BUSINESS LAW TESTBANKS / REVIEWERS
An obligation subject to the happening of a future
1. On September 21, 2010, Piolo agreed to sell his
only carabao to Sam and Sam agreed to pay the price
of P25,000 if Sam will pass the October 2010 CPA
Examination. The list of successful examinees was
released on October 21, 2010 and Sam is one of those
who passed the examination. As a result,
a.Piolo is entitled to the P25,000 price plus interest
beginning September 21, 2010.
b.Sam is entitled to the carabao and its fruits
beginning September 21, 2010.
c. Sam is entitled to the carabao beginning
September 21, 2010 and to its fruits beginning
October 21, 2010.
d.Piolo shall deliver the fruits of the carabao and
Sam shall pay the interest on the price beginning
September 21, 2010.
2. The following are elements of an obligation, except
a.Active and passive subjects
b.Efficient cause
c. Prescription
d.Vinculum
3. A, B, and C owe W, X, Y, and Z the sum of
P120,000. If the obligation is due, which of the
following is not correct?
a.A is liable only for a total of P40,000.
b.W can only collect P10,000 from C
c. B can be required to pay P40,000 to any of the
creditors
d.Y can only collect a total of P30,000
4. The following pertains to facultative obligations,
except:
a.Comprehends only one object or prestation which
is due
b.Choice pertains only to the debtor
c. Fortuitous loss of all prestations will extinguish the
obligation
5.
and certain event is
a.Conditional obligation
b.Suspensive conditional obligation
c. Resolutory conditional obligation
d.Obligation with a period
6. S1: The debtor shall lose the right to make use of
the period when he does not furnish any guaranty or
security to the creditor.
S2: In an obligation subject to a suspensive period,
what is suspended is birth of the obligation.
a.True;true b. true;false
c. false;false d. false;true
7. Which of the following is not a generic obligation?
a.Obligation to pay P1,000,000
b.Obligation to deliver 1999 Nissan Sentra Series III
c. Obligation to deliver 50 cavans of rice
d.Obligation to give a delimited generic object
8. “I will give you my car provided that if I like to have
it back, you will return the same to me.”
a.The obligation is void, because the fulfillment
depends upon the will of the debtor.
b.The obligation is void, because the fulfillment
depends upon the will of the creditor.
c. The obligation is valid because the condition
merely causes the loss of rights already acquired.
d.Both A and B.
9. S1: Dog obliged himself to give Cat a specific car
tomorrow. If Dog failed to deliver tomorrow after
demand is made, Cat may compel Dog to do his
obligation and may ask for damages.
S2: Darna obliged to deliver a car to Captain Barbel
tomorrow. If Darna failed to deliver tomorrow after
demand is made, Captain Barbel’s right is to ask a third
person to deliver a car to him at the expense of Darna
plus damages.
a.Both statements are true.
b.Both statements are false.
10. Which of the following is not a conditional c. The negligence of the defendant is only an incident
obligation? in the performance of the obligation.
a.D to give C P1,000 if C passes the examination. d. The source of liability is the negligent act of the
b.D to pay C P1,000 if he has the means. person causing damage to another.
c. D to give C a horse if C marries X.
d.D is to use C’s car until C returns from Davao. 15. S1: When one of the parties has brought an action
to enforce the contract, he cannot subsequently ask
11. It is the voluntary administration of the property of for its reformation.
another without his consent. S2: The injured party may seek rescission even after he
a.Negotiorum Gestio c. Quasi-delict has chosen the fulfillment of the obligation if the latter
b.Solutio Indebiti d. Contract should become impossible.
a. True; true b. true;false
12. A, B and C are solidary debtors of X and Y, solidary c. alse;false d. false;true
creditors, for P60,000. X makes a demand to A but the
latter paid Y. In here, the obligation is not extinguished. 16. S1: An oral sale of land made by its owner is
A and B solidary debtors of X, Y and Z, solidary unenforceable.
creditors. X demands payment from A, but B, upon S2: Sale of land made by an agent without written
whom no demand is made paid Z the entire obligation. authority from owner thereof is void.
In here, the obligation is totally extinguished. a. False;false b. false;true c.
a.True;true b. true;false true;true d. true;false
c.false;false d. false;true
17. S1:The principle of autonomy of contracts means
13. Elmo is obliged to give Bert, either a ring worth that the contracting parties as a rule may agree upon
P5,000; or bracelet worth P4,500; or a watch worth any stipulation, clause, term and condition.
P4,000. All the objects were lost due to Elmo’s fault in S2: Relativity of contracts means that contracts take
the order stated. effect not only between the parties but also their heirs
a.Elmo’s obligation is extinguished. and assigns.
b.Elmo’s obligation is to pay the value of the ring a. False;false b. true;true c.
plus damages. false;true d. true;false
c. Bert’s right is to demand the value of any of the
objects plus damages. 18. It is an obligation which is based on positive law
d.Elmo’s obligation is to pay the value of the watch and gives right to enforce its performance
plus damages. a. Natural obligation c.
Moral obligation
14. Culpa aquiliana as distinguished from culpa b. Civil obligation d. legal
contractual: obligation
a.Proof of due diligence in the selection and
supervision of employees is not considered a
defense. 19. Which of the following is demand necessary to
b.Proof of the contract and its breach is sufficient to make the debtor in delay in the performance of his
warrant recovery. obligation?
a. When the time of performance is of the essence
b. When the time of performance has been stipulated
c. When the law so provides
d. When demand would be useless
20. Liability for damages in the performance of an
obligation arises from the following, except
a. Negligence c.
Delay
b. Acts or omissions punished by law d.
Fraud
21. Liability for damages arising from fraud is
demandable and there can be a waiver of an action for
past fraud.
There can be a waiver of an action for future
negligence but not fraud.
a. Both statements are false c.
First is true, second is false
b. Both are true d. Second
is true, first is false
22. Delia borrowed from Celia a sum of money with a
stipulated rate of interest to be paid in three equal
monthly installments from January to March. Delia
paid an amount for which the latter issue a receipt
stating that the payment is for the month of February.
In this case,
a. The installment for the month of March is also
considered paid.
b. The installment for the month of January is
conclusively presumed to have been paid.
c. The installment for the month of January is
distributably presumed paid.
d. The installment for the month of January is not
presumed paid.
23. A obliged himself to deliver the cans of powdered
milk of B from his warehouse in Pangasinan to Manila.
While his truck was traveling on the North expressway,
it was hi-jacked by a band of robber who also took the
cans of milk belonging to B. Is A liable for the loss of
the goods?
a. No, because they were generic things and as they
cannot be lost.
b. Yes, because he was in possession of the same at
the time of the loss and therefore presumed at fault.
c. Yes, because there was no stipulation exempting
him from loss in case of fortuitous event.
d. No, because the loss was due to fortuitous event.
24. A, B and C bound themselves to deliver to X a
specific car worth P3M. Due to the fault of A, the car
was lost. In this case
a. X can claim damages from any one of the three for
his proportionate part of liability because the
obligation is indivisible.
b. X can claim only from A the whole amount of
damages other than the value of the car.
c. Since it is solidary liabilities for damages, X can
claim the same from any of the three.
d. Only A is liable for damages although B and C are
liable for their respective shares in the obligation.
25. Dennis owes Cart P1M. Xanabelle, without the
knowledge or against the will of Dennis paid Cart P2M.
Can Xanabelle get reimbursement from Dennis?
a. P2M by way of reimbursement from Dennis to
prevent unjust enrichment on the part of Dennis at the
expense of Xanabelle.
b. P1M only for that is the extent of benefit of
Dennis.
c. No reimbursement because the payment was not
proper being without the knowledge or against the will
of Dennis.
d. P1M plus interest from the time of payment until
reimbursement.
26. Payment made by a third person is valid to
extinguish the obligation of the debtor to the creditor
in the following cases, except
a. After payment to the creditor, the third person
acquires the creditor’s right
b. When the creditor ratifies the payment to the third
person
c. When through the creditor’s conduct, the debtor a. Rescissible
was led to believe that the third person had authority c. Unenforceable
to receive payment b. Voidable
d. When the third person is subrogated to the rights d. Void
of the creditor.
31. A defective contract because it is entered into in
27. Sister offered his car to Brother for P1M and giving the name of another without or in excess of authority,
the latter one week to decide. Brother in turn gave or it is verbal is
Sister P1,000. In this case, there is a. Unenforceable c.
a. Contract of sale of the car with the P1,000 as Void
earnest money b. Voidable
b. Contract of option with the P1,000 as option d. Rescissible
money
c. Contract to sell of the car at B’s option 32. The following even if not in public instrument are
d. Contract to sell of the car at S’s option valid, binding and enforceable except
a. Negotiable instruments
28. Anmony advertised in the newspaper his parcel of b. Sale of land, either by the owner or agent with
land wanting to sell the same for P1M. Boy personally written authority
went to the former with cash in hand to buy the c. Agency, pledge, mortgage
subject parcel of land. In this case, d. Partnership contract wherein immovables are
a. Anmony cannot anymore reject Boy as buyer of his contributed
land
b. Anmony can still reject Boy as an offered in the 33. Aguilar sold to Beddie his dog with the agreement
purchase of land that delivery shall be after one week from sale and the
c. Anmony can reject the offer of Boy unless he payment of the price after two weeks from delivery. If
properly consigns with the court his payment for the the dog shall produce offspring, it shall belong to:
land a. If produced before the sale, it shall pertain to the
d. Anmony cannot evade his obligation as seller to seller
Boy b. If the puppy shall exist before the actual delivery, it
shall pertain to the seller
29. The contract entered into by the persons who c. The fruits that shall exist after delivery will only be
cannot give consent is the ones to pertain to the buyer
a. Void ab initio because actually there is no consent d. The fruits after the sale but before delivery shall
b. Unenforceable only because the contract may be pertain to the buyer if so stipulated by the parties to
ratified the sale
c. Rescissible because of the damage caused to the
person incapacitated 34. A sold B’s car in B’s name to C without any
d. Voidable as there is consent although vitiated or authority from B. The contract of sale is
defective a. Rescissible b. Voidable c.
Unenforceable d. Void
30. A defective contract where damage or lesion is
essential is
35. With written authority from his principal, the agent obligation with the knowledge and consent of the
sold verbally the land of the principal. The sale is debtor?
a. Rescissible b. voidable c. 1st answer – He can recover from the debtor the entire
unenforceable d. Void amount, which he has paid.
2nd answer – He subrogated to all of the rights of the
36. A, as agent of P with oral authority, sold P’s land in creditor.
public instrument. The sale is a. Both answers are correct. c.
a. Rescissible b. voidable c. Only the first is correct.
unenforceable d. Void b. Both answers are wrong. d.
Only the second is correct.
37. A, agent of P, in excess of authority, entered into a
contract in the name of P with X who knew of the lack 41. Indivisibility as distinguished from solidarity.
of authority and P did not ratify the contract. The a. Plurality of subject is indivisible.
contract is b. When the obligation is converted into one of
a. Rescissible b. voidable c. indemnity for damages because of breach, the
unenforceable d. Void character of the obligation remains.
c. Refers to the legal tie or vinculum.
38. S sold his car to B. No agreement was made on the d. Refers to the prestation which constitutes the
time and place of delivery and payment. Hence object of the obligation.
a. The time and place of delivery shall be at the time
and place of payment of the price 42. Demand is not needed to put the debtor in default,
b. The time and place of delivery and payment not except
having been agreed upon, the sale shall be void a. When demand would be useless
c. The seller may demand payment first before b. When the parties so stipulate
delivery of the thing sold c. When the time is of the essence
d. The buyer may demand delivery first before d. When the fixing of the time is the controlling
payment motive for the establishment of the contract

39. A owes B P20,000 which became due and payable
last June 23, 2010. On that date, A offered B P10,000,
the only money he then had, but B refused to accept
the payment. A, thereafter met C, B’s 23 year old son,
to whom he gave the P10,000 with the request that he
turn the money over to B. The money was stolen while
C’s possession. How much may B still recover from A?
a. P20,000 c.
P15,000
b. P10,000 d. P -0-
43. Culpa aquiliana as distinguished from culpa
contractual
a. Proof of due diligence in the selection and
supervision of employees is not available as a defense
b. Proof of the contract and of its breach is sufficient
prima facie to warrant recovery
c. The negligence of the defendant is merely an
incident in the performance of the obligation
d. The source of liability is the defendant’s negligent
act or omission itself

40. If a third person pays an obligation. What are the 44. A passenger on a truck was hurt but in a criminal
rights, which are available to him if he pays the case against the driver, said driver was acquitted. The
victim now sues the owner of the truck for culpa 2. The period for payment is extended form 3 years
contractual. May the suit still prosper? to 5 years.
a. No, this will constitute double jeopardy a. True; true b. true;false
b. No, the acquittal means that the guilt of the c. false;true d. false;false
accused was not proven by proof beyond reasonable
doubt 50. This is a real defense
c. Yes, it is sufficient for him to prove the existence of a. Fraud is inducement
the contract of carriage and the injuries suffered b. Want of consideration
d. Yes, provided he can prove the negligence of the c. Want of delivery of an incomplete instrument
driver d. Duress in the absence of physical pressure

45. If the obligor binds himself to perform his
obligation “ as soon as he shall have obtained a loan”
from a certain bank. This obligation is
a. With a term c. with a period
b. With a suspensive condition d.with a resolutory
condition
46. An action to impugn the acts of a debtor intended
to defraud the creditor is
a. Accion reivindicatoria c. accion redhibitoria
b. Accion subrogatoria d. accion pauliana
47. A owes B P11,000 due on July 2, 2010. B owes A
P6,000 due on July 3, 2010 and P4,000 due on July 10,
2010. B owes C P11,000 due on July 3, 2010. On July 2,
2010 B cannot pay C so B assigns to C her credit of
P11,000 against A, without the knowledge of A. On July
10, 2010 C tries to collect from A the P11,000. How
much can C compel A to pay?
a. P11,000 c. P5,000
b. P9,000 d. P1,000
51. This contract is without effect unless ratified
a. Marriage between first degree cousins
b. Contract of sale between two insane persons
c. Contract of sale between a guardian and his ward
d. Donation between husband and wife
52. Dacion en pago as distinguished from sale
a. The cause is the price
b. The object exists and is specific
c. There is no pre-existing obligation
d. There is a greater degree of freedom in fixing the
price
53. A contract as a rule must be in writing to be valid.
A taxpayer is not entitled to interest in the
overpayment of tax subject of a refund because an
obligation derived from law is not presumed.
a. Both statement s are true
b. Both are false
c. First is false, second is true
d. Second is false, first is true

48. If the obligation of the debtor is “I will pay you my 54. S1: As a general rule, the extrajudicial expenses
debt after I have arrived from abroad.” The obligation required by the payment shall be for the account of
is the creditor.
a. Valid c. voidable
b. Void d. unenforceable S2: If there is no stipulation and the thing to be
delivered is specific, the place of payment shall be the
49. There is novation of the obligation if domicile of the debtor.
1. The period for payment is shortened from 5 years a. True;true b. true;false
to 3 years. C. false;true d. false;false
 59. Simon offers to sell his house to Pedro for
55. S1: Consignation without tender of payment is P200,000. Pedro asks him if he would accept P185,000.
sufficient if two or more persons claim the same right 1st: Because of ambiguity, both offers are terminated
to collect. by operation of law.
2nd: Pedro’s response is a more inquiry, the P200,000
S2: When the debt of a thing certain proceeds from a offer by Simon is still in force.
criminal offense, the debtor shall be exempted from a. True;true b. true;false c.
the payment of the price of the thing is lost through a false;true d. false;false
fortuitous event.
a. Both statements are true. 60. Debtor’s fault in real obligation is called
b. Both statements are false. a. Mora accipiendi
c. S1 is true; S2 is false. b. Mora solvendi ex-re
d. S1 is false; S2 is true. c. Mora solvendi ex-persona
d. Compensation-morae
56. S1: The party may recover, if public interest will be
subserved, money or property delivered by him for an 61. ) In order to amend the corporate by-laws, what
illegal purpose, provided that he repudiates the vote is required to happen? 
contract before the purpose has been accomplished.
a.) 2/3 votes of the Board of Directors and 2/3 votes
S2: If an illegal contract constitute a criminal offense
of the outstanding capital stockanding capital stock b)
and both parties are guilty, both shall be criminally Majority votes of the Board of Directors and 2/3 votes
prosecuted but they may keep the object of the of the outstanding capital stock c) 2/3 votes of the
contract. Board of Directors and majority vote
a. True;true b. true;false c. b.) Majority votes of the Board of Directors
false;false d. false;true and majority votes of the outstanding capital stock

c.) 2/3 votes of the Board of Directors and majority

57. The meeting of minds manifests consent after the
votes of the outstanding capital stock
acceptance upon the thing and the cause which are to
constitute the contract. Which of the following d.) Majority votes of the Board of Directors and 2/3
constitute a definite offer? votes of the outstanding capital stock
a. An offer made through an agent.
b. Business advertisements of things for sale.  
c. Advertisements for bidders.
62.) Ondoy pledged his motor bike to Peping for
d. None of the above.
P5,000.00. When Ondoy failed to pay his obligation,
Peping sold the motor bike at public auction to the
58. S1: If the cause is not stated in the contract it is highest bidder for P4,000.00. Therefore:
presumed that it is lawful.
S2: The action for rescission in subsidiary; it cannot be  
instituted except when there is no other legal means
to obtain reparation for damages suffered. a.) Peping can recover P1,000.00 from Ondoy if it is
a. Both are true c. Only 1st is true stipulated
b.) Peping cannot recover P1,000.00 from Ondoy
b. Both are false d. Only 1st if false
even if there is stipulation
c.) Peping can recover P1,000.00 from Ondoy even
without stipulation
d.) Peping cannot recover P1,000.00 from Ondoy
unless stipulated that he can
63.) Dacion en Pago differs from a Sale in the sense
that in latter
 a.) the obligation is extinguished once the offer is
accepted
b.) there is less freedom in the determination of the
price of the object
c.) the cause of the contract is the price
d.)there is pre-existing credit between the parties
 
64. Which of the following statements is false?
 
a.) Obligations arising from contracts have the force of
law between the contracting parties and must be
complied with in good faith.
b.) Fraud committed in the performance of an
obligation gives the injured party the right to annul the
contract.
c.) Not only the parties, but their heirs and assigns
are bound by their contract.
d.) Generally, the debtor is not liable for the non-
performance of his obligation due to fortuitous event.
 
65. Which of the following is a mode for the
extinguishment of agency?
a.) Death of the principal without the knowledge of
the agent
b.) Filing of a monetary claim by the agent against his
principal
c.) Revocation by the agent
d.) Partial accomplishment of the agency
 
66. A Corporation may be dissolved voluntarily or
involuntarily based on several causes. Which of the
following is a cause for the automatic dissolution of a
corporation?
a.) Failure to file the required report to the Securities
and Exchange Commission
b.) Failure to continue the business for at least five (5)
years
c.) Failure to formally organize and commence
business within two years from the issuance of the
certificate of incorporation
d.) Failure to file its corporate by-laws with the
Securities and Exchange Commission within thirty days
from the issuance of the Certificate of incorporation
 
67. Dan mortgaged his house and lot to Casey to
secure his loan amounting to P1M. It is stipulated that
Dan cannot sell his house and lot without the consent
of Casey while the loan remains unpaid. Before the
maturity date, Ben offered to buy the house and lot of
Dan for P1.6M. In this scenario:
a.) Dan cannot sell his house and lot because of the
prohibition in the contract.
b.) Dan cannot sell his house and lot without the
consent of Casey.
c.) Dan can sell his house and lot provided he pays the
loan to Casey.
d.) Dan can sell his house and lot despite the
prohibition in the contract.
68. Toto sold the car of Popo without authority. When S2: Solutio indebiti and negotiorum gestio are quasi-
the buyer Momo demanded for the key of the car from contracts that give rise to civil obligations.
Popo, after paying the purchase price, Popo gave the a. True; True b. True; False
key of his car to the Momo. The sale made by Popo to
c. False; False d. False; True
Momo is valid while an agency between Popo and Toto
is created by:
72. One of the following is a determinate thing. Which
 a.) estoppel is it?
b.) contract a. A cow
c.) operation of law b. A horse
d.) ratification c. A Toyota car with engine no. 12345, body no.
34888 and plate no. JDS 111
 
d. A ring with diamond embellishment
69. Simon transferred to Peter the ownership of his
car, worth P500,000.00 in consideration of the amount 73. In which of the following is the debtor still liable
of P240,000.00 plus a hand tractor worth P260,000.00. despite the fortuitous event causing the loss of the
The contract between them is actually a form of: thing?
a. The thing lost is a specific thing.
a.) partly sale and partly barter b. The performance of the obligation has become
b.) sale
impossible.
c.) commodatum
d.) barter c. The nature of the obligation does not require the
assumption of risk.
  d. When the law or the obligation expressly so
provides.
70. Ann mortgaged his house to Boy to secure his loan
amounting to P1,500,000.00. Due to the negligence of 74. S1: Liability from damages arising from fraud is
the typist, the document signed by Ann and Boy shows
demandable and there can be a waiver of an action for
that the house of Ann was sold to Boy for
P1,050,000.00 only. Which of the following statements past fraud.
is correct? S2: There can be a waiver of an action for future
negligence but not fraud.
a.) The contract of sale between Ann and Boy a. True; True b. True; False
rescissible because of the damage suffered by Ann c. False; False d. False; True
b.) The contract of sale between Ann and Boy is
relatively simulated
75. These are acts or omissions of diligence that cause
c.) The contract of sale between Ann and Boy is
voidable because there is a mistake damage to another, there being no contractual relation
d.) The contract of sale between Ann and Boy may be between the parties.
reformed a. Culpa contractual
c. Culpa criminal
  b. Quasi-delict
d. Fraud
71.  S1: In a natural obligation, the creditor has the
right to enforce the performance thereof it being
based on positive law.
76. S1: The debtor incurs delay from the time the
creditor demands fulfillment of the obligation but the
debtor fails to comply with such demand.
S2: In reciprocal obligations, where the obligations
arise out of the same cause and must be fulfilled at the
same time, from the moment one of the parties fulfills
his obligation, delay by the other begins
notwithstanding the absence of demand.
a. True; True b. True; False
c. False; False d. False; True
77. Which of the following is a remedy of the creditor
to enforce payment of his claims against the debtor?
a. Pursue the property in the possession of
the debtor including those exempt by law.
b. Exercise all the rights and bring all the
actions of the debtor including those personal to him.
c. Impugn the acts which the debtor may
have done to defraud his creditors.
d. All of the above.
78. Consignation alone without tender of payment is
sufficient in the following cases, except:
a. When the creditor is absent or unknown or
does not appear at the place of payment.
b. When the creditor presents the title to the
obligation for collection.
c. When without just cause, the creditor
refuses to give a receipt.
d. When two or more persons claim the same
right to collect.
79. S1: Mara borrowed P10,000 from Clara. On due
date, Mara paid the debt to Clara who had become
insane. If Clara kept only P6,000 and threw away
P4,000, then payment will be valid for only P6,000.
S2: Lea makes a note payable to bearer and delivers it
to Mateo. The note, however, is lost by Mateo and is
picked up Lyka. Lyka goes to Lea to collect on the note.
Lea pays Lyka believing in good faith that Lyka is the
intended bearer. Lea is still not released from liability.
a. True; True; b. True; False
c. False; Fasle d. False; True
80. Payment must be made in the following, except:
a. If there is a stipulation, then in the place
designated.
b. If there is no stipulation and the obligation
is to give a determinate thing, wherever the thing
might be at the time the obligation was constituted.
c. If there is no stipulation and the obligation
is to give a generic thing, then at the domicile of the
obligee.
d. If there is no stipulation and the obligation
is to do, then at the domicile of the debtor.
81. In order that condonation may extinguish an
obligation involving a movable property whose value
exceeds P5,000.00 –
a. It is sufficient that the condonation and the
acceptance are in writing, even a private one.
b. It is required that the condonation and the
acceptance must be in a public instrument.
c. The delivery of the document evidencing
the debt is sufficient since the property is movable.
d. The condonation and the acceptance may
be made orally.
82. S1: A debtor who is adjudged an insolvent and
subsequently discharged by the court shall be released
from obligations of all debts but he thereafter cannot
engage in business and acquire property until he has
paid his former debts.
S2: Dwarfina owes Dennis P100,000. With the consent
of both, Jennelyn, a third person pays Dennis
P50,000.00. Thus, Dennis and Jennelyn are now
creditors of Dwarfina at P50,000.00 each. If Dwarfina
has only P50,000.00, it will be divided by Dennis and
Jennelyn equally.
a. True; True b. True; False
c. False; False d. False; True
83. The following cannot give consent to a contract, a. The husband is liable because the note was
except; executed by the husband voluntarily
a. Minors, except sale of necessaries in life b. The recovery shall be limited only to the
b. Insane persons amount embezzled without any interest
c. Demented persons c. The employer may recover from the
d. Deaf-mutes who do not know how to read husband of the employee and may still prosecute the
and write. employee
d. No recovery can be made on the note
84. It is the manifestation of the meeting of the offer because the consideration is illicit
and the acceptance upon the thing which are to
constitute the contract 88. One of the following contracts is not vitiated by
a. Consideration intimidation or violence and hence, valid. Which is it?
b. Contract a. A contract of sale which was signed by a
c. Consent party because his arm was being twisted by a third
d. Cause person.
b. A contract of sale which was entered into
85. A solemn or formal contract has the following because the other party was pointing a gun at his wife.
essential elements: c. A contract where a party was compelled to
a. Consent of the contracting parties, object assign his property to the other to pay a just debt
certain and cause or consideration. because the latter threatened to sue him in court if he
b. Consent of the contracting parties, object does not pay his debt.
certain, cause or consideration and delivery of the d. A contract of donation of a parcel of land
object. which a party signed because the other party
c. Consent of the contracting parties, object threatened to burn his house.
certain, cause or consideration and formalities
required by law. 89. The following statements pertain to the cause of a
d. Consent of the contracting parties, object contract. Which statement refers to motive?
certain, delivery of the object and formalities required a. It is the essential reason for a contract.
by law. b. It is always known to the contracting
parties.
86. S1: A contract as a general rule must be written to c. Its illegality does not affect the validity of
have force and effect as a valid agreement. the contract.
S2: A formal or solemn contract is one that must be in d. There will be no contract without it.
writing to be valid.
a. True; True b. True; False 90. One of the following is not a requisite of an object
c. False; False d. False; True of contract. Which is it?
a. It must be within the commerce of men.
87. An employee embezzled a sum of money from her b. It must not be intransmissible.
employer, and in order that she would not be c. It must be contrary to law, morals, good
prosecuted, her husband signed a promissory note to customs, public order or public policy.
pay the amount embezzled, with interest to the victim. d. It must be determinate as to its kind or if
Which is correct? its quantity is not determinate, it must be possible to
determine the same without the need of a new 95. Which of the following need not be in writing to be
contract between the parties. enforceable?
a. An agreement for the sale of goods,
91. S1: If the contract is not in the form provided by chattels, or things in action at a price not less than
law for its validity, the contract is void. P500
S2: if the contract is not in the form provided by law b. An agreement for the leasing for a period
for its enforceability, the contract, though it has all the longer than one year, or for the sale of real property or
essential requisites for validity, cannot be enforced of an interest thereon
against the party sought to be charged. c. A representation as to the credit of a third
a. True; True b. True; False person
c. False; False d. False; True d. A mutual promise to marry

92. Acceptance of an offer made by the letter or 96. In order that fraud may make a contract voidable
telegram shall bind the offeror. From the time the a. It may be incidental but both parties
a. Offeree accepted the offer should not be in pari delicto
b. Acceptance came to the knowledge of the b. It may be serious and the parties must be
offeror in pari delicto
c. Offeree sent his letter or telegram c. It may be incidental but should have been
d. Offeror made the offer employed by both parties
d. It should be serious and should have not
93. S1: If the terms of a contract are clear and leave no been employed by both contracting parties
doubt upon the intention of the contracting parties,
the literal meaning of the stipulations shall control. 97. The following are characteristics of void or
S2: If the words appear to be contrary to the evident inexistent contracts, except:
intention of the parties, the latter shall prevail over the a. The right to set up the defense of illegality
former. cannot be waived
a. True; True b. True; False b. The action or defense for the declaration
c. False; False d. False; True of the inexistence of a contract does not prescribe
c. A void contract cannot be ratified
94. A leased his property to B. Part of the premises d. The defense of illegality of contracts is not
was subleased by B to C. B violated the conditions of available to third persons whose interests are not
the lease, so A wanted to rescind the lease contract. directly affected
Which is correct?
a. A can rescind the lease contract provided 98. S1: A partnership is created by mere agreement of
he respects the sublease the partners while a corporation is created by
b. A cannot rescind the lease contract as the operation of law.
sublease would naturally be affected S2: In a partnership, juridical personality commences
c. A may rescind the lease contract and is not from the execution of the articles of the partnership; in
bound to respect the sublease a corporation, from the issuance of certificate of
d. B may object to the cancellation of the incorporation by the Securities and Exchange
contract because he is not a party to the violation Commission.
a. True; True b. True; False b. Only Arnold and Ben are liable at 1/3 and
c. False; False d. False; True 2/3, respectively
c. All of Arnold, Ben and Charlie are liable pro
99. The minimum capital in money or property except rata to the creditors
when immovable property or real rights thereto are d. Charlie is not liable being an industrial
contributed, that will require the contract of partner who is exempt from losses
partnership to be in a public instrument and be
registered with the Securities and Exchange 103. Armando and Betty are co-owners of a
Commission(SEC). parcel of land from which they derive profits in equal
a. P5,000.00 b. P3,000.00 sharing being co-heirs in inheritance. Is there a
c. P3,001.00 d. P10,000.00 partnership?
a. There is a partnership because of the equal
100. If the partnership has the minimum capital sharing of profits
mentioned in No. 29, but the contract is not in a public b. There is no partnership because co-
instrument or the same is not recorded with SEC, the ownership by itself does not establish a partnership
partnership: despite the sharing of profits
a. Is voidable c. There is no partnership since in
b. Is void partnership division of profits is not always necessary
c. Still acquires juridical personality among partners
d. Does not acquire juridical personality d. There is partnership they being co-owners
and co-possessors
101. Three of the following contracts are void.
Which one is not? 104. Normelita and Gracia are partners in NG
a. A universal partnership of all present Partnership. While Normelita was performing her
property between husband and wife duties as a partner in the conduct of the business, he
b. A universal partnership of profits between negligently caused damage to Eddie, a third person.
a man and a woman living together as husband and Who shall be liable to Eddie and in what capacity?
wife without the benefit of marriage a. Only the partnership shall be liable it being
c. A particular partnership between husband a juridical person separate and distinct from the
and wife partners
d. A universal partnership of profits between b. Only Normelita shall be liable for she is the
a private individual and a public officer only one at fault
c. Both Normelita and Gracia shall be liable
102. Partners Arnold, Ben and Charlie solidarily to Eddie
contributed: Arnold-P1,000,000; Ben-P2,000,000; and d. Normelita, Gracia and the partnership are
Charlie-service. After exhausting the partnership all liable solidarily to Eddie
assets, the creditors still have a claim for P300,000. For
how much are the partners liable to the creditors for 105. Petalcorin is indebted for P5,000 to JDS
the partnership liability? Trading Company, a partnership managed by Dulzura
a. Only Arnold and Ben are liable equally to to whom Petalcorin also owes P10,000.00. The two
the creditors being capitalists debts which are both demandable are unsecured.
Petalcorin remits P4,500.00 to Dulzura in payment of
his debt to her. Accordingly, Dulzura issues a receipt a. The group of Mary will prevail because
for her own credit. To which credit should the payment they constitute the majority.
be applied? b. The group of Liza will prevail because they
a. To Dulzura’s credit because the payment constitute the controlling interest.
made by Petalcorin is intended for his debt to Dulzura c. The group of Mary will prevail because
who issues her own receipt. they constitute the controlling interest.
b. To both the partnership credit and d. Suppose Rose abstains, the group of Mary
Dulzura’s credit proportionately at P1,500.00 and will prevail.
P3,000.00, respectively.
c. To Dulzura’s credit because its amount is 108. Which of the following will not cause the
greater than that of the partnership credit. automatic dissolution of a general partnership?
d. To the partnership credit because the a. Death of a capitalist partner
managing partner should not prefer her own interest b. Insolvency of a capitalist partner
to that of the partnership. c. Insanity of an industrial partner
d. Civil interdiction of an industrial partner
106. Joseph, Aris, Dex and Earl are partners in
JADE Enterprises, a jewelry store, with Joseph 109. A person admitted to all the rights of a
contributing P50,000.00; Aris, P20,000.00; and Dex, limited partner who has died or has assigned his
P30,000.00. Earl is an industrial partner and manages interest in the partnership is known as
the partnership. Based on the foregoing information, a. An ostensible partner
which one of the following statements is false? b. A liquidating partner
a. Joseph may engage in the buying and c. A substituted limited partner
selling of rice without the consent of the other d. A general-limited partner
partners
b. Earl may engage in the buying and selling 110. What is the order of payment of liabilities
of rice without the consent of the other partners of a dissolved general partnership using the code
c. Earl is not liable for the losses of the number representing each liability?
partnership I. Those owing to partners than for
d. Earl may be held liable by third persons for capital or for profits
partnership debts with her separate property II. Those owing to creditors other than
partners
107. MARILEN Company is owned by the III. Those owing to partners in respect
following partners with their respective contributions: of profits
Mary, P10,000.00; Anna, P20,000.00; Rose, IV. Those owing to partners in respect
P30,000.00; Irma, P40,000.00; Liza, P50,000.00; Edna, of capital
P100,000.00; and Nora, P200,000. Except for Edna and a. I, II, III, IV
Nora, all the rest are managers without any b. II, I, IV, III
specification as to their respective duties. Mary wants c. II, I, III, IV
to buy goods from Excellent Company. Liza opposes. d. I, II, IV, III
Anna and Rose side with Mary while Irma sides with
Liza. 111. The articles of incorporation differ from
the by-laws in that the articles of incorporation are:
a. The rules of action adopted by a c. The number must not be less than 5 not
corporation for its internal government more than 15
b. Adopted before or after incorporation d. In case of a non-stock corporation, a
c. A condition precedent in the acquisition by trustee is not required to be a member of the
a corporation of a juridical personality corporation
d. Approved by the stockholders if adopted
after incorporation 116. S1: The removal of a director must take
place in a regular meeting of the corporation or in a
112. A corporation acquires juridical personality special meeting called for the purpose.
a. Upon the filing of the articles of S2: The election must be made through the raising of
incorporation hands if requested by any voting stockholder or
b. Upon the filing of the by-laws member. If there is no such request, voting may be
c. Upon the issuance of the certificate of made through other means like secret ballot.
incorporation a. True; True b. True; False
d. Within 30 days from the receipt of the c. False; False d. False; True
notice of the issuance of the certificate of
incorporation 117. These are powers which are necessary to
carry into effect powers which are expressly granted,
113. A delinquent stockholder is not entitled to and which must therefore be presumed to have been
the following rights, except the intention in the grant of the franchise.
a. To be voted a. Express powers
b. To vote or be represented in the meetings c. Implied powers
of stockholders b. Incidental powers
c. To dividends d. Inherent powers
d. He is not entitled to all the rights of a
stockholder 118. Which of the following subscriptions does
not comply with the subscription and paid-up capital
114. Every corporation incorporated under the requirements at the time of incorporation?
Corporation Code has the power and capacity Authorized Subscribed
a. To adopt and use a corporate seal Paid-up
b. To protect debts due to the corporation a. P1,000,000.00
c. To protect or aid employees P250,000.00
d. To increase the business of the corporation P62,500.00
b. 300,000.00
115. All of the following, except one are 75,000.00 50,000.00
qualifications of a director or trustee. Which is it? c. 100,000.00
a. He must be the owner of at least 1 share of 100,000.00 100,000.00
stock which shall stand in his name on the books of the d. 50,000.00
corporation 12,500.00 3,125.00
b. Majority of the directors or trustees must
be residents of the Philippines 119. A corporation may acquire its own shares
for a legitimate purpose provided it has unrestricted
retained earnings. In which of the following a. 2/3 approval of the stockholders of the
acquisitions is the requirement of unrestricted corporation
retained earnings not imposed? b. Majority vote of the OCS of the
corporation
a. When the acquisition is made to eliminate
c. Majority vote of the Board of Directors
fractional shares d. The President of the corporation.
b. When delinquent shares are acquired in a
delinquency sale 124. Which of the following is not required to
c. When redeemable shares are repurchased be included in the Articles of Incorporation?
in accordance with the terms provided in the articles of a. Duties of the president.
incorporation b. Name of the corporation.
c. Period of existence
d. When shares are acquired from
d. Location of the principal office.
stockholders who exercise their appraisal right
125. Delinquent stocks are
120. Which of the following rights is the a. Entitled to vote in stockholders’
subscriber of shares not fully paid who is not meeting
delinquent not entitled to? b. Entitled to inspect the books of the
a. Right to dividends corporation
b. Right to vote in stockholders’ meetings c. Entitled to dividends
d. None of the above
c. Right to a stock certificate
d. Right to inspection of corporate books and
records

121. Fatima Corporation has a statement of

capital stock in its articles of incorporation but it was
stated in the same articles that dividends are not
supposed to be declared , that is , there is no
distribution of retained earnings. Fatima Corporation
is:
a. Stock corporation
c. Corporation by prescription
b. Non-stock corporation
d. Corporation by estoppels

122. How many number of votes of the board

of directors are required to change the name of a
corporation?
a. 2/3 of all members of the board
b. 2/3 vote of all present
c. Majority vote of all present constituting a
quorum
d. Majority vote of the board

123. In the matter of managing the business of

the corporation, the exercise of corporate power and
handling of corporate properties this is supreme: