ABE International College of Business and Accountancy

Tacloban Campus, Tacloban City

SALES, AGENCY, LABOR AND OTHER COMMERCIAL LAWS

MIDTERM
MF / 9:00 – 10:00 am

1. S sold to A in a memorandum of agreement of the sale of his parcel of land. After a week, S sold the same land to B
in a formal deed of sale. Upon buying the land, B who was aware of the sale to A, immediately took possession thereof
and registered the sale in his favor. When informed of the second sale, A subsequently registered an adverse claim
with the Registry of Deeds. The parcel of land shall belong to:
a. A because he has the older title
b. B because the sale to him was in a formal deed of sale
c. B because he first registered the sale in his favor
d. B because he was the first possessor of the land.

2. A buys form B a piece of land supposed to contain 1,000 sq. m at the rate of 10,000.00 per sq. m. But the land actually
contains 1,500 sq. m. Which of the following is not included in the right s of A?
a. A may demand the delivery of the entire land with proportionate increase of the price
b. A may reject the excess of 500 sq. m and accept only the 1,000 sq. m
c. A may rescind the contract of sale because what was delivered is not in accordance with the contract
d. None of the above

3. A buys a land from B at the lump sum of P1M. In the contract the area is stated to be 1,000 sq. m. The boundaries were
mentioned in the contract. It was discovered, however, that the land within the boundaries really contains 1,500 sq.
m. Which of the following is not a right of A?
a. A may demand the delivery of all the 1,500 sq. m without any price increase
b. If B refuses to deliver to all the 1,500 sq., m A may demand proportionate reduction in the price
c. A may rescind the contract of sale if B does not deliver all that is included in the boundaries
d. A may treat the contract as void ab initio because the object is not determinate to its kind

4. S1 Warranty against eviction as well as against hidden defect may waived by the vendee provided the vendor in
good faith

S2 Waiver intencionada on the part of the vendee will absolutely exempt the vendor from liability
a. a. Both statements are false c. First is false, second is true
b. b. Both are true d. First is true, second is false

5. In waiver consent there is no warranty against eviction but the seller is still liable to pay the value of the thing at the
time of eviction if it takes place.
a. a. Both statements are correct c. First is correct, second is incorrect
b. b. Both are incorrect d. First is incorrect, second is correct

6. S1 In case eviction takes place the sellers are obliged to return to the buyer the price he paid for the thing sold.

S2 In case the thing is lost due to its hidden defect, the vendor shall return to the vendee the value at the time of loss.
a. a. Both statements are true. c. First is false, second is true.
b. b. Both are false. d. First is true, second is false.

7. S1 In the sale of goods, if the seller delivers more than the quality agreed upon, the buyer may rescind the Contract of
sale.

S2 The seller shall have the right of legal redemption only if this right has been agreed upon between the sellers and
the buyer.
a. a. Both statements are true, second is false. c. First is false, second is true.
b. b. Both are true. d. First is true, second is false.

8. Three of the following are the remedies of the buyer in case of the breach of warranty by the seller. Which is not
included?
a. Accept or keep the goods and set up the breach of warranty by way or recoupment or extinction of the price
b. Rescind the contract of sale and refuse to accept the thing or if already delivered refuser to return the same
c. Accept or keep the goods and claim damages for the breach of warranty
d. Refuse to accept the goods and claim damages for the breach of warranty

9. S1 In the sale of immovable property, if it has been stipulated that upon failure to pay the price at the time agreed
upon, the rescission of the contract shall of right take place, the vendee may still pay despite the demand for rescission

S2 In the sale of movable property, the rescission of the sale shall of right take place if the vendee, upon the expiration
of the period fixed for the delivery of the thing, should not have appeared to receive it, or having appeared he should
tender the price
a. a. Both statements are correct. c. First is incorrect, second is correct
b. b. Both are incorrect d. First is correct, second is incorrect

10. S sold to B his dog which he knew was afflicted with a disease. The parties agreed that there is no warranty against
hidden defect. After, delivery, the dog was struck by lightning and thus died.
 a. S is not liable to pay B any amount because the dog was loss due to fortuitous event
b. S is not liable because of the waive agreed upon between B and himself
c. S is not liable to return the price paid by B because the waiver is void
d. S is liable for the price less the value of the dog at the time of loss.

11. On June 1, 2006 S sold to B 50 units of machines which were scheduled to arrive from Japan. The sale was evidenced
by an invoice identifying each machine by serial number. Each machine was priced at 10,000.00. Unknown to the
parties, 30 units were damaged beyond repair by seawater on May 31, 2006. Based on the foregoing, which of the
following statements is incorrect?
a. B may rescind the whole contract
b. B may demand delivery of the remaining 20 units and pay the price therefore
c. S may require payment of the whole shipment from B since S was not aware of the damage caused on the machines
at the time of sale
d. S has no option to rescind the whole contract or require payment of the remaining 20 units

12. This refers to the warranty of the seller that he has the right to sell the thing at the time when ownership is to pass, and
which can be enforce if the buyer is deprived of the property sold by a final judgment in court
a. Warranty against hidden defects. c. Warranty against evection.
b. Warranty of merchantable quality. d. Warranty of possession.

13. It is an affirmation of fact or any promise by the seller relating to the thing which has a nature tendency to induce the
Buyer to purchase the same, relying on such promise or affirmation.
a. Condition b. false representation c. Warranty d. Seller’s talk

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

15. The redhibitory action based on the faults or defects animals must be brought within
a. 30 days from the delivery to the vendee c. 45 days from the delivery to the vendee
b. 40 days from the delivery to the vendee d. 6 months from the delivery to the vendee

16. The right of the seller to stop the goods in transit upon discovering that the buyer does not have the funds to pay for
the goods
a. pre-emptive right c. voting right
b. appraisal right d. right of stoppage in transitu

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

18. Using the preceding number where the seller is no longer liable
a. waiver intencionada c. waiver cursunada
b. waiver consciente d. waiver inocente
19. B imported radios from Japan and asked for 220 volts capacity. The radios arrived clearly labeled 220 volts and B sold
them to the public as such. Later a customer complained that the radios have been mislabeled by the manufacturer
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 B because B specially asked for 220 volts

20. 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

Prepared by:

Nikki V. Bucatcat, CPA

Instructor