfected sale. F
In a contract of sale of personal property the price of which is payable in instrument, the vendor may
cancel the sale should the vendee fail to pay. F

70. Should the vendee’s failure to pay, cover two or more instalments, the vendor may foreclose the chattel
mortgage on the thing sold but he shall have no further action against the purchaser to recover any unpaid
balance of the price, except if there is an agreement to the contrary. F
Sales is a consensual contract, therefore delivery or payment is not essential for perfection. T

71. The ownership of the thing sold shall be transferred to the vendee upon perfection of the contract. F
An unaccepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon
the promissor. F

72. The husband and the wife cannot sell property to each other, as a rule. T
The sale of a piece of land or interest therein when made thru an agent is void unless the agent’s authority
is in writing even if the sale itself is in a public instrument and has been registered. T

73. The expenses for execution and registration of the sale shall be borne by the vendee, unless there is a
stipulation to the contrary. F
If the same thing should have been sold to different vendees the ownership shall be transferred to the
person who may have taken possession thereof in good faith. F

74. Any stipulation exempting the vendor from the obligation to answer for eviction shall be liable to the
vendee. F
The vendor is responsible to the vendee for any hidden faults or defects in the thing sold only if he was
aware thereof. F

75. If the animal sold should die within three (3) days after its purchase, the vendor shall be liable to the
vendee. F
The fixing of the price can never be left to the discretion of one of the contacting parties. However, if the
price fixed by one of the parties is accepted by the other, the sale is perfected. T

76. Option money is considered as part of the purchase price while earnest money is not. F
The Maceda Law refers to the sale of personal property by instalments while the Recto Law refers to the
sale of real property by instalments. F

77. If two or more animals are sold together, whether or lump sum or for a separate price for each of them,
the redhibitory defect of one shall give rise to the redhibition of the others. F
There is no warranty against hidden defects of animal sold at fairs or at public auctions or of livestock
sold as condemned. T

78. The ownership in the thing shall not pass to the purchaser until he has fully paid the price. F
If at the time the contract of sale is perfected, the thing which is the object of the contract has been
partially lost, the contract shall be without effect. F

79. Where the seller of goods has a voidable title thereto, but his title has not been avoided at the time of the
sale, a buyer in good faith acquires a good title to the goods. T
If the vendee has renounced the right to warranty in case of eviction, and eviction should take place, the
vendor shall only pay the value which the thing sold had at the time of sale. F
80. Unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof by instalment. T
In case of doubt, a contract purporting to be an equitable mortgage shall be construed as a sale with a
right to repurchase. F

81. The creditors of the vendor cannot make use of the right of redemption against the vendee, until they
have exhausted the property of the vendor. T
Sale is a real contract because delivery is necessary to transfer ownership to the buyer. F
AGENCY

1. Which of the following is correct?


a. A contract of agency must be in writing to be a valid agreement
b. A sale of personal property made by an agent without authority from the owner is void
c. A sale of a piece of land made by an agent with oral authority from the owner is void
d. An unemancipated minor cannot be appointed as agent

2. In which of the following acts may a person not appoint an agent?


a. To represent the principal in a wedding ceremony where the principal is a principal sponsor
b. To vote for the principal during the meetings of stockholders where the principal is a stockholder
c. To represent the principal in a baptismal ceremony where the principal is the father of the child to be
baptized
d. To attend a meeting of the board of directors of a corporation where the principal is a director

3. Not a fundamental obligation of the agent


a. Sacrifice his interest and give it to the principal if there is a conflict
b. To render an accounting on the transaction
c. Should not carry out the agency even if that is the instruction, if he knew it would result in a loss or
damage to the principal
d. Can be the borrower if he is authorized to lend

4. A appointed B as his agent to sell his car for P250,000. B sold the car to C for P250,000 but B acted in
his own name. After delivery, C inspected the car and she found hidden defects in the car. Is A, as
principal, liable to C even if B acted in his own name?
a. No, applying “caveat emptor” or let the buyer beware
b. Yes, because this is a contract involving property belonging to the principal
c. No, because the contract of sale is between B and C
d. Yes, if C was aware of the hidden defects

5. To improve the financial condition of his principal, an agent with general powers of administration given
to him by the principal in writing, sold two parcels of land, one for less than the price appearing in the
inventory prepared by the principal and the other for double the price that appeared in the aforesaid
inventory. Which is correct?
a. Both contracts cannot be enforced against the principal
b. Both contracts are binding upon the principal
c. The sale for double the price appearing in the inventory is binding upon the principal
d. The sale for less than the price appearing in the inventory is binding upon the principal

6. It is a contract wherein a person binds himself to render some services in representation or on behalf of
another, with the consent or authority of the latter
a. Agency
b. Contract of service
c. Contract of piece work
d. Partnership

7. Which of the following refers to a contract of agency?


a. He represents an incapacitated person c. He is controlled by the principal
b. There is no meeting of minds d. The legal relation is always created by law

8. The following are characteristics of a contract of agency, except


a. Consensual
b. Principal
c. Innominate
d. Bilateral
9. If an agent enters into a contract in the name of his principal, exceeding the scope of his authority, the
contract is
a. Voidable
b. Unenforceable
c. Rescissible
d. Void

10. P appointed A to be his agent to administer his mango orchard while P is in USA, but A died leaving his
son, B, of legal age to take care of the mango orchard until P arrived. This is an agency created by:
a. Estoppel
b. Ratification
c. Assignment
d. Operation of law

11. This requires a special power of attorney, except


a. To accept or repudiate an inheritance c. To enter into compromise
b. To effect novation d. To lease real property for one year

12. A, a manufacturer and B, a distributor agreed to a contract where A will deliver 2000 units of A’s
products to B every month and B will sell the products at A’s suggested prices plus 15%. All unsold units
at the end of the year shall be bought back by A at the same price at the time the products were ordered.
A shall hold B free from any claim for defects in the units. The contract between A and B is
a. Contract of sale
b. Sale with right to repurchase
c. Contract of lease
d. Agency to sell

13. Bears the risk of collecting from the buyer the price of the sale
a. Commission agent
b. Delegacion
c. Del credere agent
d. Expromission

14. On day 1, A appointed B as his agent covered by a general power to lease his car to Z for eight months.
On day 2, A appointed C as his agent covered by a special power to lease the same car for two months.
On day 3, A directly transacted business with Z, leasing the car for two months. Which is correct?
a. The appointment of B is valid because it is covered by a general power
b. The appointment of C is valid because it is covered by a special power
c. The appointment of B and C are considered revoked because the principal directly transacted with Z
d. The appointment of B is valid because it is the earliest appointment

15. Note a mode of extinguishing an agency


a. Accomplishment of agency
b. Death of the principal and the agency is for the interest of either the principal or agent
c. Insanity of the principal or agent
d. Dissolution of the firm or corporation which entrusted or accepted the agency

16. Agency can be revoked at will


a. When a bilateral contract depends upon it
b. If it is the means of fulfilling an obligation already contracted
c. If a partner is appointed managing partner in the articles of partnership and his removal is unjustifiable
d. When the principal directly manages the business entrusted to the agent
17. In agency, the agent represents
a. A person who is capacitated
b. A person who is incapacitated
c. Heirs and creditors of the estate
d. The judicial court

18. When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall
be in a public instrument, otherwise the sale is void.
Agency is presumed to be without compensation unless there is a proof to the contrary
a. Both are true
b. Both are false
c. Only the first statement is true
d. Only the second statement is true

19. A special power to sell includes the power of mortgage and a special power to mortgage includes the
power to sell
Should there be a stipulation that the agent shall advance the necessary funds, he shall be bound to do so
even when the principal is insolvent.
a. Both are true
b. Both are false
c. Only the first statement is true
d. Only the second statement is true

20. If the agent has been empowered to borrow the money he may himself be the lender at the current rate
of interest and if he has been authorized to lend the money at interest, he can borrow it.
Every agent is bound to render an account of his transactions and to deliver to the principal whatever he
may received by the virtue of the agency through it may not be owing to the principal.
a. Both are true
b. Both are false
c. Only the first statement is true
d. Only the second statement is true

21. The responsibility of two or more agents who have been appointed simultaneously is solidary.
When the two or more principals have granted a power of attorney for a common transaction, any one
them may revoke the same provided it is with the consent of the others.
a. Both are true
b. Both are false
c. Only the first statement is true
d. Only the second statement is true

22. The limit of the agent’s authority shall be considered exceeded even if it have been performed in a manner
more advantageous to the principal than that specified by him.
If the agent acts in his own name, he is directly bound as if the transaction were his own and that the
contract shall not be valid between the principal and the third party.
a. Both are true
b. Both are false
c. Only the first statement is true
d. Only the second statement is true

23. In the execution of the agency, the agent shall observe the diligence of a father of a good family.
In case a person declines an agency, he is bound to observe ordinary diligence in the custody and
preservation of the goods forwarded to him by the owner until the latter should appoint an agent.
a. Both are true
b. Both are false
c. Only the first statement is true
d. Only the second statement is true

24. If the agent contracts in the name of the principal exceeding the scope of his authority and the principal
does not ratify the contract, the contract shall be void if the party with whom the agent contracted is
aware of the limits of the powers granted by the principal.
A third person cannot set up the fact that the agent has exceeded his powers, if the principal has ratified,
or has signified his willingness to ratify the agent’s acts.
a. Both are true
b. Both are false
c. Only the first statement is true
d. Only the second statement is true

25. Every stipulation exempting the agent from the obligation to render an account shall be void.
The agent and the principal must be both capacitated.
a. Both are true
b. Both are false
c. Only the first statement is true
d. Only the second statement is true

26. Statement 1 – The agent should finish the business already begun on the death of the principal should
delay entail any danger
Statement 2 – The agent may appoint a substitute if he was given the power to appoint one but he should
be responsible for the acts of the substitute.
a. Both are true
b. Both are false
c. Only the first statement is true
d. Only the second statement is true

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