Contract

10. It is the manifestation of the meeting of the offer and

1. A real contract has the following essential elements: the acceptance upon the thing and the cause which
a) Consent of the contracting parties, object certain are to constitute the contract.
and cause or consideration a) Consideration
b) Consent of the contracting parties, object b) Contract
certain and cause or consideration and c) Consent
delivery of the object d) Cause
c) Consent of the contracting parties, object certain
and cause or consideration and formalities 11. On June 1, 2018. S offered to sell his only car to B for
required by law P100,000. B accepted the offer by mailing his letter of
d) Consent of the contracting parties, object certain, acceptance on June 10, 2018. On June 12, 2018, B
delivery of object and formalities required by law revoked his previous acceptance and mailed his letter
of revocation on the same date. S received the letter
2. Meeting of the minds between two persons whereby of acceptance on June 15, 2018.
one binds himself with respect to the other to give a) The contract was perfected on June 14, 2018
something or to render some service is known as: when S received B’s letter of acceptance.
a) Obligation b) The contract was not perfected because at
b) Consent the time the acceptance was received, the
c) Contract parties are no longer of one mind.
d) Stipulation c) The contract was perfected on June 10, 2018
when B sent his letter of acceptance.
3. Elements that accompany with certain contracts d) The perfection of the contract retroacts to June 1,
unless set aside or suppressed by the parties are 2018 when the offer was made.
known as:
a) Natural Elements 12. Three of the following instances will render an offer
b) Accidental Elements ineffective before acceptance is conveyed. Which one
c) Essential Elements will not?
d) Original Elements a) Civil interdiction of either party
Insolvency of either party
4. One of the following is a natural element of a sales b) Insanity of either party
contract c) Intoxication of either party
a) Terms of Payment
b) Rate of Interest 13. On July 1, 2018, Serrano offered to sell his only Mercedes
c) Place of Delivery Benz car for P1,000,000 to Benitez who was interested in
buying the same. In his letter to Benitez, Serrano stated that
d) Warranty against eviction
he was giving Benitez up to July 31, 2018 to make up his
mind whether to buy the car or not. On July 25, 2018,
5. A contract where both parties are required to do or Serrano personally went to Benitez to inform him that he was
give something is known as a: no longer willing to sell the car unless the price was
a) Bilateral Contract increased to P1,400,000 because another buyer was
b) Unilateral Contract interested in buying the car for the said amount of
c) Gratuitous Contract P1,400,000.
d) Commutative Contract a) Benitez may compel Serrano to sell to him the
car for P1M.
6. Contracts may take effect only between the b) Serrano may validly withdraw his offer to
contracting parties, their assigns and heirs, except in Benitez because the option was not founded
cases where the obligations and rights arising from upon a consideration.
the contract are not transmissible by nature, or by c) Serrano may not withdraw his offer until the lapse
stipulation or provision of law. This principle of of the option period that he gave to Benitez
contract is known as: d) The increase in the price made by Serrano was
a) Relativity of Contracts not valid because it was made within the option
b) Mutuality of Contracts period.
c) Obligatory force of Contracts
d) Liberty of Contract 14. A contract entered into by incapacitated person is:
a) Void
7. A contract may be enforced by or against a third b) Voidable
person, except: c) Rescissible
a) In the case of stipulation pour atrui d) Unenforceable
b) When a third person includes another to violate
his contract 15. A contract entered into in a state of drunkenness of
c) In case of contracts intended to defraud creditors during hypnotic spell are:
d) When the benefit of a third person is merely a) Valid
incidental b) Voidable
c) Rescissible
8. Obligations arising from contracts have the force of d) Void
law between the contracting parties and should be
complied in good faith. From perfection, the parties 16. Aside from fraud and undue influence, the following
are bound not only to the fulfillment of what has been are the vices of consent, except:
expressly stipulated but also to all the consequences a) Violence
which, according to their nature, may be in keeping b) Intimidation
with good faith, usage and law. This is known as the c) Mistake
principle of: d) Dealer’s talk
a) Consummation of Contract
b) Consensuality of Contract 17. It involves the employment of serious or irresistible
c) Obligatory force of contract and compliance force to obtain consent.
in good faith a) Intimidation
d) Mutuality of Contracts b) Threat
c) Violence
9. One of the following is not a real contract d) Moral Coercion
a) Pledge
b) Commodatum 18. Fraud exist in three of the following. Which is the
c) Deposit exception?
d) Sale
 a) When through the insidious words or
machinations of one of the contracting parties,
the other is induced to enter into a contract
which, without them, he would not have agreed
to.
b) When there is a failure to disclose facts, when
there is duty to reveal them, as when the parties
are bound by confidential relations.
c) When there is an expression of an opinion by an
expert which turned out to be wrong, and the
other party relied upon such expert knowledge.
d) When the misrepresentation refer to the usual
exaggerations in trade, and the other party
had an opportunity to know the facts.
19. An absolute simulated contract is:
a) Void
b) Voidable
c) Valid
d) Enforceable
20. One of the following statements does not pertain to a
relatively simulated contracts.
a) The parties conceal their true agreement
b) The parties are bound by their real agreement
provided it does not prejudice third persons
c) The parties are bound by their real agreement
provided it is not contrary to law, morals, third
persons, public order or public policy
d) The parties do not intend to be bound at all.
21. A contract whose cause is the promise of a thing or
service by the other party is:
a) An onerous contract
b) A gratuitous contract
c) A lucrative contract
d) A remuneratory contract
22. A contract whose cause is the liberality of the
benefactor is:
a) a gratuitous contract or contract of pure
beneficiary
b) a remuneratory contract
c) an aleatory contract
d) an onerous contract
23. One of the following is not a requisite of cause in a
contract. Which is it?
a) It must exist.
b) It must be lawful.
c) It must not be false.
d) It must be clearly stated in the contract.
24. The defective contracts arranged according to the
degree of their defectiveness from the least defective
to the most defective are:
a) Voidable, rescissible, unenforceable, and void
contracts
b) Rescissible, unenforceable and void contracts
c) Rescissible, voidable, unenforceable, and
void contracts
d) Unenforceable, rescissible, voidable, and void
contracts
25. The following are the requisites of a rescissible
payment, except:
a) The debt is already due
b) The debtor is insolvent
c) The debtor pays the debt
d) The payment is not yet due
26. One of the following statements concerning
ratification of a voidable contract is false. Which is it?
a) Ratification extinguishes the action to annul
voidable contract
b) Ratification cleanses the contract from all its
defects from the moment it was constituted
c) Ratification requires the conformity of the
party who has the right to bring the action for
annulment
d) Ratification may be made by the guardian of the
incapacitated person, or the party whose consent
was vitiated
27. One of the following may not annul a voidable
contract,
a) The party whose consent is vitiated by violence,
intimidation, mistake, fraud or undue influence
b) The incapacitated person when he attains
capacity.
c) The guardian, during the ward’s incapacity
d) The party who is capable of entering into a
contract.
28. The following contracts are unenforceable, except:
a) Those entered into by one who has no authority
or legal representation
b) Those that do not comply with the Statute of
Frauds
c) Those where both parties are incapable of giving
consent to a contract
d) Those where the consent of a party is vitiated
by violence, intimidation, mistake, fraud or
undue influence
29. The Statute of Frauds applies only to:
a) Wholly executed contracts
b) Contracts wholly or partially executed on the part
of the debtor
c) Contracts wholly or partially executed on the part
of the creditor
d) Wholly executory contracts.
30. D was driving on his way to Manila from the province when
he suffered a busted fire. Not having any spare tire, he went
to a nearby car spare parts store to buy a new tire. However,
he did not have sufficient money with him so he phoned G,
his friend, who happened to know the S, the owner. G then
instructed D to give S the telephone through which G told S
“Don’t worry. If D cannot pay, just charge me.” D was thus
able to buy a new tire for P6,000 fir which S issued D a sales
invoice.
a) If D cannot pay, S can proceed against G to
make good his promise to pay D’s debt
b) G’s promise cannot be enforced against him
because he did not execute any writing for
the guaranty he made
c) S can enforce G’s promise to answer for D’s debt
since the guaranty was witnessed by D
d) S can enforce G’s promise because there was a
writing of some kind, the invoice for the sale of
the tire.
31. The following contracts are void or inexistent, except:
a) Those whose cause, object or purpose is
contrary to law, morals, good customs, public
order or public policy.
b) Those which are absolutely simulated or fictitious
c) Those whose cause or object did not exist at the
time of the transaction
d) Those where one of the parties employed
fraud to obtain the consent of the other
32. If the illegal contract between the parties is a criminal
offense and both parties are guilty (in pari delicto),
such illegal contract shall produce the following
effects, except:
a) The parties shall have no right of action against
each other
b) Both parties shall be criminally prosecuted
c) The effects and instruments of the crime will be
confiscated in favor of the government
d) The parties may recover what they have give,
if it is not illegal in itself
33. If the contract is illegal but it does not constitute a
criminal offense and only one party is guilty, such
illegal contract shall produce the following effects,
except:
a) The guilty party cannot recover what he has
given
b) The guilty party cannot ask for the fulfillment of
what has been promised him.
c) The innocent party cannot be compelled to
comply with his promise
d) The innocent party cannot demand the return
of what he has given

34. The following contracts are required to appear in a
public document for the convenience of the parties so
that they may be registered into the proper recording
office, except:
a) Contracts which have for their object the creation
of real rights over immovable property
b) The acceptance of an inheritance
c) The power to administer property
d) The cession of actions or rights proceeding from
an act, appearing in a public document
35. Reformation of instruments has the following
requisites, except
a) There must be meeting of the minds of the
parties to the contract
b) The true intention of the parties is not expressed
in the instrument
c) The failure of the instrument to express the true
intention of the parties is due mistake, fraud,
inequitable conduct or accident
d) The contract must be in a public instrument
36. As a rule, a contract of sale is perfected:
a) Upon compliance with the instrument of the law
as to form
b) Upon delivery of the object of the contract
c) Upon the meeting of the minds on the thing
which is the object of the contract and upon
the price
d) Upon demand
37. Reformation is not available in the following cases,
except:
a) Simple donations inter vivos wherein no condition
is imposed
b) Wills
c) When the real agreement is void
d) When through the ignorance, lack of skill
negligence or bad faith on the part of the
person drafting the instrument or of the clerk
or typist, the instrument does not express the
intention of the parties
38. A contract of sale is not a:
a) Principal contract
b) Nominate contract
c) Consensual contract
d) Real contract
39. D insured his house against fire with C Insurance
Company. The insurance policy which was prepared
and printed by C Insurance Company was signed by
D after reading its terms. You are to determine which
of the following characterize the contract between D
and C Insurance Company.
I. Auto-contract
II. Contract of adhesion
III. Aleatory contract
IV. Nominate contract
The contract between D and C Insurance Company
is:
a) I, II and III
b) II, III and IV.
c) I, II and IV
d) I, III and IV
40. Nadya, a woman, agreed to live with Hayme, a man as the
wife of Hayme without the benefit of marriage in exchange
for the monthly support of P10,000 that Hayme would give to
Nadya. Both Hayme and Nadya are single, of legal age, and
there is no legal impediment for them to get married. Their
parents have no objections to the two getting married. Based
on the foregoing information, which of the following
statement is true?
a) The agreement between Hayme and Nadya is
valid because they can legally get married if they
want to.
b) The agreement between Hayme and Nadya is
void for being contrary to morals
c) Hayme may legally demand that Nadya live with
him as his wife.
d) Nadya may legally demand that Hayme give her
the monthly support of P10,000 that he had
promised.
41. Which of the following contracts is rescissible?
a) Contracts entered into during a hypnotic spell
b) Contracts entered into in a state of drunkenness
c) Contracts entered into to defraud creditors
when the latter cannot collect the claims due
them
d) Contracts where both parties are incapable of
giving consent
42. A, duly authorized agent of P, wrote a letter to B on August
1, 2018 offering to sell P’s only Mercedes Benz car for
P200,000 cash. On August 3, 2018, B wrote a letter to A
stating that he was accepting all the terms of the offer, which
letter was received by A on August 5, 2018. Before A could
relay such acceptance to P, P died in a vehicular accident on
August 6, 2018.
a) The contract was not perfected because P, the
real party to the sale, died before the acceptance
came to his knowledge
b) The contract was perfected on August 1, 2018
c) The contract was perfected on August 3, 2018
d) The contract was perfected on August 5, 2018
43. The cause of a contract differs from the motive of
each party to the contract in that motive:
a) Is an essential element of a contract
b) Although illegal, does not affect the validity of
the contract
c) Is always known by the other party
d) When illegal will render the contract void.
44. P is a minister of a certain church whose members include
X. X regularly confides in P because of his many personal
problems. P is interested in buying the lot of X and uses his
position as elder of the church and confidant of X to
convince X to sell to him the lot. Should X sell the lot to P by
reason of P taking advantage of his confidential relationship
with X, the contract between them would likely be voidable
because of
a) Intimidation
b) Undue influence
c) Fraud
d) Mistake
45. S convinced B to buy a gold-plated bar which S told B
was made of pure gold. B bought the thing believing
that it was really made of pure gold. The contract
between S and B is:
a) Valid
b) Voidable
c) Rescissible
d) Void
46. D, out of his love and affection for C, donated a parcel
of land to the latter who accepted it. The formalities
required by law were complied with. The contract
between D and C is:
a) Onerous contract
b) Gratuitous contract
c) A remuneratory contract
d) An accessory contract
47. The cause of the contract in the previous number is:
a) The parcel of land
b) The acceptance of the donation by C
c) The generosity of D
d) The contract has no cause because C did not
give any consideration to D.
48. B bought a baby boy from S. B knew that the baby
boy was his illegitimate son by a woman named, W,
and which W sold to S. The contract between B and S
is:
a) Valid
b) Void
c) Unenforceable
d) Voidable
49. The stages of a contract according to the order of
their occurrence are:
a) Birth, conception and consummation
 b) Conception, consummation and birth
c) Conception, birth and consummation
d) Consummation, conception and birth
50. They refer to particular stipulations of the parties in a
contract
a) Accidental elements
b) Natural elements
c) Inherent elements
d) Essential elements
51. The cause of the contract in Number 106 is:
a. the parcel of land.
b. the acceptance of the donation by C.
c. the generosity of D.
d. the contract has no cause because C did not give
any consideration to D.
52. Which of the following contracts is valid, enforceable and
would not require any further act for the convenience of the
parties other than its registration with the proper government
office?
a. Oral sale of a piece of land made through an agent
whose authority is in a public instrument.
b. Sale of a piece of land in a public instrument made
through an agent whose authority was given orally by the
principal.
c. Sale of a piece of land in a private instrument made
through an agent whose authority is in a public instrument.
d. Sale of a piece of land in a public instrument
made through an agent whose authority is in a public
instrument.
53. S sold his only horse to B for P30,000.00. The parties agreed that
S shall deliver the horse one week from the execution of their
agreement. B, however, is required to pay the price immediately in
certified check. In the place of S and B, it was the custom that anyone
selling a horse should place a horseshoe on its hooves. However, this
was not stated in the agreement including how the horse would be cared
for before delivery.
a. S is not obliged to place a horseshoe on the horse
although it was the custom in the place because S and B did not
stipulate about it.
b. S is obliged to place a horseshoe on the horse
because the observance of custom or usage in the
becomes part of the contract.
c. S is not obliged to take care of the horse before
delivery because the caring of the horse was not stipulated.
d. S and B are bound only by the terms stated in their
agreement.
54. In January 2008, S, 17 years old, sold his only car to B, 21
years old. The sale was without the knowledge of G, the
guardian of S. Assuming an annulment case is filed today:
a. S may bring the action for annulment.
b. G may bring the action for annulment.
c. B may bring the action for annulment.
d. Annulment will not prosper whoever will file it.
55. Which among the following contracts is void?
a. A contract of barter between S, insane, and B, 17
years old.
b. A contract of sale where B, the buyer, twisted the
arm of S, the seller, so that S would sign the deed of sale.
c. A contract of sale where B, the buyer, aimed a gun
at the wife of S, so that S would sign the deed of sale.
d. A contract for the sale of a cow which is
suffering from a contagious disease.
56. Which of the following contracts is valid and enforceable?
a. An oral promise to answer for the default of another.
b. A donation and its acceptance in a private
instrument of a parcel of land.
c. An oral lease of a mining equipment for more
than two years.
d. An oral contract of sale of a ring worth P450,000
between an insane and a minor.
57. S and B entered into a contract where they made it appear
that S sold to B a parcel of land worth P50,000.00. In reality,
however, S borrowed from B P50,000.00 with S mortgaging the
parcel of land as security for the debt.
a. S and B are bound by the contract of loan and
mortgage.
b. S and B are bound by the contract of sale.
c. S and B are not bound at all.
D. S and B are bound by the contract of loan and
mortgage if third persons are affected.
58. S, a store owner, hired the services of E as a clerk in the store at
the minimum wage. E began to work immediately although no
employment papers were signed by S and E. After 1 year and 2 months
without E receiving any compensation except free meals and lodging, E
demanded payment from S. S refused to pay E on the ground that their
contract was unenforceable not being in writing and that the employment
already lasted more than a year.
a. The contract is unenforceable because it is not in
writing and it has already been one year from the time it was
entered into.
b. The contract is valid and enforceable although
not in writing.
c. The contract is void because an employment
contract must be in writing to be valid.
d. The contract is rescissible because E suffered
damages by the reason of non-payment of his compensation.
59. S sold a parcel of land to B for P100,000.00 with B paying the said
amount immediately. Although S delivered the transfer certificate of title
of the land to B, the parties did not execute any document at all for the
sale except the receipt for the payment which S issued to B. B now wants
to register the sale with the Register of Deeds.
a. B can compel S to execute a Deed of Sale which
is duly notarized so that B can register the sale.
b. B cannot compel S to execute a Deed of Sale
because the contract is unenforceable.
c. The contract between S and B is void because it was
not in the form required by law.
d. The contract between S and B is rescissible; hence
can sue for damages.
60. S and B entered into a contract whereby S sold his car to B
for P100,000.00. Based on the foregoing, which of the following
statements is incorrect?
a. The contract is voidable if S is 17 years old, and B is
25 years old.
b. The contract is unenforceable if S is 17 and B is
insane.
c. The contract is void if B, 25 years old, compelled
S, 30 years old, to sign deed of sale by threatening to burn
the house of S.
d. The contract is rescissible if at the time of the sale,
the car was the subject of litigation brought by X against S to
recover the car, and the court and X did not give their authority
to the sale.
61. Which of the following contracts is valid and enforceable?
a. A contract where a party gave his consent in a
moment 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 party gave his consent because
the other party threatened to kill the first party’s spouse.
d. A contract where there was inadequate cause
attended by mistake.
62. A entered into a contract with B whereby B agreed not to
testify in a criminal case filed against A in exchange for
P5,000.00 to be given by A. The contract between A an B is:
a. void for being contrary to law.
b. void for being contrary to good customs.
c. void for being contrary to public policy.
d. valid because there is nothing wrong when one does
not want to testify against another in a crime.
63. Which of the following must be in writing to be enforceable
as require by the Statute of Frauds?
a. A subscription for 100 shares of stock of a
corporation at P100.00 per share.
b. A contract for the construction of a building
scheduled to begin 3 months after the execution of the contract.
c. A contract for the lease of an agricultural lot for a
period of 8 months.
d. A contract whereby one agrees to pay another’s
debt if the latter defaults in his payment.
64. Which of the following contracts is valid and enforceable?
a. A written contract for the purchase of a newborn
baby who is the illegitimate child of the buyer.
b. A written contract of employment where the
employee agreed voluntarily not to demand overtime payment
for work rendered in excess of the regular hours of work per day.
c. An oral contract for the sale of a piece of land for
P50,000.00 with the buyer giving a down payment of
P20,000.00.
d. An oral contract where the fruits of an immovable
belonging to the debtor are to be applied to the interest and
principal of his obligation.
65. S, 17 ½ years old, sold his bicycle to , 24, for P12,000.00.
The price is payable in 12 monthly instalments. After reaching
18, S continued to collect the remaining 6 installments until the
price was paid in full.
a. S may still annul his contract with B.
b. S may no longer annul his contract with B.
c. Only B may annul the contract with S on the ground
of incapacity of S.
d. S and B may annul the contract at the same time
based on the incapacity of S.
66. Under a contract between D and C, D is obliged to deliver
10 bags of detergent soap to C in 10 days after the execution of
their agreement. On due date, D delivered to C 10 bags of
detergent soap which he mixed with chalk.
a. The contract entered into between D and C is
voidable because of the frau employed by D.
b. The contract is valid. The fraud employed by D
does not affect the validity of the contract but D is obliged
to pay damages to C.
c. The contract is void because of the fraud employed
by D in the performance of his obligation.
d. The contract is rescissible because of the damages
suffered by C.
67. On January 1, 2010, Berroya bought a parcel of land from
Salustiano who was insane. The deed of sale was duly acknowledged
before a notary public. Six months after the sale, Berroya realized that
he needed a larger area on which to construct a commercial building.
Salustiano who had been undergoing psychiatric treatment was
declared of sound mind by his psychiatrist. Should a court action be filed
today:
a. Berroya may successfully prosecute a court action
to annul the contract on the ground of Salustiano’s insanity.
b. Salustiano may successfully prosecute a court
action to annul the contract on the ground of his insanity.
c. Neither Berroya nor Salustiano may successfully
prosecute a court action to annul the contract.
d. Berroya may successfully prosecute a court action
to annul the contract on the ground of mistake as to the area of
the parcel of land.
68. Stanley, 17 years old, suffered a deep cut on his eyebrow during a
basketball game. He requested one of his teammates to call Dr. Ramos
whose clinic was just a stone’s throw from the basketball court. Later,
Dr. Ramos sent a bill to Stanley amounting to P500.00 for the services
he rendered. Stanley refused to pay the bill, claiming that, as a minor,
he was not liable. The charge was a reasonable amount.
a. Stanley is not liable because he is a minor and thus
incapable of giving consent to engage the services of the doctor.
b. Stanley is liable although he is a minor because
the contract involved a necessary.
c. Stanley is liable only when he reaches the age of
majority.
d. The teammate is the one liable because it was he
who personally called the doctor.
69. The following contracts are presented to you:
I. A contract of savings deposit between A and XYZ
Bank. The contract was executed so that A can present a
certificate of bank deposit to the embassy of foreign country
since A is applying for a visa to the said country. A really has no
deposit in the bank.
II. A contract where S and B made it appear that S sold
his car to B for P100,0000.00, but S actually borrowed
P100,000.00 from B and mortgaged his car to secure the debt.
In your evaluation of the foregoing contracts:
a. Both contracts are absolutely simulated.
b. Both contracts are relatively simulated.
c. Contract I is absolutely simulated; Contract II
is relatively simulated.
d. Contract I is relatively simulated; Contract II is
absolutely simulated.
70. Which of the following contracts involving real property is
valid and enforceable although not in writing?
a. Sale of a piece of land for P50,000.00.
b. Lease of an agricultural lot for a period of 2 years at
a monthly rental of P3,000.00.
c. Mortgage of a commercial lot to secure a loan of
P50,000.00.
d. Donation and acceptance of a residential lot.
71. Tadeo owned a vacant lot adjacent to a bigger lot where Star Circus
planned to put up a two-week performance as provided in the lease
contract which it executed with Legaspi, the owner of the bigger lot. In
expectation of using his property for parking lot, Tadeo levelled his lot
and built a small shed which cost him P20,000.00, an amount he had
yet to pay the contractor. Later, however, Star Circus cancelled the
performance, so Tadeo brought a court action to recover P20,000.00
from it and Legaspi. Based on the foregoing information, which of the
following is incorrect?
a. The circus contract took effect only between Star
Circus and Legaspi, the parties to the contract of lease.
b. Tadeo can recover damages from Star Circus
and Legaspi by reason of stipulation pour autrui.
c. Tadeo must pay his own contractor the amount of
P20,000.00 because that is the obligation that he alone
contracted to pay.
d. Tadeo, as an incidental beneficiary, has no rights
under the circus contract.
72. An insurance policy which, in practice, is prepare by an
insurance company and all the insured has to do is sign thereon
if he agrees with its terms, is an example of:
a. an auto-contract.
b. a contract of adhesion.
c. a commutative contract.
d. a gratuitous contract.
73. Don Henrico was an 85-year old, wheelchair-bound invalid who
needed daily care. He hired Normita, a live-in nurse to take care of him.
After one year into this arrangement, Normita began to pressure Don
Henrico into signing a deed of donation giving Normita all his property in
exchange for her promise never to leave. Normita isolated Don Henrico
from all his relatives and friends and told him that everyone had
abandoned him and that only she cared about him. Convinced that he
had been abandoned by his family and friends, Don Henrico donated all
his property to Normita. Both the donation and the acceptance were
made in a public document. What is the status of the donation?
a. Valid since it was in a public document together with
the acceptance.
b. Voidable by reason of undue influence employed
by Normita on Don Henrico.
c. Voidable by reason of the intimidation employed by
Normita on Don Henrico.
d. Voidable since the old age of Don Henrico prohibited
him from thinking intelligently.
74. D, the only daughter and heir of L, a lawyer, discovered shortly after
L’s death that her father’s book, Legal Eagle, a rare collection, was
missing from L’s library. After going through L’s records, D traced the
book to S, a law student. When D informed S that she wanted the book
returned, S refused claiming that L donated the book to him. D, however,
protested saying that the book was merely lent to him by L.
a. D cannot ask for the return of the book although she
is the only heir because L’s right over the book was not
transmitted to her.
b. D can ask for the return of the book because it
should be considered to have been lent only by L to S, i,e.,
the contract should be one of commodatum only.
c. D cannot ask for the return of the book because the
same should be considered as having donated by L to S.
d. The contract involving the book is void since the
intent of L and S was ambiguous. Accordingly, D can ask for the
return of the book on the ground of the nullity of the contract.
75. S sold one of his lots to B for P100,000.00. The lot, located beside
a busy street, consisted of 1,200 square meters was covered by
Transfer Certificate of Title (TCT) No. 12345. After registering the sale
with the Register of Deeds, the issuance to him by the said office of a
new transfer certificate of title in his name, B discovered that the deed
of sale and the new title described S’s adjoining lot which, although also
consisting of 1,200 square meters, was covered y TCT No. 12346 and
located farther from the street. B learned that C, the secretary of S, typed
the wrong description on the deed of sale. B now approaches you for
advice on which course of action to take. What advise will you give to
B?
a. Annulment of the contract because he did not
consent to the purchase of the lot covered by TCT No. 12346.
b. Rescission because the erroneous description has
caused him damages.
c. Reformation because the deed of sale failed to show
the true intention of the parties to the contract.
d. Declaration of nullity of the contract because it is void
ab initio by reason of the wrong object.
Answer: C
76. Which of the following contracts is rescissible?
a. A sale made by a guardian in behalf of his ward of
the corn harvested from the ward’s corn field at a price of
P50,000.00. The corn had a value of P60,000.00.
b. A sale of a piece of land made by D to defraud C,
his creditor. The buyer of the piece of land was aware of the
fraudulent intention of D when D made the sale.
c. A donation made by D to X of his Guess wristwatch
worth P3,000.00 during a party where D was in a state of
drunkenness, X wrote his acceptance on a table napkin.
d. A barter of D’s ring with C’s necklace. D was publicly
known to be insane but he was in his lucid interval at the time of
the exchange.
77. Which of the following statements is true are regards a void
contract?
a. A void contract is ratified by the acceptance by a
party to the contract of a benefit under its terms.
b. The right to set up the defense of illegality of a void
contract may be waived if the illegality is not raised within a
reasonable time.
c. If there is a novation of a voi contract, such novation
is valid provided the new contract is valid.
d. The right to set up the defense of illegality of a
void contract does not prescribe.
78. W, a woman, agreed to live with M, a man, as M’s wife
without the benefit of marriage in exchange for M’s promise to
give a monthly support of P10,000.00. Both parties are single.
After 3 years, M found another woman and stopped giving
support to W.
a. W can demand the continuation of the monthly
support from M pursuant to their agreement.
b. M can demand the return of the support that he had
given to W for the past 3 years.
c. Both M and W will be criminally prosecuted.
d. The agreement between M and W is illegal but
the illegality does not constitute a crime.
79. It is a contract by virtue of the terms of which the parties
thereto promise and obligate themselves to enter into another
contract at a future time, upon the happening of certain events,
or the fulfilment of certain conditions.
a. Contract of adhesion.
b. Contract of option.
c. Contract of sale.
d. Auto-contract.
80. O was cleaning the glass window of his building when a large piece
of broken glass fell down directly hitting the roof of a car which was
parked below. C, the owner of the car, was not around. Sensing that he
would be made liable for the damage on the car, O immediately went
down and cleaned up the mess. O, seeing that W had witnessed all that
happened, proposed to give W P2,000.00 so that W would not testify in
case a court case is filed. W agreed to the proposal and accepted the
money. Base on the foregoing facts, which of the following statements
is incorrect?
a. O’s liability, if any, is based on quai-delict.
b. The agreement between O and W is binding on
both of them.
c. W may testify in court despite the agreement.
d. The agreement between O and W is void for being
contrary to public policy.
81. Salendrez agreed to sell his car to Martinez who just turned
17 years old, for P100,000.00. Martine gave a down payment of
P10,000.00 of the price. Shortly before the scheduled delivery
of the car, Salendrez received a higher offer from Tablizo. He
thus attempted to annul the sale on the ground that Martinez is
a minor.
a. Salendrez may annul the contract because the
minority of Martinez rendered the contract voidable.
b. Only Martinez may annul the contract on the
ground of his incapacity.
c. Martinez may no longer annul the contract because
he is deemed to have ratified it when he gave a down payment
at the time of the execution of the contract of the sale.
d. Neither Salendrez nor Martinez may annul the
contract because the contract is partly executed.
82. Torrente, a supplier of typewriters, sent to several customers in
various parts of the country a letter offering to sell out “all his stock of 10
unites of Olympia typewriter” at the discounted price of P3,000.00 each.
The offer stated that the reply must be received by registered mail not
later than September 18. On September 14, Belleza sent a registered
letter accepting the offer. The letter was received by Torrente on
September 19. On September 16, Corpuz sent a telegram accepting the
offer. The telegram was received by Torrente on the same day. Whose
acceptance is binding on Torrente?
 a. The acceptance by Belleza because it was mailed
first.
b. The acceptance by Corpuz because it was received
first by Torrente.
c. Neither acceptance is binding on Torrente.
d. Both the acceptance will be binding on Torrente,
with Belleza getting 5 typewriters, and Corpuz getting the
other 5.
83. S and B signed a deed (written contract) of sale of motor
vehicle whereby S 0sold his car to B for P200,0000.00. The
parties agreed that S would deliver the car, and B would pay the
price, after two weeks. Before the two week period was over, S
found another buyer who was willing to pay P220,000.00 for the
car. May S validly withdraw from his contract with B?
a. Yes, because B has not yet paid the price.
b. Yes, because the other buyer was willing to pay
more.
c. No, because S was already bound by his contract
with B and he cannot unilaterally withdraw from it.
d. Yes, because S has not yet delivered the car.
84. D obtained a loan from C amounting to P200,000.00. To secure the
loan, D mortgaged his lot. C registered the mortgage with the Register
of Deeds. Later, D sold the lot to X who was not aware that the lot was
mortgaged. On the due date of the loan, C demanded payment but D
could not pay. Accordingly, C decided to foreclose the mortgage on the
lot. X, however, opposed the foreclosure claiming that he was not bound
by the mortgage since he was not a party thereto.
a. X was bound by the mortgage although he was
not aware of it because the same is registered.
b. X was not bound by the mortgage because he was
not a party thereto.
c. Only D and C were bound by the mortgage contract
because they were the only parties thereto.
d. X was not bound by the mortgage because he was
not aware of it.
85. On June 1, S offered to sell a specific generator set to B for
P300,000.00. B sent his letter if acceptance to S on June 8. On
June 10, however, B became insane. On June 12, S received
B’s letter of acceptance.
a. The contract was perfected on June 8 when B sent
his letter of acceptance, at which time he was still sane.
b. The contract was perfected on June 12 when S
learned of the acceptance.
c. The contract was not perfected because the
insanity of B occurred before S came to learn of the
acceptance of his offer by B.
d. The contract was perfected on June 1 because the
acceptance made by B on June 8 retroacts to the date of the
offer.
86. P gave a special power of attorney to A to sell P’s house and lot for
P2,000,000.00. On May 7, A, pursuant to the authority granted to him by
P, offered to sell the house and lot to B at the price of P2,000,000.00. B
accepted the offer on May 8 by sending a letter of acceptance to A on
such date, which letter of acceptance was received by A on May 10. On
May 11, P revoked A’s authority before the latter could inform him of B’s
acceptance.
a. The contract was perfected on May 8 when B sent
his letter of acceptance.
b. The contract was perfected on May 10 when A
received the letter of acceptance.
c. The contract was not perfected because P, the true
owner of the car that was sold, revoked A’s authority before he
came to learn of B’s acceptance.
d. The contract was perfected on May 7 since the
acceptance by B retroacts to the date of the offer.
87. On May 1, Sonora offered to sell his car for P500,000.00 to Balmores
who was interested in buying the same. In his letter to Balmores, Sonora
stated that he was giving Balmores up to May 31 to decide whether to
buy the car or not. On May 10, Balmores sent to Sonora through his
messenger a letter stating that he was accepting the promise of Sonora.
Enclosed in the envelop was the amount of P2,000.00 as option money
On May 25, Sonora personally went to Balmores to inform him that he
was no longer willing to sell the car unless the price was increased to
P600,000.00 because another buyer was interested in buying the car for
the said amount.
a. Balmores may compel Sonor to sell him the car
for P500,000.00 because they have an option contract
which was founded upon valuable consideration.
b. Sonora may validly withdraw his offer to Balmores
and all that Sonora needs to do is to inform Balmores of such
withdrawal.
c. Sonora may withdraw his offer even before the lapse
of the option period that he gave to Balmores because that is his
right as the owner and seller of the car.
d. Sonora is free to sell the car to another only even
before the lapse of the option period that he gave to Balmores
because he stands to gain P100,000.00 from the transaction.
88. D donated his lot to C because he thought that C was his
illegitimate son. The deed of donation was signed by D and C,
and acknowledged by them before a notary public before a new
certificate of title to the lot was issued by the Register of Deeds.
Later, D learned that C was not his son, but that of another man:
a. D can have the donation annulled on the ground
of mistake of identity.
b. D can no longer annul the donation because a new
certificate of title has already been issued.
c. D cannot annul the donation because he freely
entered into it.
d. D cannot annul the donation because disregarding it
would be unfair to C.
89. A has been for more than 20 years the legal counsel of C. A talked
to C almost everyday in the course of giving counsel to C to convince C
to donate his lot to him. A told C that it was only he who knew all of C’s
cases and was the only one who could handle them and C’s other legal
concerns. Because of the persistence of A in talking him into donating
his lot, C finally signed the deed of donation of the lot in A’s favor with
all the formalities required by law.
a. The deed of donation is valid because all the
formalities required were complied with.
b. The deed of donation is voidable on the ground
of undue influence.
c. The deed of donation is voidable on the ground of
intimidation.
d. The deed of donation is valid because it was the only
way by which C could keep A as a lawyer.
90. The following are the essential elements of a consensual
contract except:
a. Consent of the contracting parties.
b. Object certain which is the subject matter of the
contract.
c. Delivery of the object of the contract.
d. Cause of the contract which must be established.
Answer: C
91. An insurance contract is:
a. an aleatory contract.
b. a contract of adhesion.
c. Both (a) and (b).
d. neither (a) nor (b).
92. D borrowed P100,000.00 from C. On due date, C demanded
payment by D refused to pay. In view thereof, C threatened to
sue D. Afraid that he would be sued, D executed a contract
transferring his lot to C by way of dacion en pago. What is the
status of the dacion en pago?
a. Void because D did not give his consent freely.
b. Voidable because D gave his consent by reason of
the intimidation employed by C.
 c. Valid because there was no intimidation when a
party seeks the aid of the courts to enforce his right.
d. Rescissible because D suffered damages.
93. On March 1, S sent a letter offering the sale of his car for
P200,000.00 cash to B. In his letter, S stated that B’s acceptance should
be sent by registered mail and must be received by S not later than
March 31. On March 20, B accepted the offer of S by sending an e-mail
message on the same day to S whose e-mail address was indicated in
the letter. S read the message the following day, March 21. Was there
a perfected contract between S and B?
a. Yes, on March 1.
b. Yes, on March 20.
c. Yes, on March 21.
d. No, no contract was perfected at all.
94. These statements are presented to you:
I. Option money is part of the purchase price.
II. Earnest money is proof of the perfection of a contract
of sale.
In your evaluation of the foregoing statements:
a. Both statements are true.
b. Both statements are false.
C. Only Statement I is true
d. Only Statement II is true.
95. D gave his US$100.00 bill to C to have it converted into pesos at the
agreed rate of P55.00 to US$1.00. When D received his money in pesos,
he discovered that C gave him P5,700.00 instead of P5,500.00. No
written agreement was executed by the parties. The only written
evidence of the transaction was the tape dispensed by the adding
machine showing the computation to be P5,500.00 and which was in the
possession of D.
a. The contract is voidable. C can have it annulled on
the ground of mistake.
b. The contract is valid. D must return the excess
of P200.00 to C.
c. The contract is unenforceable since it was not in
writing.
d. C can demand that a writing be executed to show
the true intention of the parties.
96. P, the owner of a business, appointed A as his agent to
manage it. P authorized A to borrow money for the business. A
himself is the one who lends the money at the current rate of
interest. Thus, in the said contract of loan, A enters into the
contract in his own behalf as lender and represents P as
borrower. The contract of loan in such a case is considered as:
a. an auto-contract.
b. an aleatory contract.
c. a remuneratory contract.
d. a gratuitous contract.
97. D dined at C’s restaurant where he was served food amounting to
P475.00. When he was about to pay, he discovered his wallet was
missing. Not having any money to pay, he called T, his friend, who knew
C, and explained his predicament. T, through his cell phone, then called
C and told D to let D leave without incident, and that he would be the
one to pay D’s bill if D does not or cannot pay.
a. The promise of T can be enforced against him by C
because the food sale was evidence by the bill issued by C to
D.
b. The promise of T can be enforced against him by C
because the food sale was less than P500.00.
c. The promise of T cannot be enforced against him
by C because it was not in the form required by law to be
enforceable.
d. The promise of T can be enforced against him by C
because D already benefited from the contract of sale.
98. S sold his lot consisting of 1,000 square meters to B.
However, the deed of sale signed by the parties showed a total
area of 1,200 square meters due the secretary’s mistake. Later,
S discovered the mistake. What remedy is available to either
party?
a. Annulment
b. Reformation
c. Rescission
d. Declaration of nullity of the contract.
99. On August 1, 2015, Samonte sent a letter to Benavidez. In the letter,
Samonte offered to sell his house and lot located at Green Valley
Subdivision for P1,200,000.00 cash and stated that the acceptance had
to be received by Samonte not later than August 15, 2015. Benavide
sent his acceptance on August 10, 2015 but due to the delay in the mails,
Samonte received the letter of acceptance on August 18, 2015.
a. The contract between Samonte and Benavidez was
perfected on August 10, 2015.
b. The contract between Samonte and Benavidez was
perfected on August 15, 2015.
c. The contract between Samonte and Benavidez was
perfected on August 18, 2015.
d. No contract was perfected between Samonte
and Benavidez.
100. Sermonia Agri-Products, a supplier of “ZZ” fertilizer, offered in
writing to sell to Barbados Farms, 50 bags of the fertilizer at the price of
P100.00 per bag. The offer stated that the price would be good for one
week during which Barbados Farms may decide to accept the offer.
Three days later and before Barbados could make any acceptance, the
general market price went up. Sermonia attempted to revoke the offer
by informing Barbados, but Barbados claimed Sermonia could not do
so.
a. Sermonia may withdraw the offer by just
informing Barbados since there has not yet been any
acceptance thereof.
b. Sermonia may not withdraw the offer since the one-
week period within which Barbados may decide had not yet
lapsed.
c. Sermonia may withdraw the offer only after the
expiration of the one-week period, unless Barbados in the
meantime has accepted the offer.
d. Sermonia may withdraw the offer because it would
suffer a loss if the sale was allowed to push through.
101. D obtained a loan of P1,000,000.00 from C. To secure the debt, D
executed deed of mortgage covering tw of his lots, Lot A and Lot B, each
of which is in the name of D in the certificate of title. The mortgage of Lot
A was recorded within one week in the Office of the Register of Deeds,
but that of Lot B could not be processed as other documents were being
required by the Register of Deeds. In the meantime, D sold Lot A to X,
and Lot B to Y. X knew nothing on the mortgage of Lot A, but Y was
aware of the mortgage of Lot B.
a. Both X and Y are bound by the mortgage on the
lot sold to each of them.
b. Both X and Y will not be bound. In the case of X, he
knew nothing of the mortgage. In the case of Y, the mortgage
was not registered.
c. X is bound by the mortgage of Lot A. Y is not bound
by the mortgage of Lot B.
d. X is not bound by the mortgage of Lot A. Y is bound
by the mortgage of Lot B.
102. B obtained delivery from S of a Nikkon camera and an
unlicensed revolver which he purchased from the latter at the
rice of P1,500.00 and P5,000.00, respectively. No written
agreement was signed by the parties to keep the contract a
secret.
a. The sale of the camera is unenforceable because it
was not in writing, while that of the revlver is void because the
object is illegal.
b. The sale of the camera is valid and enforceable,
while that of the revolver is void.
c. The sale of both the camera and the revolver is valid
because the parties are bound by their secret agreement.
d. The sale of both the camera and the revolver is void
because the contract is indivisible.
103. Which of the following contracts is valid and enforceable?
a. A contract of sale between S and B, both of legal
age, of a computer worth P20,000.00. No document was
signed by the S, the seller, and B, the buyer who has given
a down payment of P4,000.00. S is set to deliver the
computer upon full payment of the price.
b. A contract of lease between S, 16, and B, 25. The lease
which was in writing and signed by both parties, had for its object a
drilling equipment, and had a duration of 3 years. The drilling equipment
is now in the possession of B who has paid the rental of P1,000.00 for
the first month to S.
c. A contract of donation of a lot between S,30, and B, 24. The
donation and the acceptance are in a private document. B has since
occupied the lot.
d. A 6-month contract for the supply of carabao meat by S to
B. Although the slaughter of carabao is prohibited by law, the contract
is now on its third month and S has made the carabao meat deliveries
worth P30,000.00.
104. P, the owner of a certain business, instructed A, his agent and
manager of the business to buy goods on credit from S. S issued a sales
invoice where A acknowledged the receipt of the goods by signing
thereon. P called S by phone and promised to S that he (P) would pay
for the goods on the due date. S was not paid on the due date.
Accordingly, he sued P for the price of the goods. P raised the defense
of unenforceability under the Statute of Frauds claiming that a
representation as to credit must be in writing.
a. The promise is enforceable against P although it
was not in writing.
b. The promise is unenforceable against P because it
was not in writing.
c. The promise is enforceable against A because it was
he who signed the invoice.
d. The promise may be enforced both against P and A
since they are the debtors in the transaction.
105. The following contracts, all of which are executor and not
in writing, are presented to you for evaluation:
I. Sale of a price of land for P50,000.00.
II. Sale of a computer for P20,000.00.
III. Lease of a delivery truck at P1,000.00 per month for
2 years.
In your evaluation of the foregoing contracts:
a. I and II are enforceable.
b. II and III are unenforceable.
c. I and III are unenforceable.
d. All contracts are unenforceable.
106. The following are characteristics of certain contracts:
I. Nominate
II. Real
III. Aleatory
IV. Commutative
A contract for the sale of a sweepstakes ticket is considered as:
A. I and II.
B. I and IV.
C. I and III.
D. III and IV.
107. Which of the following does not apply to a relatively
simulated contract?
a. The parties are bound by their real agreement.
b. The parties are not bound at all.
c. The parties are bound by their ostensible agreement
if the real agreement prejudices third persons.
d. The parties are bound by their ostensible agreement
if the real agreement is contrary to law, morals, good customs,
public order and public policy.
Answer: B
108. The following contracts are presented to you:
I. A contract where one of the parties gave his
consent in a state of drunkenness.
II. A contract where one of the parties gave his
consent during a hypnotic spell.
III. A contract where both parties employed fraud
to obtain the consent of the other party.
IV. A contract where one of the parties gave his
consent because the other party threatened to sue him.
In your evaluation of the foregoing contracts, which of the said
contracts are not voidable?
a. I and II.
b. I and III.
c. II and III.
d. III and IV.
109. S placed an advertisement in the Manila Bulletin as follows:
“INVITATION TO BID: For sale, house and lot located at No. 120 Roxas
Boulevard, Manila.” Three persons submitted their bids as follows: A, P2
million; B, P2.5 million; and C, P3 million. After studying the bids, S
awarded the contract to B. C complained claiming that the contract
should have been awarded to him since he was the highest bidder.
a. The award of the contract to B is not valid because
he was only the second highest bidder.
b. The contract should have been awarded to C
because S, as the advertiser, was bound to accept the highest
bidder.
c. S was not bound to accept the highest bidder
because advertisements for bidders are mere invitations to
make proposals, unless the contrary appears.
d. The contract should have been awarded to C
because his bid was the most advantageous to S.
110. When a physician who takes improper advantage of his
power over the will of his patient in order to get the latter’s
consent to a contract between the two of them, the contract will:
a. likely be voidable because of intimidation.
b. still be valid because the patient is merely returning
the favour to his physician who takes care of his health.
c. likely be voidable because of undue influence.
d. be void because of unlawful service.
111. These statements are presented to you for evaluation:
I. Payment of option money by the buyer
reduces the purchase price that he will pay to the seller in case
he accepts the offer.
II. Payment of earnest money will make an oral
sale of an immovable enforceable.
In your evaluation of the said statements:
a. Both are true.
b. I is true; II is false.
c. Both are false.
d. I is false; II is true.
112. Casimiro filed against Delgado a complaint which sought to collect
Delgado’s debt of P200,000.00 and attach Delgado’s lot located at No.
120 Lepanto Street, Sampaloc, Manila. The court accordingly issued the
writ of attachment on the property against Delgado. While the case was
pending, Delgado sold his lot located at No. 95 Scout Albano Street,
Quezon City. Torres, another creditor of Delgado, now questions the
sale as fraudulent and seeks to rescind it.
a. Torres may not question the sale because it was not
he but Casimiro who obtained the writ of attachment against
Delgado.
b. Casimiro may not question the sale because it
referred to a lot which was not the object of attachment.
c. Either Torres or Casimiro may question the sale.
d. Neither Casimiro nor Torres may question the sale.
113. The following contracts are presented to you for evaluation:
I. Pledge
II. Commodatum
III. Sale
IV. Donation of an immovable.
The real contracts among the four contracts enumerated are:
a. I and II
b. II and III
 c. I and III
d. II and IV
114. The following cases are presented to you:
I. S informed B that the house S was selling was
never infested by termites. The truth, however, was that S had
the house treated for termites 3 months before. B bought the
house believing in the words of S.
II. S sold to B 10 bags of cement which were
scheduled for delivery one week from their scheduled
agreement. On delivery, S delivered t B 10 bags that contained
a mixture of cement and pulverized rocks.
In your evaluation of the above cases, the fraud employed by S
rendered voidable:
a. The contract of sale in Case I only.
b. The contract of sale in both cases.
c. The contract of sale in Case II only.
d. Neither of the two contracts.
115. The following statements are presented to you:
I. The illegality of the motive of a party to a
contract renders the contract void.
II. The motive of one party to a contract is always
known by the other party.
In your evaluation of the foregoing statements:
a. Both are true.
b. Both are false.
c. Only I is true.
d. Only II is true.
116. On March 5, 2014, Orlando and Timoteo entered into a written
contract of lease whereby Orlando as lessor leased the third floor of his
building to Timoteo, lessee. The contract provides, among other terms
and conditions, the following: (a) The lessee shall give a rental deposit
of two months amounting to P40,000.00; and pay an advance rental of
one(1) month amounting to P20,000.00 upon the execution of the
contract; (b) The lessor shall keep the leased premises in tenantable
condition throughout the period of lease which is from April 1, 2014 to
March 31, 2016; (c) At the end of the lease period, the lessor shall return
the rental deposit to the lessee less any amount of damage that may be
caused on the leased premises by the lessee.
Timoteo, pursuant to the contract, gave both the rental deposit and
advance rental to Orlando upon the execution of the contract.
The contract between Orlando and Timoteo is:
a. Bilateral, nominate, onerous and commutative.
b. Bilateral, innominate, onerous and aleatory.
c. Unilateral, nominate, gratuitous and commutative.
d. Unilateral, innominate, onerous and commutative.
117. Assume the same facts in No. 172 except that the contract
was entered into orally between Orlando and Timoteo. In such
a case, the contract between the parties is:
a. unenforceable.
b. voidable.
c. rescissible.
d. valid and enforceable.
118. The efficient cause in the obligations in No. 172 is the:
a. lease period of two (2) years.
b. contract of lease between Orlando and Timoteo.
c. Obligation of Timoteo to give the rental deposit and
the one (1) month advance rental.
d. obligation of Orlando to keep the leased premises in
tenantable condition throughout the period of the lease, and to
return the rental deposit upon the expiration of the lease.
119. D borrowed P50,000.00 from C. The debt, which is payable within
one year, is secured by a mortgage that D constituted on his lot. The
mortgage s recorded in the Registry of Property. C dies before the due
date of the debt and was not able to collect any amount of his loan
receivable from D. He was survived by S, his only son and heir. D, taking
advantage of the situation, sold the lot to T who was not aware of the
mortgage constituted thereon.
a. The mortgage is not binding on T since he was not
aware of it at the time he bought the lot.
b. S, the son of C, has the right to collect the
amount of the note from D, and foreclose the mortgage if D
cannot pay.
c. The mortgage is not binding on T since D was in bad
faith when he sold the lot to T.
d. The right to collect the loan was extinguished upon
the death of C.
120. B entered into a contract for the purchase of 5 rolls of cloth worth
P20,000.00 from S. The materials which were to be used by B in the
making of school uniforms, were scheduled for delivery within 7 days.
On the seventh day, S failed to deliver the cloth despite the demands
from B. As a result, B could not meet his commitment to his customers
and was threatened with a court suit. S claimed that M from whom he
ordered the cloth under a contract that he (S) and M entered into, did
not finish manufacturing the product as scheduled in accordance with
the terms of such contract. In this case, B may not sue M for damages
under the contract between S and M under which principle of contract?
a. Principle of Liberality of Contract.
b. Principle of Relativity of Contract.
c. Principle of Consensuality of Contract.
d. Principle of Obligatory Force of Contract.
121. The following contracts are presented to you:
I. A contract of sale involving 100 sacks of rice
entered into by G, a guardian, in behalf of M, his ward. The rice
was worth P100,000.00 but was sold by G for P85,000.00.
II. A contract of sale made by D of his only lot to
X in order to defraud C, his creditor. X was not aware of the
fraudulent intention of D when he sold the lot to him.
III. A contract of sale made by D to X of jewelry
which C is trying to recover in a court case he filed against D. X
was not aware that the jewelry was the subject of litigation
between C and D.
In your evaluation of the foregoing contracts:
a. Contracts I and II are rescissible.
b. Contracts I and III are rescissible.
c. Contracts II and III are rescissible.
d. None of the above contracts is rescissible.
122. Which of the following contracts is not a void contract?
a. A contract of sale of an animal suffering from a
contagious disease.
b. A purchase of an illegitimate child by one who is the
father of the child.
c. A contract of insurance whereby the insured
asked another to take his place during the medical
examination.
d. A contract between F, a Filipino and A, an alien for
the purchase of the right kidney of F for P200,000.00.
123. An aleatory contract is one:
a. the fulfilment of which depends upon chance.
b. the parties of which are obliged to perform reciprocal
prestations.
c. where only one party actually and physically enters
into the contract.
d. where delivery of the object is required to be made
for its perfection.
124. Zenith Cars Corporation (Zenith) engaged the services of
Stronghold Construction Corporation (Stronghold) for the construction of
its showroom. For this purpose, Stronghold bought construction
materials on a 60-day credit from Durable Materials Corporation
(Durable). On due date, Durable demanded payment from Stronghold
but the latter contended that it could not make any payment because it
has not collected from Zenith. In this case:
a. Durable can hold liable Stronghold only.
b. Durable can hold liable Zenith only.
c. Durable can hold liable both Stronghold and Zenith.
d. Durable cannot hold liable neither Stronghold nor Zenith.