CPA REVIEW SCHOOL OF THE PHILIPPINES
For PSBA INTEGRATED REVIEW
REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS
COVERAGE: Contracts
Direction: Read and select the best answer for the following questions.
1.
It refers to a meeting of minds between two persons whereby one binds himself, with respect to the other, to give
something or to render some service. It is one of the five sources of civil obligation.
a. Obligation
b. Contract
c. Right
d. Civil action
2. Which of the following characteristics of contracts pertains to relativity of contract?
a. It means that the contractual provisions constitute the law between the parties. Obligations arising from
contracts have the force of law between the contracting parties and should be complied with in good faith,
b. It means that the validity and performance of contract cannot be left to the will of only one of the parties
but must be mutually decided by all contracting parties.
c. It means that-the contract is binding only upon the contracting parties and their successors such as heirs or
assignees and third persons are not generally allowed to assail a contract.
d. It means that the parties may establish such stipulations, clauses, terms, and conditions as they may deem
convenient provided they are not contrary to law, morals, good customs, public order or public policy.
3. Which of the following characteristics of contracts pertains to autonomy of contract?
a. It means that the parties may establish such stipulations, clauses, terms, and conditions as they may deem
convenient provided they are not contrary to law, morals, good customs, public order or public policy.
b. It means that contracts are generally perfected by mere consent except in case real contracts that require
delivery of subject matter and formal or solemn contracts which require execution of formality required
by
law.
c. It means that contracts should not be contrary to law.
d. It means that contracts should not contain doubt or ambiguity to avoid confusion and misunderstanding in
the performance of contract.
4. Which of the following types of elements of contract pertain to essential elements of contracts?
a. They refer to those which are required in order for a contract to exist such as consent of the contracting
parties, object certain which is the subject matter of the contract and cause of the obligation which must
be established. These elements may not be waived by the parties.
b. They refer to those that exist in certain contract unless set aside or suppressed by the parties such as
warranty against eviction and warranty against hidden defects in a contract of sale. These elements may be
waived by parties as long as the waiver is made in good faith.
c. They refer to those that do not normally exist in a contract unless stipulated by the parties such as tenns of
payment, interest rate or place of payment.
5. Which of the following statements best describes a real contract?
a. It is a contract perfected by mere consent such as contract of lease and contract of sale.
b. It is a contract perfected by the delivery of the object of the contract such as contracts of deposit, of
pledge, of loan and of commodatum.
c. c, It is a contract which must be in the form provided by law for their perfection such as contract of
donation involving immovable property, together with the acceptance by the donee, must be in a public
instrument to be valid.
6. Which of the following statements best describes an onerous contract?
a. It is a contract whereby there is an exchange of valuable consideration such as contracts of sale and barter.
For each contracting party, the cause is the prestation or the promise of a thing or service by the other.
b. It is a contract whereby one party receives no equivalent consideration such as contracts of donation and
commodatum, These contracts are referred to as contracts of pure beneficence, the cause of which is the
liberality of the benefactor.
c. It is a contract whereby the cause here is the service or benefit remunerated.
d. It is a contract wherein there is no cause or consideration.
7.
Which of the following statements best describes principal contract?
a. It is a contract whose existence depends upon another contract. The examples are contracts of pledge, of
chattel mortgage, antichresis, guarantee or real estate mortgage which is dependent upon the
principal contract of loan.
b. It is a contract which serves as a means by which other contracts may be entered into such as contracts of
agency and partnership.
c. It is a contract that can stand by itself such as contracts of sale and loan.
d. It is a contract which has a name under the Civil Code or special law such as contracts of sale, loan and
barter.
e. It is a contract without any name under the Civil Code or special law.
8. Which of the following statements best describes aleatory contract?
a. It is a contract whereby the parties give equivalent values such as contracts of sale and barter hence, there
is real fulfillment.
b. It is a contract whose fulfillment depends upon chance such as insurance contract.
c. It is a contract where only one of the parties is obligated to give or to do something such as contracts of
commodatum and gratuitous deposit.
d. It is a contract where both parties are required to give or to do something such as contracts of sale and
e. barter.
f. It is a contract whereby the object of the other party is also the cause of the other party and vice versa such
as contracts of sale and barter.
9. Which of the following contracts best describes auto-contract?
a. It is a contract which has been performed.
b. It is a contract wherein one person contracts with himself.
c. It is a contract wherein one party has already prepared form of a contract, containing the stipulations he
desires, and he simply asks the other party to agree to them if he wants to enter into the contract.
d. It is a contract that has not yet been performed.
10. The following are the innominate contracts, except
a. Do ut des (I give that you may give.)
b. Do ut facias (I give that you may do.)
c. Facio ut des (I do that you may give.)
d. Facio ut facias (I do that you may do.)
e. Facias ut des (I do not do that you may not do.)
11. The following are the order of priority regarding rules that shall govern innominate contracts, except
a. The stipulation of the parties
b. The provisions of Obligations and Contracts
c. The rules governing the most analogous contracts
d. The customs of the place
e. The provisions of Tax Code
12. Which of the following statements pertaining to the stages of a contract refers to preparation or conception
stage?
a. It refers to the first stage that involves preliminary negotiations and bargaining, discussion of terms and
conditions, with no arrival yet of a definite agreement.
b. It refers to the second stage that pertains to the point when there is meeting of minds between the parties
on a definite subject matter and valid cause.
c. It refers to the last stage that pertains to the point when the contract has been fulfilled resulting in
its accomplishment.
13. Freedom to contract is one of the liberties of the people of the state as guaranteed by due process clause. This
means that the contracting parties may establish such stipulations, clauses, terms and conditions as they
may deem convenient, provided they are not contrary to the following, except
a. Law
b. Religion
c. Morals
d. Good customs
e. Public order
f. Public policy
14. An audit staff and an auditing firm orally entered into a contract of employment whereby it is stipulated
that overtime premium and holiday pay are waived. Is the waiver valid?
a. Yes because of mutuality of contract.
b. Yes because of autonomy of contract.
c. No because it is contrary to law and public policy.
d. No because it is entered into orally but not in writing.
15. In an action for ejectment, the lessee interposed the defense that the contract of lease authorized them to continue
occupying the premises so long as they pay their rents. Is the defense of the lessee tenable?
a. No because it violates mutuality of contract which provides that the contract must bind both contracting
parties and its validity or compliance cannot be left to the will of one of them.
b. Yes because it is stipulated in the contract.
c. No because it is contrary to morals and good customs.
d. Yes because it does not violate public order and public policy.
16. A stipulation provides that the student's scholarship is good only if he continues in the same school, and that he
waives his right to transfer to another school without refunding the equivalent of his scholarship in cash is null
and void because it is contrary to
a. Law
b. Morals
c. Public order
d. Public policy
17. A stipulation which provides that in the event of nonpayment of the debt at maturity that the creditor
may appropriate for himself thing given as security is null and void because it is contrary to
a. Morals
b. Good customs
c. Law
d. Public order
18. A stipulation which provides that a person shall marry a person in consideration of money is null and void
because it is contrary to
a. Law
b. Morals and good customs
c. Public order
d. Public policy
19. The following stipulations for common carrier shall be considered unreasonable, unjust and contrary to
public policy, therefore null and void, except
a. That the goods are transported at the risk of the owner or shipper.
b. That the common carrier need not observe any diligence in the custody of the goods.
c. That the common carrier will not be liable for any loss, destruction, or deterioration of the goods.
d. A stipulation between the common carrier and the shipper or owner limiting the liability of the former for
the loss, destruction, or deterioration of the goods to a degree less than extraordinary diligence if in
writing and supported by a valuable consideration.
20. The following stipulations for common carrier shall be considered unreasonable, unjust and contrary to
public policy, therefore null and void, except
a. That the common carrier shall exercise a degree of diligence less than that of a good father of a family, or
of a man of ordinary prudence in the vigilance over the movables transported.
b. That the common carrier shall exercise a degree of diligence less than that of extraordinary diligence in
the transportation of passengers.
c. That the common carrier shall not be responsible for the acts or omission of his or its employees.
d. That the common carrier's liability for acts committed by thieves, or of robbers who do not act with grave
or irresistible threat, violence or force, is dispensed with or diminished.
e. e, That the common carrier is not responsible for the loss, destruction, or deterioration of goods on account
of the defective condition of the car, vehicle, ship, airplane or other equipment used in the contract of
carriage.
f. That the common carrier is not responsible for the acts of robbers who act with grave or irresistible threat,
violence or force, or that the common carrier's responsibility is dispensed with or diminished in case of
acts of robbers who act with grave or irresistible treat.
21. The hotel-keeper and the guests agree that the responsibility of the former as set forth in Articles 1998 to 2001 of
Civil Code regarding necessary deposits brought by the guests is suppressed or diminished. It was also stipulated
that the hotel-keeper is free from responsibility to the effect that he is not liable for the articles brought by the
guest. Are the stipulations valid?
a. They are always void for being contrary to law and public policy.
b. They are valid if agreed to in writing.
c. They are valid provided the hotel-keeper properly posted the notices containing the waiver in the rooms.
d. They are only void if they are entered into orally.
22. A stipulation in a contract of loan providing for 10% interest per month is
a. Usurious
b. Unconscionable
c. Voidable
d. Rescissible
23. Two persons agreed in a contract which provides for the concealment of a public offense or the suppression of
evidence or the stifling of a criminal prosecution for a certain consideration. Is the stipulation valid?
a. Yes because mutuality of contract provides that its validity or compliance cannot be left to the will of one
of them.
b. Yes because the obligatory force of a contract bind both contracting parties.
c. No because the stipulation is contrary to law and public policy.
d. No because the stipulation is contrary to mutuality of contract.
24. An agreement was entered into by the parties which provides that either one of them may terminate the contract
for the violation of any of its terms and conditions. Is this stipulation valid?
a. No because it violates mutuality of contract which provides that its validity or compliance cannot be left
to the will of one of them.
b.
Yes because the validity or compliance is not entirely left to the will of one of the contracting parties, but
it merely gives the one party the right to declare such contract cancelled and of no effect in case of breach
of contract by other party,
c. No because it violates the freedom to enter into contract.
d. Yes because .the right to rescind a contract cannot be waived.
25. The contract provides that the determination of the performance is left to of a third person. Is the stipulation valid?
a. No because it is contrary to law, morals, good customs, public order or public policy.
b. No because it violates mutuality of contract.
c. Yes because the determination of the performance of contract may be left to a third person, whose decision
shall not be binding until it has been made known to both contracting parties.
d. Yes because the determination of the third person is obligatory whether or not it is evidently inequitable.
26. What is the remedy of the injured party in case the determination of the performance of contract by the third
person designated by the contracting parties is evidently inequitable?
a. The injured party may ask the court for declaration of nullity of contract.
b. The injured party may ask the court for the rescission of contract.
c. The injured party may ask the court to decide what is equitable under the circumstances.
d. The injured party may ask the court for annulment of contract.
27. Relativity of contract provides that contract takes effect only between the following, except
a. Contracting parties
b. Assigns of contracting parties
c. Heirs of contracting parties
d. Third persons
28. Obligations and rights arising from contracts are generally transmissible to the parties' heirs and assigns.
The following are considered intransmissible, except
a. Those which are purely personal.
b. Those which are provided by law to be intransmissible.
c. Those which are stipulated by the party to be intransmissible.
d. Those which are based on commercial transactions.
29. A person died leaving liabilities. Are the heirs liable for the obligations of the decedent?
a. No because there is no privity between them and the decedent.
b. No because the heirs are not the contracting parties.
c. Yes even beyond the property they received because contracts take effect between the parties, their assigns
and heirs.
d. Yes but not beyond the property they received because there is privity between them and their predecessor.
30. A stipulation which is considered an exception to the relativity of contract is called
a. Stipulation pour autrui a.k.a. stipulation in favor of third person
b, Stipulation in favor of the heirs
b. Stipulation in favor of assigns
c. Stipulation in favor of contracting parties
31. The following are the requisites of stipulation pour autrui or stipulation in favor of third person, except
a. There must be stipulation in favor of a third person.
b. The stipulation should be a part, not the whole, of the contract.
c. The contracting parties must have clearly and deliberately conferred a favor upon a third person and not a
mere incidental benefit or interest.
d. The favorable stipulation should not be conditioned or compensated by any kind of obligation whatever.
e. The third person must have communicated his acceptance to the obligor before its revocation.
f. One of the contracting parties does not bear the legal representation or authorization of the third party.
g. The stipulation in favor of third person must be specified in writing.
32. The following statements concerning stipulation pour autrui or stipulation in favor of third person are correct,
except
a. A stipulation in favor of third person has no binding effect in itself before its acceptance by the party
favored.
b. Before acceptance by the third person, the contracting parties; by mutual agreement, may modify
the contract or revoke it.
c. A mere incidental interest or benefit is not within the doctrine of stipulation pour autrui.
d. The stipulation pour autrui still exists even if the contract is considered null and void.
33. A mortgages his land to B and the mortgage is registered in Registry of Property. Afterwards, A sells the land to C,
Is the mortgage contract binding upon C?
a. No because C is not a party to the contract.
b. No because there is no privity between B and C.
c. Yes even if the mortgage contract is not registered.
d. Yes because in contracts creating real rights, third persons who come into possession of the object of the
contract are bound thereby, subject to the provisions of the Mortgage Law and Land Registration Laws.
34. A is a creditor of B. In order to escape the liability to A, B sells all his property to C. May A ask for rescission of
the contract of sale between B and C?
a. No because A is not a party to the contract.
b. No because A has no right of rescission.
c. Yes because creditors are protected in cases of contracts intended to defraud them.
d. Yes even if the right of levy and execution and accion subrogatoria are still available.
35. A contract was entered into between Y and Z. X induces Y to violate the contract. May Z file an action for
damages against X?
a. No because A is not a party to the contract.
b. No because it will be violative of relativity of contract.
c. Yes even if X has no knowledge of the contract between Y and Z.
d. Yes because any third person who induces another to violate his contract shall be liable for damages to the
other contracting party.
36. A borrowed P 10,000 from B and entered into a contract of real estate mortgage involving his car. A is also
indebted to C in the amount of PI 00,000 but the latter cannot attach the car because of the mortgage. May C file
an action for declaration of nullity of contract of real estate mortgage?
a. Yes because a void contract may be assailed by a third person directly affected by such void contract.
b. No because C is not a party to the contract.
c. No because it will be violative of relative of contract.
d. Yes but only if A and B will give consent to the suit.
37. As an exception to relativity of contract, which contracts may be assailed by a third person?
a. Voidable contract
b. Rescissible contract intended to defraud creditor and void contract that directly affected a third person
c. Unenforceable contract
d. Valid contract
38. Consensual contracts are perfected by
a. Delivery of the object of a contract.
b. Execution of formalities required by law.
c. Mere consent by contracting parties.
d. Provisions of the law,
39. Real contracts are perfected by
a. Delivery of the object of a contract.
b. Execution of formalities required by law.
c. Mere consent by contracting parties.
d. Provisions of the law.
40. Real contracts, such as contracts of deposit, of pledge, of loan or muttum and of commodatum are perfected by
a. Delivery of the object of a contract.
b. Execution of formalities required by law.
c. Mere consent by contracting parties.
d. Provisions of the law.
41. What is the nature of-contract to constitute a pledge, a deposit, a loan or a commodatum?
a. Real contract
b. Consensual contract
c. Formal contract
42. Formal or solemn contracts are perfected by
a. Delivery of the object of a contract.
b. Execution of formalities required by law.
c. Mere consent by contracting parties.
d. Provisions of the law.
43. As a general rule, contracts shall be obligatory, in whatever form they may have been entered into, provided all
the essential requisites for their validity are present. However, when the law requires that a contract be in some
form in order that it may be valid or enforceable, or that a contract be proved in a certain way, the requirement is
absolute and indispensable. The following contracts are required to be in certain form to be valid also known as
formal contracts or solemn contracts, except
a. Negotiable instruments must be made strictly in the form provided by the Negotiable Instruments Law to
be considered negotiable.
b. Contract of marriage requires the contracting parties to be man and woman, both at least 18 years old, with
marriage license, and personal appearance before solemnizing officer with authority to solemnize
marriage. c. Donations of personal property in excess of P5,000 must be made and accepted in writing to be
valid.
d. Donations of real property must be made and accepted in public instruments to be valid.
e. The antichretic agreement including the principal and interest of the contract of loan must be specified in
writing to be valid for the contract of antichresis to be valid.
f. The agreement to pay interest in a contract of loan must be in writing to be valid.
g. Registration of chattel mortgage is necessary for its validity.
h. A contract of partnership to which real property or real rights are contributed must be in a public
instrument,
with an inventory of real attached there, to be valid.
i. Sale of a piece of land by the agent in the name of the principal, the authority of the agent to sell the land
must be in writing for such contract of sale to valid.
j. Sale of community/conjugal property by one of the spouses, there must be authority given by the other
spouse to the selling spouse.
k. The lease of personal property for a period longer than one year should be in writing to be valid.
44. Which of the following is a valid agreement or stipulation?
a. Oral agreement to pay 2% per month interest based on the principal amount of the loan
b. Oral contract of antichresis
c. Written contract of sale of a piece of land by an agent in the name of the principal wherein the agent has
oral authority to sell the land
d. Oral contract of partnership wherein the delivery of money will be done after 5 years.
45. The following must appear in a public document in order to insure its efficacy or for mere convenience but not for
its validity, except
a. Acts or contracts which have for their object the creation, transmission, modification or extinguishment or
real rights over immovable property.
b. The cession, repudiation or renunciation of hereditary rights or of those of the conjugal partnership of
gains. c. The power to administer property, or any other power which has for its object an act appearing or
which
should appear in a public document, or should prejudice a third person
d. The cession of actions or rights proceeding from an act appearing in a public document
e. Contract of lease of movable property
46. Which contract must be in a written instrument, either public document or private document, in order to insure its
efficacy or for mere convenience but not for its validity?
a. Contracts where the amount involved exceeds five hundred pesos.
b. Contracts where the contracting parties are capacitated.
c. Contracts where the subject matter is movable or personal property
d. Contracts to be performed within one year from the making thereof.
47. If the law requires a document or other special form to a contract for mere convenience but not for validity or
enforceability, what is the right of the contracting parties once the contract is perfected?
a. The contracting parties may annul the contract.
b. The contracting parties may rescind the contract.
c. The contracting parties may compel each other to observe the form or document required by law.
d. The contracting parties need not execute the required form.
48. From the moment of perfection of a contract, what is the extent of its binding effect?
a. The parties are bound only to the fulfillment of what has been expressly stipulated in the contract.
b. The parties are bound only to the natural consequences of the contract.
c. The parties are bound not only to the fulfillment of what has been expressly stipulated in the contract but
also to all the consequences which, according to their nature, may be in keeping with good faith, usage
and law.
49. How is the nature of the contract determined by the court?
a. Contract is what the parties choose to call them.
b. Contract is determined by the stipulations of the parties.
c. Contract is determined by the principles of law,
d. Contract is determined by the surrounding circumstances.
50. As a general rule, no one may contract in the name of another without being authorized by the latter or unless he
has by law a right to represent him. What is the status of a contract entered into in the name of another by one who
has no authority or legal representation, or who has acted beyond his powers?
a. Rescissible
b. Unenforceable
c. Voidable
d. Null and void
51. An owner of hacienda did not authorize his wife and children to sell the said hacienda but upon being informed
that they had done so, instead of refusing to enforce of the sale, he proceeded to collect in installments the amount
of promissory note given to the purchase. Can the buyer of the hacienda enforce the contract of sale of land?
a. No because the contract is unenforceable considering the wife and children has no authority to sell the
land. b. No because the contract is rescissible considering that it is entered into to defraud the creditors.
c. Yes because the contract is only voidable and therefore enforceable.
d.
Yes because the contract becomes enforceable upon the collection of the purchase price which is
considered an implied ratification.
52. The following are the essential requisites of consensual contracts, except
a. Execution of formality or solemnity required by law
b. Consent of the contracting parties
c. Object certain which is the subject matter of the contract
d. Cause of the obligation which is established
53. The following are the essential requisites of real contracts, except
a. Delivery of the subject matter
b. Consent of the contracting parties
c. Object certain which is the subject matter of the contract
d. Cause of the obligation which is established
e. Execution of formality or solemnity required by law
54. The following are the essential requisites of formal or solemn contracts, except
a. Delivery of the subject matter
b. Consent of the contracting parties
c. Object certain which is the subject matter of the contract
d. Cause of the obligation which is established
e. Execution of formality or solemnity required by law
55. It refers to the meeting of minds between the contracting parties as regards to the object and cause of contract. It is
one of the essential elements of contract.
a. Execution of formality or solemnity required by law
b. Consent of the contracting parties
c. Object certain which is the subject matter of the contract
d. Cause of the obligation which is established
56. Which of the following statements concerning the concept of consent is incorrect?
a. Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which
are to constitute the contract.
b. The offer must be certain and the acceptance absolute.
c. A qualified acceptance constitutes a counter-offer.
d. Consent must be expressed but not implied.
57. It refers to the theory being followed by the New Civil Code of the Philippines for the determination of moment
of perfection of contract. It is the theory followed in Philippine jurisdiction.
a. Manifestation theory — The contract is perfected from the moment the acceptance is declared or made.
b. Expedition theory — The contract is perfected from the moment the offeree transmits the notification of
acceptance to the offeror.
c. Reception theory' — The contract is perfected from the moment that the notification of acceptance is in
the hands of the offeror.
d. Cognitive theory — The contract is perfected from the moment the offeree's acceptance comes to
the knowledge of the offeror.
58. When does the acceptance made by letter or telegram bind the offerer?
a. From the time he sent his offer.
b. From the time the acceptance was sent by the other party.
c. From the time the acceptance came to the knowledge of the offerer.
d. From the time the parties signed the written contract.
59. A contract entered into through letter, telegram or telephone is presumed to have been entered in what place?
a. In the place where the offer was made.
b. In the place where the acceptance was made.
c. In the place where the written contract was signed.
d. In the place where the object of the contract can be found.
60. The following are the requisites of an offer, except
a. It must be definite.
b. It must be uncertain.
c. It must be complete.
d. It must be intentional.
61. A offers his watch to B for P500. B said that he will buy it for P450. Is the contract perfected?
a. Yes because the consent is manifested.
b. Yes provided B will pay P450.
c. No because there is no delivery of the watch.
d.
No because a qualified acceptance constitutes a counter-offer.
62. On January 1,2011, A wrote a letter to B offering him to lease a building. On January 2,201 1, B sent a letter to A
advising him that his offer was accepted. This letter was received by A at 2:55pm that day. On the same day, in the
morning, at 1 1:25, A had already written a letter to B, withdrawing the offer to lease the building. The letter
revoking the offer was received by B at 3:55pm. Is the contract perfected?
a. Yes because the offer was accepted by B before the revocation was received by him
b. Yes because the contract is perfected from the moment B send the letter of acceptance.
c. No because before the acceptance is known, the offer can be revoked, it not being necessary, in order for
the revocation to have the effect of impeding the perfection of the contract, that it be known to the offeree.
d. No because the contract is perfected only by the execution of written contract.
63. The following statements concerning consent are correct, except
a. An acceptance may be expressed or implied.
b. The person making the offer may fix the time, place and manner of acceptance, all of which must
be complied with.
c. An offer made through an agent is accepted from the time acceptance is communicated to his principal.
d. When the offerer has allowed the offeree a certain period to accept, the offer may be withdrawn at any
time before acceptance by communicating such withdrawal, except when the option is founded
upon a consideration, something paid or promised.
64. Before the acceptance is conveyed, an offer becomes ineffective upon the happening of the following to either
offeror or acceptor, except
a. Civil interdiction
b. Insanity
c. Death
d. Insolvency
e. Sickness
65. A offered B to purchase his car. A allowed B two weeks to accept the offer. A and B also entered into a contract of
option for the two weeks allowance and B paid P200 for the option. Can A withdraw the offer before acceptance
by B?
a. Yes because an offer may be withdrawn by offerer before the acceptance is communicated.
b. No because the option contract is supported by a consideration.
c. No because the offer cannot be withdrawn once given.
d. Yes because the contract is not yet perfected.
66. A department store advertises a Christmas sale of men's and women's shoes, those of men at a price of P200 and
above, and those of women's at PI 00 and above. Can anyone of the public make an acceptance of the offer?
a. Yes because business advertisements of things for sale are definite offers.
b. No because business advertisements are mere invitations to make an offer,
c. Yes because those who advertises are estopped.
d. No because an offer cannot be made through an advertisement.
67. ABC Inc. makes an advertisements for bidders of its land. J-Z is the highest bidder. Is ABC bound to accept the
offer of the highest bidder?
a. Yes because advertisements for bidders are definite offers.
b. No because advertisements for bidders are simply invitation to make proposals.
c. Yes because in auction sale the highest bidder is always the winner.
d. No because the lowest bidder should be the winner.
68. The following persons cannot give consent to a contract, except
a. Unemancipated minors
b. Insane except during lucid interval
c. Demented persons
d. Deaf-mutes who do not know how to write
e. Blind persons who cannot speak
69. What is the status of a contract entered into between a person who can give consent and an unemanciated minor,
insane or demented persons or deaf-mutes who do not know how to write?
a. Voidable on the part of the incapacitated person
b. Voidable on the part of the capacitated person c, Unenforceable
c. Null and void
70. What is the status of a contract entered into between an unemancipated minor and an insane or demented person?
a. Voidable
b. Rescissible
c. Unenforceable
d. Null and void
71. A contract is entered into between A, a minor and B, an insane person. C, the father of A ratified the contract.
What is the status of the contract after ratification?
a. Voidable
b. Rescissible
c. Unenforceable
d. Null and void
72. What is the status of a contract entered into during a lucid interval?
a. Perfectly valid
b. Voidable
c. Rescissible
d. Unenforceable
73. What is the status of a contract agreed to in a state of drunkenness or during a hypnotic spell?
a. Voidable
b. Rescissible
c. Unenforceable
d. Null and void
74. What is the status of a contract wherein consent is wanting and wherein consent is vitiated, respectively?
a. Valid and Voidable
b. Voidable and void
c. Void and voidable
d. Void and unenforceable
75. The following are the requisites of consent, except
a. It should be intelligent.
b. It should be free.
c. It should be spontaneous.
d. It should be vitiated.
76. What is the status of a contract entered into wherein consent is given through fraud, undue influence, mistake,
intimidation or violence (F-U-M-I-V)?
a. Voidable
b. Rescissible
c. Unenforceable
d. Null and void
77. Which of the following vices of consent if committed by a third person who did not take part in the contract may
annul or make the contract voidable at the judicial discretion of the court?
a. Fraud and undue influence
b. Intimidation and violence
c. Fraud, undue influence and violence
d. Intimidation, violence and undue influence
78. The following types of mistakes may result to invalidity or voidability of a contract, except
a. Mistake which should refer to the substance of the thing which is the object of the contract.
b. Mistake which should refer to those conditions which have principally moved one or both parties to enter
into the contract.
c. Mistake as to identity or qualifications of one of the parties wherein such identity or qualifications have
d. been the principal cause of the contract.
e. Mutual error as to the legal effect of an agreement when the real purpose of the parties is frustrated.
f. Simple mistake of account.
79. The following errors do not vitiate consent, except
a. Error as to the solvency of the other party.
b. Error as to the motive of the party.
c. Error as to estimates.
d. Error as to basis of contract
80. A and B entered into a contract of sale of a piece of land, not knowing that the said property has already been the
object of another sale under different terms and conditions, by their duly representatives. What is the status of the
second contract?
a. Rescissible
b. Voidable
c. Unenforceable
d. Null and void
81. When one of the parties is unable to read, or if the contract is in a language not understood by him, and mistake or
fraud is alleged, who shall shoulder the burden of proof in case of lawsuit arising from this contract?
a. The person alleging mistake or fraud.
b. The person enforcing the contract.
c. Third person interested in the contract.
d. Any person.
82. One of the parties agrees to an upset price in a contract of sale with full knowledge of the favorable or unfavorable
possibilities with respect to the essential circumstances of the contract. What is the status of the contract?
a. Voidable because there is mistake in the upset price.
b. Null and void because upset price is prohibited by law in any type of contract.
c. Valid and without defect because there is no mistake if the party alleging it knew the doubt,
contingency or risk affecting the object of the contract.
d. Unenforceable because it violates statute of frauds.
83. If one of the parties believed that he received a certain amount as a loan, which the other delivered as a real
deposit, what is the status of the contract?
a. Voidable contract of loan on the part of the first party.
b. Voidable contract of real deposit on the part of the second party.
c. Valid contracts of loan and deposit on both parties.
d. Null and void because of want of consent.
84. Which of the following statements is correct?
I.
There is violence when in order to wrest consent, serious or irresistible force is employed.
II. There is intimidation when one of the contracting parties is compelled by a reasonable and well-grounded
fear of an imminent and grave evil upon his person or property, or upon the person or property of his spouse,
descendants or ascendants, to give his consent.
a. Both I and II
b. Neither I nor II
c. I only
d. II only
85. The following are the requisites of violence to vitiate consent, except
a. There must be physical force.
b. The physical force must be irresistible,
c. It refers to moral force or compulsion.
d. The force must be the determining cause in giving the consent to the contract.
86. The following are the requisites of intimidation to vitiate consent, except
a. The intimidation must be the determining cause of the consent,
b. The threatened act must be Just or lawful
c. The threat must be real and serious.
d. It must produce a reasonable and well-grounded fear.
87. A borrowed money from B. Upon failure of A to pay the loan, B threatened A to file a collection suit against A if
the latter will not execute the contract of mortgage. As a result of the threat, A entered into the contract of
mortgage, what is the status of the contract of mortgage?
a. Void because threat is illegal
b. Voidable because the consent of A is vitiated
c. Valid and binding because the claim of B is just and legal.
d. Unenforceable because there is violation of statute of fraud.
88. Which of the following statements is correct?
I.
There is undue influence when a person takes improper advantage of his power over the will of
another, depriving the latter of a reasonable freedom of choice.
II.
There is fraud when, through insidious words or machinations of one of the contracting parties, the other is
induced to enter into a contract which, without them, he would not have agreed to.
a. Both I and II
b. Neither I nor II
c. I only
d. II only
89. Which of the following statements is incorrect?
a. Violence or intimidation shall annul the obligation, although it may have been employed by a third person
who did not take part in the contract.
b. Failure to disclose facts, when there is duty to reveal them, as when the parties are bound by confidential
relations, constitutes fraud,
c. A mere expression of an opinion does not signify fraud, unless made by an expert and the other party has
relied on the former's special knowledge.
d. The usual exaggerations in trade, when the other party had an opportunity to know the facts, are
in themselves fraudulent,
90. The following are the requisites of fraud to vitiate a consent, except
a. It must have been employed by one of the contracting parties only.
b. It must have induced the other party to enter into the contract.
c. It must have been serious.
d. It must result to injury or damage to the party asking for annulment of contract.
91. A and B entered into a contract of sale. In the performance of the contract, A committed fraud. What is the remedy
of B?
a. To ask for annulment of contract because there is dolo incidente.
b. To ask for damages because there is dolo causantea
c. To ask for damages because there is dolo incidente.
d. To ask for annulment of contract because there is dolo causante.
92. Through insidious words and fraudulent machinations by B, A entered into a contract with B. What is the remedy
a.
b.
c.
d.
To ask for annulment of contract because there is dolo incidente.
To ask for damages because there is dolo causante.
To ask for damages because there IS dolo incidente
To ask for annulment of contract because there is dolo causante,
93. The following statements are correct, except
a. Misrepresentation by a third person does not vitiate consent, unless such misrepresentation has created
substantial mistake and the same is mutual.
b. Misrepresentation made in good faith is not fraudulent but may constitute error.
c. In order that fraud may make a contract voidable, it should be serious and should not have been employed
by both contracting parties.
d. d, Incidental fraud may entitle the injured party for annulment of contract.
94. What is the effect when both parties use fraud reciprocally?
a. Any of the parties may ask for annulment of contract.
b. The contract is voidable for both parties.
c. The fraud of one compensates that of the other, and neither party can ask for annulment of the contract
because they are in pari delicto.
d. Any of the parties may ask for damages.
95. What is the status of absolutely simulated or fictitious contract?
a. Voidable
b. Null and void which is subject to action for declaration of nullity
c. Unenforceable
d. Rescissible
96. What is the status of relatively simulated contract?
a. All contracts are void.
b. The intended contract is valid but the stated contract is void requiring reformation of instrument.
c. The contract is voidable.
d. The contract is unenforceable.
97. Which of the following statements is correct?
I.
In absolute simulation, there is color of a contract, without any substance thereof, the parties not having any
intention to be bound.
II.
In relative simulation, the parties have an agreement which they conceal under the guise of another contract.
a. Both I and Il
b. Neither I nor Il
c. I only
d. Il only
98. What is the remedy of the parties in case of relatively simulated contract?
a. Ask for annulment of contract.
b. Ask for declaration of nullity of contract.
c. Ask for reformation of instrument.
d. Ask for rescission of contract.
99. What is the remedy of the parties in case of absolutely simulated contract?
a. Ask for annulment of contract.
b. Ask for declaration of nullity of contract.
c. Ask for reformation of instrument.
d. Ask for rescission of contract
100.
It refers to the promise or conduct to be performed in the performance of the contractual, and may consist
of giving, doing or not doing a thing. It is the thing, right or service which is the subject matter of the obligation,
arising from the contract. It is one of the essential elements of contract.
a. Execution of formality or solemnity required by law
b. Consent of the contracting parties
c. Object certain which is the subject matter of the contract
d. Cause of the obligation which is established
101.
a.
b.
c.
d.
The following are the requisites of an object of a contract, except
The object must be within the commerce of men.
It must be licit, or not contrary to law, morals, good customs, public order or public policy.
It must be impossible.
It must be determinate as to its kind.
a.
b.
c.
d.
e.
The following objects may be considered an object of a contract, except
Future things
Hereditary rights
All rights which are not intransmissible
Future inheritance
All services not contrary to law, morals, good customs, public order or public policy
102.
103.
Before Don Lasal dies, his heirs enter into an agreement for the partition of the estate of their father. What
is the status of the contract?
a. Voidable
b. Null and void because the subject matter is future inheritance
c. Unenforceable
d. Rescissible
104.
After Don Miguel died, one of the heirs entered into a contract renouncing his right to inherit. What is the
status of the contract?
a. Valid and binding because the subject matter is a hereditary right
b. Null and void
c. Unenforceable
d. Rescissible
105.
It refers to the immediate and proximate purpose of the contract or the essential reason which impels the
contracting parties to enter into it and which explains and justifies the creation of the obligation through such
contract. It is one of the essential elements of contract.
a. Object of contract
b. Cause of contract
c. Consent of contract
d. Form of contract
106.
107.
I.
Which of the following statements concerning the cause of the contract is incorrect?
a. In onerous contracts the cause is understood to be, for each contracting party, the prestation or promise of
a thing or service by the other.
b. In remuneratory contracts, the cause is the service or benefit which is remunerated.
c. In contracts of pure beneficence or gratuitous contract, the cause is the mere liberality or generosity of the
benefactor.
d. The cause of accessory contract should be different from the very cause or consideration of the principal
contract.
Which of the following statements is incorrect?
Contracts without cause or with unlawful cause produce no effect whatever and are considered null and
void.
II.
Contracts without motive or with unlawful motive produce no effect whatever and are considered null and
void.
a. I only
b. Il only
c. Both I and Il
d.
108.
a.
b.
c.
d.
Neither I nor Il
Which of the following statements is incorrect?
a, The statement of a false cause in contracts shall render them void, if it should not be proved that they
were founded upon another cause which is true and lawful.
Although the cause is not stated in the contract, it is presumed that it exists and is lawful, unless the debtor
proves the contrary.
As a general rule, lesion or inadequacy of cause shall invalidate a contract.
The particular motives of the parties in entering into a contract are different from the cause thereof.
109.
When, three having been a meeting of minds of the parties to the contract, their true intention is
not expressed in the instrument purporting to embody the agreement, by reason of mistake, fraud, inequitable
conduct or accident, what is the remedy of one of the parties?
a. Ask for annulment of the contract because the consent is vitiated.
b. Ask for reformation of the instrument to the end that such true intention may be expressed.
c. Ask for rescission of the contract.
d. Ask for indemnification for damages.
110.
If mistake, fraud, inequitable conduct or accident has prevented a meeting of the minds of the parties,
what is the proper remedy?
a.
b.
c.
d.
111.
112.
113.
Ask for reformation of the instrument.
Ask for annulment of the contract.
Ask for rescission of the contract.
Ask for indemnification for damages,
The following are the instances wherein reformation of the instrument is the proper remedy, except
a. When a mutual mistake of the parties results to the failure of the instrument to disclose their real
agreement. b. If one party was mistaken and the other acted fraudulently or inequitably in such a way that
the instrument
does not show their true intention.
c. When one party was mistaken and the other knew or believed that the instrument did not state their real
agreement but concealed that fact from the former.
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 true intention of the parties.
e. If two parties agree upon the mortgage or pledge of real or personal property, but the instrument states that
the property is sold absolutely or with a right of repurchase.
f. When one of the parties was induced to enter into a contract through fraud, undue influence, mistake,
intimidation or violence.
a.
b.
c.
d.
There shall be no reformation of instrument in the following eases, except
Simple donation inter vivos wherein no condition is imposed or unconditional simple donation
Wills whether holographic or notarial
When the real agreement is void
Deed of pacto de retro sale
The following may ask for the reformation of an instrument, except
a. a. Either party if the mistake is mutual.
b. Injured party
c. Successors in interest, heirs and assigns of injured party
d. Guilty party
114.
One of the parties has brought an action to enforce the instrument, may he subsequently ask for
its reformation?
a. Yes because the remedies are available as successive rights.
b. No because there has been an election as between inconsistent remedies.
c. Yes because the injured party can never be estopped.
d.
No if there is stipulation to that effect.
115.
If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, how
shall the court apply or interpret the provisions of the contract?
a. The intent of the contracting parties shall still be construed.
b. The literal meaning of its stipulation shall control.
c. The hidden meaning should be determined.
d. The contract shall be enforced even if contrary to law.
116.
a.
b.
c.
d.
117.
a.
b.
c.
d.
e.
118.
In case of conflict between the evident intention of the parties and the words of contract, which shall prevail?
The words or letter of the contract shall prevail over the intention of the parties.
The intention of the parties shall prevail over the words of the contract.
The contract shall be annulled because of ambiguity.
The contract shall be declared null and void.
The following are the rules for interpreting or construing a contract, except
In order to judge the intention of the contracting parties, their contemporaneous and subsequent acts shall
be principally considered.
However general the terms of a contract may be, they shall not be understood to comprehend things that
are distinct and cases that are different from those upon which the parties intended to agree.
If some stipulation of any contract should admit several meanings, it shall be understood as bearing that
import which is most adequate to render in effectual.
The various stipulations of a contract shall be interpreted together, attributing to the doubtful ones that
sense which may result from all of them taken jointly.
If the contract is clear, the judge must interpret and construe it in order to determine the hidden motive of
the contracting parties.
The following are the rules for interpreting or construing a contract, except
Words which may have different significations shall be understood in that which is most in keeping with
the nature and object of the contract.
b.
The usage or custom of the place shall be borne in mind in the interpretation of the ambiguities of a
contract,
and shall fill the omissions of stipulations which are ordinarily established.
c.
The interpretation of obscure words or stipulations in a contract shall not favor the party who caused the
obscurity.
d.
Whenever the contract provides for payment of penalty in case of breach, it shall be interpreted liberally in
favor of the awarding of penalty.
a.
119.
When it is impossible to settle doubts by the rules established in the preceding numbers, and the doubts
refer to incidental circumstances of a gratuitous contract such as donation or commodatum, what shall be
the interpretation of the contract?
a.
The doubt shall be settled in favor of the greatest reciprocity of interest.
b.
The greatest transmission of rights and interest shall prevail.
c.
The least transmission of rights and interest shall prevail.
d.
The contract is null and void.
120.
When it is impossible to settle doubts by the rules established in the preceding numbers and the doubts
refer to incidental circumstances of an onerous contract such as sale or lease, what shall be the interpretation of
the contract?
a.
The least transmission of rights and interest shall prevail.
b.
The doubt shall be settled in favor of the greatest reciprocity of interest.
c.
The greatest transmission of rights and interest shall prevail.
d.
The doubt shall be resolved in favor of the debtor.
121.
Where a contract is susceptible of being interpreted as a sale with a right of repurchase and as a loan with
an equitable mortgage, what shall be the interpretation of the contract?
a.
The contract is a sale with a right of repurchase.
b.
The contract is an absolute sale.
c.
d.
The contract is a lease.
The contract is a loan with equitable mortgage.
122.
If the doubts are cast upon the principal object of the contract in such a way that it cannot be known what
may have been the intention or will of the parties, what shall be the status of the contract?
a. Valid and binding
b. Voidable
c. Null and void
d. Unenforceable
123.
I.
II.
III.
IV.
Indicate the proper order from least defective to most defective contract.
Rescissible contract is a contract that has caused a particular damage to one of the parties or to a third person,
and which for equitable reasons may be set aside even if it is valid.
Voidable or annullable contract is contract in which the consent of one party is defective, either because of
want of capacity or because it is vitiated, but which contract is valid until set aside by a competent court.
Unenforceable contract is a contract that for some reason cannot be enforced, unless it is ratified in the
manner provided by law.
Void or inexistent contract is an absolute nullity and produces no effect, as if had never been executed or
entered into and cannot be ratified,
a. IV – III – II – I
b. I – II – III – IV
c. II – I – IV – III
d. I – III – II - IV
124.
It is contract that has caused a particular damage to one of the parties or to a third person, and which for
equitable reasons may be set aside even if it is valid.
a. Rescissible
b. Voidable
c. Unenforceable
d. Void
125.
a.
b.
c.
d.
e.
The following are the characteristics of rescissible contracts, except
They are valid and binding until rescinded.
They are not susceptible of ratification but convalidated by prescription.
The proper legal remedy is an action for rescission of contract.
They may not be assailed by the third persons affected by it.
After the rescission, they are no longer effective and will result to mutual restitution.
126.
What are the two types of rescissible contracts?
a. Those contracts entered into by the debtor in fraud of creditors.
b. Those entered into by guardians or representatives in behalf of wards or absentee when the latter suffer
lesion by more than 1/4 value of the things which were the object thereof.
c. Both A and B.
d. Neither A nor B.
127.
The following contracts are intended to defraud creditor and therefore rescissible, except
a. Those undertaken in fraud of creditors when the latter cannot in any other manner collect the claims due
them.
b. Those which refer to things under litigation if they have been entered into by the defendant without the
knowledge and approval of the litigants or of competent judicial authority.
c. Payments made in a state of insolvency for obligations to whose fulfillment the debtor could not
be compelled at the time they were effected.
d. All contracts by virtue of which the debtor alienates property by gratuitous title when the donor did not
reserve sufficient property to pay all debts contracted before the donation.
e. Alienations by onerous title when made by persons against whom some judgment has been rendered in
any instance or some writ of attachment has been issued.
f. Contracts entered into by an insolvent person if he does not retain sufficient property' to pay his
obligations.
g. Those entered into between two incapacitated persons.
128.
Which contract is rescissible?
a. Those which are entered into by guardians whenever the wards they represent suffer lesion by more than
1
/4 the value of the things which are the object thereof.
b. Those agreed upon in representation of absentees, if the latter suffer more than 1/4 the value of the things
which are the object thereof.
c. Both A and B.
d. Neither A nor B
129.
It is a remedy granted by law to the contracting parties and even to third persons, to secure the reparation
of damages caused to them by a contract, even if this should be valid, by means of the restoration of things to
their condition at the moment prior to the celebration of said contract.
a. Annulment of contract
b. Rescission of contract
c. Declaration of nullity of contract
d. Ratification of contract
130.
The following are the requisites in order that an action for rescission of a contract or accion pauliana may
prosper, except
a. The contract must be rescissible.
b. The party asking for rescission must have no other legal means to obtain reparation for damages suffered
by him.
c. The person demanding rescission must be able to return whatever he may be obliged to restore if
rescission is granted.
d. The things which are the object of the contract must not have passed legally to the possession of a third
person acting in good faith.
e. The action for rescission must be brought within the prescriptive period of I year.
131.
The following statements concerning rescission of contracts are correct, except
a. The action for rescission is a remedy of last resort because it can be instituted even when the party
suffering damage has no other legal means to obtain reparation for the same.
b. Rescission shall be only to the extent necessary to cover the damages caused.
c. Rescission creates the obligation to return the things which were the object of the contract, together with
their fruits, and the price with its interest; consequently, it can be carried out only when he who demands
rescission can return whatever may be obliged to restore.
d.
Rescission will not prosper when the things which are the object of the contract are legally in the
possession of third persons who did not act in bad faith.
e. In case rescission is not possible, the indemnity for damages may be demanded from the person causing
the loss.
f. The action for rescission may be filed only by a contracting party but not by a third person affected by
such rescissible contract.
132.
What is the liability of a third person who acquires in bad faith the things alienated in fraud of creditors?
a. He shall indemnify the creditor for damages suffered by them on account of alienation whenever it
should be impossible for him to return them.
b. He shall not be liable for damages.
c. He shall be liable for damages even if he can return the things alienated.
133.
What is the prescriptive period of an action for rescission?
a. 4 years
b. 10 years
c. 6 years
d. 5years
134.
The following are the rules to be observed in counting the 4-year prescriptive period of an action for
rescission, except
a. For incapacitated persons or under guardianship, 4 years shall be counted from the termination of the
ward's incapacity.
b. For absentee, 4 years shall be counted from the date the domicile of absentee is known.
c. For contracts intended to defraud creditor, 4 years shall be counted from the knowledge of the contract.
d. For contracts intended to defraud creditor but involving immovable, 4 years shall be counted from the
registration of the sale.
e. For all rescissible contracts, 4 years shall be counted from the date of the contract.
135.
It is a contract in which the consent of one party is defective, either because of want of capacity or
because it is vitiated, but which contract is valid until set aside by a competent court.
a. Rescissible
b. Voidable
c. Unenforceable
d. Void
136.
a.
b.
c.
d.
e.
The following are the characteristics of voidable contracts, except
They are valid and binding until annulled.
They are susceptible of ratification which extinguishes the action for annulment.
After the annulment, they are no longer effective and will result to mutual restitution.
The proper legal remedy available to the injured party is action for annulment of contract.
They may be assailed by a third person.
137.
The following contracts are voidable or annullable, even though there may have been no damage to the
contracting parties, except
a. Those where one of the parties is incapable of giving consent to a contract.
b. Those where the consent is vitiated by fraud, undue influence, mistake, intimidation or violence.
c. Those where the contracts do not comply with statute of fraud.
138.
What is the prescriptive period of an action for annulment?
a. 4 years
b. 1 0 years
c. 6 years
d. 5 years
139.
The following are the rules to be observed in counting the 4-year period for prescription of an action for
annulment, except
a. In cases of intimidation, violence or undue influence, 4-year period shall begin from the time the defect of
the consent ceases.
b. In cases of fraud or mistake, 4-year period shall begin from the time of the discovery of the same.
c. In cases of contracts entered into by wards or incapacitated persons, 4-year period shall begin from the
time the guardianship or incapacity ceases.
d. For all voidable contracts, 4-year period shall be counted from the date of contract.
140.
Which of the following extinguishes the action to annul a voidable contract?
a. Ceasing of the intimidation, violence or undue influence
b. Discovery of the mistake or fraud
c. Ceasing of the guardianship
d. Ratification
141.
The following statements concerning ratification are correct, except
a. Ratification may be effected expressly or tacitly.
b. Ratification may be effected by the guardian of the incapacitated person.
c. Ratification requires conformity of the contracting party who has no right to bring the action for
annulment.
d.
Ratification cleanses the contract from all its defects from the moment it was constituted.
142.
The following may ask for annulment of voidable contracts, except
a. Guardian of a' minor
b. Guardian of an insane or demented person
c. Party whose consent is vitiated
d. Party who is capable or the party who committed the vices of consent
143.
The following statements pertaining to the effects of annulment of contract are correct, except
a. The contracting parties shall restore to each other the things which have been the subject matter of the
contract with their fruits and the price with interests.
b. In obligations to render service, the value thereof shall be the basis for damages.
c. When the defect of the contract consists in the incapacity of one of the parties, the incapacitated person is
not obliged to make any restitution except insofar as he has been benefited by the thing or price received
by him.
d. Annulment of contract may be availed to by the capacitated contracting party or by the contracting party
who vitiated the consent of the other party.
144.
The following statements pertaining to the effects of annulment of contract are correct, except
a. Whenever the person obliged by the decree of annulment to return the thing cannot do so because it has
been lost through his fault, he shall return the fruits received and the value of the thing at the time of the
loss, with interest from the same date.
b. The action for annulment of contracts shall be extinguished when the thing which is the object thereof is
lost thorough the fraud or fault of the person who has a right to institute the proceedings,
c. If the loss of action is based upon the incapacity of any one of the contracting parties, the loss of the thing
shall not be an obstacle to the success of the action, unless said loss took place through the fraud or fault
of the plaintiff.
d. One of the contracting parties may be compelled to restore what in virtue of the decree of annulment he
is bound to return even if the other does not restore what is incumbent upon him.
145.
It is a contract that for some reason cannot be enforced, unless it is ratified in the manner provided by
law. a. Rescissible
b. Voidable
c. Unenforceable
d. Void
146.
a.
b.
c.
d.
147.
The following are the characteristics of unenforceable contracts, except
They are valid but not enforceable by court action.
They are susceptible of ratification which makes the contract enforceable.
There is no proper legal remedy but to leave the contract as it is.
They may be assailed by third persons.
The following contracts are unenforceable unless they are ratified, except
a. Those entered into in the name of another person by one who has been given no authority or
legal representative or who has acted beyond his powers.
b. Those that do not comply with the statute of frauds.
b. Those where both parties are incapable of giving consent to a contract.
c. Those which are absolutely simulated or fictitious.
148.
It refers to a term which is a descriptive of statutes which require certain classes of contracts to be in
writing and regulates the formalities of contract necessary to render it enforceable and to prevent fraud or perjury.
a. Statutory construction
b. Statute of fraud
c. Statute of liberty
d. Statute of freedom
149.
The following executory contracts shall be in writing to be enforceable under statute of fraud, except
a. An agreement that by its terms is not to be performed within one year from the making thereof.
b. A special promise to answer for the debt, default or miscarriage of another (contract of guaranty).
c. An agreement made in consideration of marriage, other than a mutual promise to marry.
d. An agreement for the sale of goods, chattels or things in action (movable property) at a price not less than
P500.
e. An agreement for the leasing of real property (immovable property) for a period longer than one year
regardless of rent.
f. An agreement for the sale of real property (immovable property) or of an interest therein regardless of
price.
g. A representation to the credit of a third person.
h. An agreement for the loan of a sum of money exceeding P500.
150.
The following statements concerning ratification of unenforceable contracts are true, except
a. The sale of property made by a person without authority of the owner is unenforceable in the beginning
but afterwards it becomes perfectly valid by the ratification of the owner.
b. Contracts infringing Statute of Frauds are ratified by the failure to object to the presentation of
oral
evidence to prove the same or by the acceptance of benefits under them.
c. When a contract is enforceable under the Statute of Frauds, and a public document is necessary for the
registration in the Registry of Deeds, the parties may compel each other to execute the required form.
d.
Motion to dismiss may still be availed in an action filed for exact fulfillment even the contract has
already been ratified.
151.
The following statements concerning ratification of unenforceable contracts are true, except
a. In a contract where both parties are incapable of giving consent, express or implied ratification by the
parent, or guardian, as the case maybe, of one of the contracting parties shall give the contract the same
effect as if only one of them were incapacitated.
b. In a contract where both parties are incapable of giving consent and if ratification is made by the parents
or guardians, as the case may be, of both contracting parties, the contract shall be validated from the
inception.
c. Ratification of unenforceable contracts will make them valid and binding.
d. Unenforceable contracts can be assailed by third persons.
152.
It is a contract that is an absolute nullity and produces no effect, as if had never been executed or entered
into and cannot be ratified.
a. Rescissible
b. Voidable
c. Unenforceable
d. Void
153.
The following are the characteristics of void contracts, except
a. The contracts produce no effect whatsoever either against in or in favor of anyone.
b. The proper legal remedy is action for declaration of nullity of void contract.
c. As a general rule they cannot be confirmed or ratified except that declaration of nullity of some void
contracts may be barred by reason of estoppel or laches in exceptional cases,
d. If they have been performed, the restoration of what has been given is in order.
e. They may be assailed by any third persons whose interests are directly affected.
f. They are valid and binding until annulled.
154.
The following contracts are inexistent and void from the beginning (Void Ab Initio), 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.
c. Those whose cause or object did not exist at the time of the transaction.
d. Those whose object is outside the commerce of men.
e. Those which contemplate impossible services.
f. Those where the intention of the parties relative to the principal object cannot be ascertained.
g. Those expressly prohibited or declared void by law.
h. Those which are relatively simulated.
155.
a.
b.
c.
d.
What is the remedy of the injured party in case of null and void contracts?
Action for rescission of contract
Action for declaration of nullity of contract
Action for annulment of contract
Action subrogatoria
156.
What is the prescriptive period for the action for declaratation of nullity of void contract or defense of
nullity of a void contract?
a. 10 years
b. 4 years
c. 6 years
d. No prescriptive period but the action may be barred by laches or estoppel
157.
Which of the following void contracts may become exceptionally binding by reason of estoppel?
a. Those contracts which are illegal per se.
b. Those contracts involving crimes.
c. Those contracts which are contrary to public policy.
d. Those which fail to comply with formality required by law for validity but they do not affect third
persons.
158.
What is the status of contract of lease of public streets or thoroughfares entered by a city government
with private market stallholders?
a. Voidable
b. Perfectly valid
c. Unenforceable
d. Null and void
159.
The following statements concerning void contracts are correct, except
a. The defense of illegality of contracts is available to third persons whose interests are directly affected.
b. A contract which is the direct result of a previous illegal contract is also void and inexistent.
c. In case of a divisible contract, if the illegal terms can be separated from the legal ones, the latter may be
enforced.
d. When the law sets or authorizes the setting of a minimum wage for laborers, and a contract is agreed
upon by which a laborer accepts a lower wage, he shall be entitled to recover the deficiency.
e. When the law fixes, or authorizes the fixing of the maximum number of hours of labor, and a contract is
entered into whereby a laborer undertakes to work longer than the maximum thus fixed, he may demand
additional compensation for services rendered beyond the time limit.
f. When the price of any article or commodity is determined by statute or by authority of law, any person
paying any amount in excess of the maximum price allowed may recover such excess.
g. The concept of pari delicto still allows the contracting party to file an action for declaration of nullity.
160.
The following statements concerning void contracts are correct, except
When the agreement is not illegal per se but is merely prohibited, and the prohibition by law is designed
for the protection of the plaintiff, he may, if public policy is thereby enhanced, recover what he has paid
or delivered.
Where one or the parties to an illegal contract is incapable of giving consent, the courts may, if the interest
of justice so demands, allow recovery of money or property delivered by the incapacitated person.
When money is paid or property delivered for an illegal purpose, the contract may be repudiated by one
the parties before the purpose has been accomplished or before any damage has been caused to
third person. In such a case, the courts may if the public interest will thus be sub served, allow
the pmt)' repudiating the contract to recover the money or property.
Interest paid in excess of the interest allowed by the usury laws may be recovered by the debtor, with
interest thereon from the date of payment.
Contracts that are products of originally void contract are also null and void.
Void contracts may be assailed by third persons whose interests are not directly affected by the nullity of
the contract.
a.
b.
c.
d.
e.
f.
161.
When the nullity of the contract proceeds from the illegality of the cause or object of the contract and the
act constitutes a criminal offense, which of the following is incorrect?
a. When both parties are in pari delicto, they shall have no action against each other.
b. Both criminals shall be prosecuted.
c. They can recover the proceeds of the crime.
d. The instruments of the crime shall be forfeited in favor of the government.
e. If only one of the parties is guilty, the innocent one may claim what he has given and shall not be bound
to comply with his promise.
162.
If the act in which the unlawful or forbidden cause consists does not constitute a criminal offense, which
of the following rules are correct?
I.
When the fault is on the part of both contracting parties, neither may recover what he has given by virtue
of the contract or demand the performance of the other's undertaking.
II.
When only one of the contracting parties is at fault, he cannot recover what he has given by reason of
the contract or ask for the annulment of what has been promised to him, The other, who is not at fault,
may demand the return of what he has given without any obligation to comply with his promise.
a. Neither I nor Il
b. Both I and Il
c. I only
d. Il only
163.
It is a real and gratuitous contract wherein one of the parties delivers to another, either something not
consumable so that the latter may use the same for a certain time and return it.
a. Contract of commodatum
b. Contract of lease
c. Contract of loan
d. Contract of deposit
164.
It is a real and onerous or gratuitous contract wherein one of the parties delivers to another money or
other consumable thing, upon the condition that the same amount of the same kind and quality shall be paid.
a. Contract of commodatum
b. Contract of lease
c. Contract of 16an or mutuum
d. Contract of deposit
165.
It is a real and onerous or gratuitous contract wherein a person receives a thing belonging to another, with
the obligation of safely keeping it and of returning the same and the safekeeping of the thing delivered is the
principal purpose of the contract.
a. Contract of commodatum
b. Contract of lease
c. Contract of loan or mutuum
d. Contract of deposit
166.
It is an accessory contract which must be in writing if executory to be enforceable whereby a person
subsidiarily binds himself to the creditor to fulfil the obligation of the principal debtor in case the latter should
fail to do so.
a. Contract of guaranty
b. Contract of surety
c. Contract of pledge
d. Contract of mortgage
167.
It is a secondary contract to a valid obligation whereby a party ensures the performance of another of
an obligation or undertaking in favor of another party but the liability of guarantor is solidary, direct,
primary
and absolute although he possesses no direct or personal interest over the obligations nor does he receive any
benefit thereon.
a. Contract of
guaranty b.
Contract surety
c. Contract pledge
d. Contract of mortgage
168.
It is a consensual and onerous contract wherein one party binds himself to give another the enjoyment
or use of a thing for a price certain, and for a period which may be definite or indefinite.
a. Contract of loan or
mutuum b. Contract of
lease
c. Contract of deposit
d. Contract of commodatum
For the following scenario, determine the status of the contract entered into: (A)-Valid and Binding (B)Rescissible
(C)Voidable (D)-Unenforceable (E)-Null and Void
169. A, a minor, sold in writing his cellphone to B, a capacitated person for P 1,000. The book
value Of the cellphone is still P 1,500 so A suffered a lesion by more than 1/4 the value of the thing which is
the object thereof.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
170. A, the debtor and B, the creditor entered into a contract of loan secured by personal properties of A. To
defraud
B, A sold in writing all his properties to C at a price equivalent to its fair market value. (Status of contract of
sale)
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
171 .G, the guardian of minor M, sold in writing the house and lot of M at a selling price of P7M when its
book value is P10M. The sale is without prior approval of guardianship court.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
172. A orally sold a piece of land to B in the amount of P200,000 payable in four installments. B already paid
P50,000 representing the first installment.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
173.A, agent of P, sold the land of P in P 's name to B orally. The authority of A is not in writing and B has
already paid the whole purchase price to A.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
174.A and B orally entered into a contract of partnership to be organized and operated two years from today.
They will contribute P5,000 cash each.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
175.A, B and C orally entered into a contract partnership to be formed 3 years from today. They will
contribute a piece of land, a building and P2,000 cash.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
176.A, a minor, orally sold the cell phone of his brother at a selling price of P 500. The buyer already paid P
100 of the selling price to A.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
177.An oral contract of construction of building the construction of which has already commenced but to will
be completed within a period of 5 years.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
178.A orally entered into a contract for a piece of work of cake at a price of P50(). The performance and
payment of price shall be done after 5 months.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
179.A, agent of P, orally sold the house of P to B at a price of P499. The authority of A is not in writing.
Payment and delivery have not yet been made.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
180.A orally entered into a contract of barter with B involving a cellphone and a laptop. The values of the
cellphone and laptop are P5,000 and P8,000, respectively. The exchange will happen after 6 months
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
181.Contract of pledge entered in a private instrument with the description and date of the thing to be pledged but
without delivery of the thing pledged.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
182. OralIy agreed contract of donation of cellphone with fair market value of P 10,000 completed by delivery by
donor and oral acceptance by donee.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
183. A married man of mature years donated a parcel of land to a girl of 16 subject to the condition that the latter
shall cohabit with him and such condition is accepted by the girl.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
184. A mother sold two fishponds to a daughter and the latter, in turn, resold the same fishponds to her stepfather.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
185. A Filipino leased a parcel of land to a foreigner for 99 years with an option to buy the property within 50
years provided that the latter shall become a Filipino.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
186. A written contract for the transfer of piece of land at an amount of P900,000 with a fair market value of PIM.
Delivery and payment have not yet been made.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
187. An oral contract of real estate mortgage over a piece of land owned by third person entered into by a creditorbank and third person to secure the loan of principal debtor.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
188. An oral contract of commodatum of a specific bag without delivery of the bag.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
189. Written contract of chattel mortgage over shares of stocks without registration in Chattel Mortgage Registry.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
190. The wife orally sold a land which is a community property to a third person without the consent of the
husband at a price of P60,000 when its book value is P 100,000.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
191. A defendant in an action reinvidicatoria sold in writing the subject movable to a third person during the
pendency of the action at a price of P75,000 when its book value is P 100,000.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
192. Oral contract of sale of a cellphone with a price of P400 but delivery and payment will be made after 15
months
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
193. Oral contract of lease of car with an annual rental of P500 for a lease term of 10 years.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
194. Oral contract of sale of a piece of land with a price of P499 but delivery and payment will be made after I
month.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
195. An oral contract of guaranty.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
196. A written contract of sale of a piece of land with a price of P499 between a demented and an insane person
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
197. An oral contract of sale of B's calculator at a price of P499 entered by A in B's name without authority from
B.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
198. An oral contract of lease of land with a term of 15 months. Advance rental payment has been made by lessee
to lessor.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
199. G, the guardian of M, a minor, orally sold M's cellphone at a selling price of P500 to I, an insane person.
Delivery and payment have not yet been made.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
200. M, an insane orally sold a Shabu at a price of P 1,000 although its book value is PI ,500, to I, an insane
person. Delivery and payment have not yet been made.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
201. An oral contract of lease of land for a term of I year entered into between A, a minor and I, an insane person.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
202. An oral contract of sale of house with a price of P2M and book value of P 1.4M entered into by seller to
escape liability to his creditors. Delivery and payment have not yet been made.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
203. A donation of house and land made in private instrument by the debtor who has a pending civil action
without reserving enough property for his obligations.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
204. A orally entered into a contract of subscription of 100 shares of stocks of ABC Corporation at a price of
P500. Payment of the subscribed shares will happen after one month.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
205. An oral contract of sale of cellphone at a price of P1,000 between husband and wife who are covered by
absolute community or conjugal property regime. Delivery and payment will happen after 2 months.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
206. A written contract of sale of car with a price of P70,000 and book value of P 100,000 between husband and
wife who are covered by regime of absolute or complete separation of property . The husband pointed a gun to
the wife to sign the deed of sale. Delivery and payment have not yet been made.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
207. The representative of an absentee orally sold a bike of the latter at a price of P40,000 when its book value is
P60,000. The buyer has already paid the price.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
208. The guardian orally purchased the bike of his minor child at a price of P500 when its book value is P800.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
209. The minor orally sold the car of his guardian at the latter's name without prior consent. The sale is made at a
price of P30,000 and the car has a book value of P50,000. The buyer has already paid the price to the minor.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
210.An oral contract of sal.e of a cellphone between two capacitated persons at a price of P499 when its book
value is P700. Delivery and payment will be made after three years.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
211. A 5-year old child orally entered into a contract of employment as a model of a men's magazine without
permission from DOLE.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
212. A 17-year old student orally entered into a contract of service involving sexual intercourse with a prostitute
at a price of P500 which will be performed after 2 years. Payment has not yet been made,
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
213. A 16-year old student orally entered into a 5-year contract of lease of car at a rent of P500/year with a
leasing
company.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
214. A written contract of donation of cellphone with a value of P5,001 with acceptance also made in writing
made by a married man to his insane concubine.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
215. An oral contract of sale of land with a selling price of P6M and book value of P10M wherein delivery shall
be made after 3 years. The buyer has already paid a down payment of PIM at the perfection of the contract.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
216.A written contract of sale of planet Jupiter at a selling price of
P10M
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
217. An oral contract of sale of forest land or national park at a selling price of P 100M with partial payment of
P20M.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
218. A is a judgment debtor in an action to collect a sum of money. A writ of attachment has been issued against A.
The car of A is the first to be levied. A sold in writing his laptop at a selling price of P500 to B.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
219. Written contract of sale of Presidential Chopper to President Rodrigo Duterte at a selling price of P IOM
when its book value is still P40M.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
220. Written contract of real estate mortgage entered into by A and B after B threatened to file a collection suit
against A if A will not execute the real estate mortgage to secure his matured and demandable obligation to
pay a sum of money.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
221. Written contract of sale of cellphone at a price of P500 entered by A and B after B pointed a gun to A's wife
in order for A to give consent.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
222. Oral contract of sale of T-shirt at a price of P500 entered between SM and A after the saleslady of SM said
that A is handsome wearing that T-shirt. A has already paid the price.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
223. Written contract of sale of authentic Coach Bag between A and B at a price of P 10,000. At the time of
delivery, A delivered a counterfeited Coach Bag.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
224.Oral contract entered between A and B when A thought that the contract is one of commodatum while B
thought that the contract is one of real deposit.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
225. Written contract of jewelry in sale by auction entered by the highest bidder and seller at a price of PI 0,000
when the bidding is held without giving notice to bidders that the auctioneer will employ a by-bidder.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
226. A farmer and a bank entered into a contract of loan amounting to P500 with real estate mortgage over the
farmer's land. The amount of cash has already been delivered to the farmer. However, the bank's legal counsel
executed a deed pacto de retro sale. (Status of contract of loan and real estate mortgage)
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
227. Oral contract of antichresis entered into between the debtor and creditor with consensual agreement on the
principal and interest of the loan,
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
228. Written contract of sale of piece of land at a price of P1M when its book value is P 1.5M. The purchaser is
the trial court judge in the levy and execution of such land for satisfaction of judgment debt.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
229. Written contract of sale of laptop at a price of P 10,000 entered into by an insane agent, in behalf of his
capacitated principal, with a domestic corporation.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
230. Oral contract of lease of laptop for a period of 3 years entered into between a demented lessee and an insane
lessor, perfected during the lucid interval of the latter. The rental is P500 per month.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
231. Oral contract of agency entered into between a minor agent and an adult principal when the commission is
P500 per transaction.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
232. Written contract of sale of minor's bag entered into by his parent at a price of P600 when its book value is
P800 with Certified Public Accountant.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
233. Oral contract of lease for 2 years of absentee's bike at a rental of P500 per month when prevailing monthly
rental is P800 per month entered into by his legal representative with a lawyer.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
234. A and B are negotiating the sale of a specific house and lot owned by A. During the negotiation, A fell in love
with B. This prompted A to just donate the house and lot to B. Such donation was sealed by a kiss.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
235. A and B are negotiating the sale of a specific condominium unit with a market value of PI 500,000 owned
by A. During the negotiation, B narrated his life story to A. Because the life story of B is so touching, A decided
to just donate his condominium unit to B which is entered into and accepted into orally.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
236. Oral contract of sale of a bottle of rugby at a price of P200 between ACE Hardware Corporation and an 18year old person addicted to rugby entered into during the lucid interval of the latter.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
237. Written contract of sale of a specific chicken suffering from bird flu and a specific cow suffering from mad
cow disease at a price of P40() entered into between a demented partner and a minor.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
238. Written contract of sale of future inheritance entered into by the heirs of a predecessor before his death.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
239. Oral contract of subscription of shares of stocks between a subscriber and a corporation with amount of P500
with delivery and payment to be made after one month.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
240. Oral contract of sale of shares of stocks between an existing stockholder and prospective investor with
amount of P500. Delivery and payment will happen after one week.
(A)-Valid and Binding
(B)-Rescissible
(C)Voidable
(D)-Unenforceable
(E)-Null and Void
222. Oral contract of sale of T-shirt at a price of P500 entered between SM and A after the saleslady of SM said
that A is handsome wearing that T-shirt. A has already paid the price.
223. Written contract of sale of authentic Coach Bag between A and B at a price of P 10,000. At the time of
delivery, A delivered a counterfeited Coach Bag.
224.Oral contract entered between A and B when A thought that the contract is one of commodatum while B
thought that the contract is one of real deposit.
225. Written contract of jewelry in sale by auction entered by the highest bidder and seller at a price of PI 0,000
when the bidding is held without giving notice to bidders that the auctioneer will employ a by-bidder.
226. A farmer and a bank entered into a contract of loan amounting to P500 with real estate mortgage over the
farmer's land. The amount of cash has already been delivered to the farmer. However, the bank's legal counsel
executed a deed pacto de retro sale. (Status of contract of loan and real estate mortgage)
227. Oral contract of antichresis entered into between the debtor and creditor with consensual agreement on the
principal and interest of the loan,
228. Written contract of sale of piece of land at a price of P1M when its book value is P 1.5M. The purchaser is
the trial court judge in the levy and execution of such land for satisfaction of judgment debt.
229. Written contract of sale of laptop at a price of P 10,000 entered into by an insane agent, in behalf of his
capacitated principal, with a domestic corporation.
230. Oral contract of lease of laptop for a period of 3 years entered into between a demented lessee and an insane
lessor, perfected during the lucid interval of the latter. The rental is P500 per month.
231. Oral contract of agency entered into between a minor agent and an adult principal when the commission is
P500 per transaction.
232. Written contract of sale of minor's bag entered into by his parent at a price of P600 when its book value is
P800 with Certified Public Accountant.
233. Oral contract of lease for 2 years of absentee's bike at a rental of P500 per month when prevailing monthly
rental is P800 per month entered into by his legal representative with a lawyer.
234. A and B are negotiating the sale of a specific house and lot owned by A. During the negotiation, A fell in
love with B. This prompted A to just donate the house and lot to B. Such donation was sealed by a kiss.
235. A and B are negotiating the sale of a specific condominium unit with a market value of PI 500,000 owned
by A. During the negotiation, B narrated his life story to A. Because the life story of B is so touching, A decided
to just donate his condominium unit to B which is entered into and accepted into orally.
236. Oral contract of sale of a bottle of rugby at a price of P200 between ACE Hardware Corporation and an 18year old person addicted to rugby entered into during the lucid interval of the latter.
237. Written contract of sale of a specific chicken suffering from bird flu and a specific cow suffering from mad
cow disease at a price of P40() entered into between a demented partner and a minor.
238. Written contract of sale of future inheritance entered into by the heirs of a predecessor before his death.
239. Oral contract of subscription of shares of stocks between a subscriber and a corporation with amount of
P500 with delivery and payment to be made after one month.
240. Oral contract of sale of shares of stocks between an existing stockholder and prospective investor with
amount of P500. Delivery and payment will happen after one week.
Distinctions Among Defective
Contracts
Rescissible Contract
Unenforceable
As to validity
As to Legal
Remedy to injured
party
Prescriptive period
of
Action
Capability for
Ratification
which will clean
the
defects of the
contract.
Assailment by
a third person
Requirement of
Presence of
Lesion or Loss or
Damage
Example
s
Voidable Contract
Contract
Valid and binding until rescinded
Action for Rescission
of
Valid and
binding
annulled
It may be assailed by a
person affected by it.
It cannot be assailed
third person.
Yes
d.
e.
Action for Declaration
Nullity
May be ratified.
c.
Invalid
None
4 years
Not subject to ratification may
be convalidated prescription.
but by
b.
Valid but unenforceable b
court action
until
Action for Annulment
4 years
Period
a.
Void Contract
N/A
May be ratified.
It cannot be assailed by a
third person.
No
Those which are entered
into by guardians
f.
whenever the wards they
represent suffer lesion by
more than 1/4 the value of
the things which are the
object thereof;
Those agreed upon in
representation of absentees,
if the latter suffer more
than % the value of the
things which are the object
thereof;
Those undertaken in fraud
or creditors when the latter g.
cannot in any other
manner collect the claims
due them:
Those which refer to
things under litigation if
they have been entered
into by the defendant
without the knowledge
and approval of the
h.
litigants or of competent
judicial authority;
Payments made in a state
of insolvency for
obligations to whose
fulfillment the debtor
could not be compelled at
the time they were
effected.
All contracts by
virtue of which
the debtor
alienates
property by
gratuitous title
when the donor
did not
reserve sufficient
property to pay all
debts contracted
before the
donation.
Alienations by
onerous title when
made by persons
against
whom some
judgment has
been rendered in
any instance or
some writ of
attachment
has been issued.
Contracts entered
into by an
insolvent person
if he does not
retain sufficient
property to pay
his obligations.
No Prescriptive
No
a.
b.
Those where one of the
parties is incapable of
giving consent to a
contract.
Those where the consent
is vitiated by fraud,
undue influence,
mistake, intimidation or
violence.
I) Those illegal per
se can never be
ratified.
2) The declaration of
nullity of those which
are not illegal per se
may be barred by
estoppel or
laches in
exceptional
cases.
It may be assailed by a
third person directly
affected by it.
No
a.
Those entered into in
the name of another
person by one who
has been given no
authority or legal
representative or who
has acted beyond his
powers.
b. Those that do not
comply with the
statute of frauds.
c. Those where both
parties
are incapable of
giving consent to
a contract.
a.
b.
Tho
se
wh
ose
cau
se,
obj
ect
or
pur
pos
e is
con
trar
y to
law
,
mor
als,
goo
d
cust
om
s,
pub
lic
ord
er
or
pub
lic
poli
cy.
Th
os
e
w
hi
ch
ar
e
ab
so
lut
el
y
si
m
ul
at
ed
.
c. Those
whose
cause or
ob
jec
t
di
d
no
t
exi
st
at
the
ti
me
of
the
tra
ns
act
io
n.
d. Those whose object is
outside the commerce
or men.
e. Those which contemplate
impossible services.
f. Those where the intention
of the parties
relative to the principal
object cannot be
ascertained.
g. Those expressly
prohibited or declared
void by law.