CONTRACTS
CONTRACTS - DIAGNOSTIC EXERCISES
TEST I - MULTIPLE CHOICE. Select the best answer by writing the letter of your choice.
1.
A meeting of minds between two persons whereby one binds himself with respect to the
other to give something or to render some service is known as:
A. obligation.
B. consent.
C. contract.
D. stipulation.
2.
The stages of a contract according to the order of their occurrence are:
A. birth, conception and consummation.
B. conception, consummation and birth.
C. conception, birth and consummation.
D. consummation, conception and birth.
3.
The elements of a contract without which a contract would not exist are known as:
A. accidental elements.
B. natural elements.
C. special elements.
D. essential elements.
4.
A consensual contract has the following essential elements:
A. consent of the contracting parties, object certain and cause or consideration.
B. consent of the contracting parties, object certain, cause or consideration and delivery
of the object.
C. consent of the contracting parties, object certain, cause or consideration and
formalities required by law.
D. consent of the contracting parties, object certain, delivery of the object, and
formalities required by law.
5.
A real contract has the following essential elements:
A. consent of the contracting parties, object certain and cause or consideration.
B. consent of the contracting parties, object certain cause or consideration and delivery
of the object.
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C.
consent of the contracting parties, object certain, cause or consideration and
formalities required by law.
D. consent of the contracting parties, object certain, delivery of the object, and
formalities required by law.
6.
A solemn or formal contract has the following essential elements:
A. consent of the contracting parties, object certain and cause or consideration.
B. consent of the contracting parties, object certain, cause or consideration and delivery
of the object.
C. consent of the contracting parties, object certain, cause or consideration and
formalities required by law.
D. consent of the contracting parties, object certain, delivery of the object, and
formalities required by law.
7.
Elements that accompany certain contracts unless set aside or suppressed by the parties
are known as:
A. natural elements.
B. accidental elements.
C. essential elements.
D. original elements.
8.
The warranty against hidden defects in a contract of sale is an example of:
A. natural element.
B. accidental element.
C. original element.
D. stipulated element.
9.
They refer to particular stipulations of the parties in a contract
A. Accidental elements
B. Natural elements.
C. Inherent elements
D. Essential elements
10. One of the following is a natural element of a sales contract.
A. Terms of payment.
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B. Rate of interest.
C. Place of delivery.
D. Warranty against eviction.
11. A contract that can stand by itself is known as:
A. accessory contract.
B. principal contract.
C. commutative contract.
D. gratuitous contract.
12. A contract that does not have any special name under the law is known as:
A. nominate contract.
B. innominate contract.
C. special contract.
D. nominal contract.
13. A contract where both parties are required to do or give something is known as a:
A. bilateral contract.
B. unilateral contract.
C. gratuitous contract.
D. commutative contract.
14. A contract where the parties contemplate a real fulfillment, hence, equivalent values are
given is known as:
A. commutative contract.
B. gratuitous contract.
C. onerous contract.
D. aleatory contract.
15. The contracting 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. known as the principle of:
A. liberty of contract.
B. mutuality of contract.
C. relativity of contract.
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D. obligatory force of contract.
16. The contract must bind both contracting parties; its validity or compliance cannot be lef
to the will of one of them. This is known as the principle of:
A. mutuality of contract.
B. relativity of contract.
C. consensuality of contract.
D. freedom to contract.
17. Contracts take effect only between the contracting parties, their assigns and heirs, except
in cases where the obligations and rights arising from the contract are not transmissible
by their nature, or by stipulation or provision of law. This principle of contract is known
as:
A. relativity of contract.
B. mutuality of contract.
C. obligatory force of contract.
D. liberty of contract.
18. D borrowed P500,000.00 from C. D died without having paid his loan obligation to C. He
lef S, his son and heir, properties worth P400,000.00.
A. S is liable to C for P500,000.00.
B. S is liable to C for P400,000.00
C. S is liable to C for P100,000.00.
D. S is not liable at all because he should not be made to shoulder the obligation of his
father.
19. A contract may be enforced by or against a third person, except:
A. in the case of stipulation pour autrui
B. when a third person induces another to violate his contract.
C. in case of contracts intended to defraud creditors.
D. when the benefit to the third person is merely incidental.
20. The principle that contracts are perfected by mere consent is known as:
A. consistency of contract.
B. consensuality of contract.
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C. consummation of contract.
D. mutuality of contract.
21. Obligations arising from contracts have the force of law between the contracting parties
and should be complied with in good faith. From perfection, the parties are bound not
only to the fulfillment of what has been expressly stipulated but also to all the
consequences which, according to their nature, may be in keeping with good faith, usage
and law. This is known as the principle of:
A. consummation of contract.
B. consensuality of contract.
C. obligatory force of contract and compliance in good faith.
D. mutuality of contract.
22. One of the following is not a real contract.
A. Pledge
B. Commodatum
C. Deposit
D. Sale
23. D borrowed P100,000.00 from C. The obligation is secured by a mortgage on D's land and
building. C registered the mortgage with the Register of Deeds. Thereafer, D sold the land
and building to X who was not personally aware of the existence of the mortgage at the
time of sale since only the photocopy of the transfer certificate of title which did not yet
contain the annotation of the mortgage was shown to him. It was only when he went to
the Register of Deeds to register the sale of the land and building to him that he learned
of the mortgage.
A. C can collect from D and if D cannot pay, C can foreclose the mortgage although the
land and building are now owned by X
B. C can collect from D, but if D cannot pay, C cannot foreclose the mortgage because X
was not aware of the existence of the mortgage at the time he bought the land and
building.
C. C cannot collect from D. He can only go afer the mortgage which was given as
security.
D. C cannot foreclose the mortgage because X was not a party thereto.
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24. It is the manifestation of the meeting of the offer and the acceptance upon the thing and
the cause which are to constitute the contract.
A. Consideration
B. Contract
C. Consent
D. Cause
25. On June 1, 2015, S offered to sell his only car to B for P100,000.00. B accepted the offer by
mailing his letter of acceptance on June 10, 2015. On June 12, 2015, B revoked his
previous acceptance and mailed his letter of revocation on the same date. S received the
letter of acceptance on June 14, 2015 and the letter of revocation on June 15, 2015.
A. The contract was perfected on June 14, 2015 when S received B's letter of
acceptance.
B. The contract was not perfected because at the time the acceptance was received, the
parties were no longer of one mind.
C. The contract was perfected on June 10, 2015 when B sent his letter of acceptance.
D. The perfection of the contract retroacts to June 1, 2015 when the offer was made.
26. On May 1, 2015, S offered to sell a specific car to B for P500,000.00. B sent his letter of
acceptance to S on May 8, 2015. On May 10, 2015, however, S died in a vehicular accident
and his secretary received the letter of acceptance on May 12, 2015 unaware that S had
already died.
A. The contract was perfected on May 8, 2015 when B sent his letter of acceptance.
B. The contract was perfected on May 12, 2015 when the secretary of S received the
letter of acceptance.
C. The contract was not perfected because the offer of S became ineffective when he
died.
D. The contract was perfected on May 1, 2015 because the acceptance made by B on
May 8, 2015 retroacts to the date of the offer.
27. Three of the following instances will render an offer ineffective before acceptance is
conveyed. Which one will not?
A. Civil interdiction of either party.
B. Insolvency of either party.
C. Insanity of either party.
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D. Intoxication of either party.
28. S offers to sell his car to B for P125,000.00 cash. B accepts the offer but is willing to pay
only P120,000.00.
A. The contract was perfected at the price of P125,000.00.
B. The contract was perfected at the price of P120,000.00
C. The contract was perfected at the price of P122,500.00, the average price of the offer
and the acceptance.
D. The contract was not perfected because the acceptance by B was qualified and it
constituted a counter-offer.
29. P appointed A as his agent to sell P's only Honda Civic car for P400,000.00 cash. On
November 7, 2015, A, pursuant to the authority granted to him by P, offered to sell the car
to B at the price of P400,000.00. B accepted the offer on November 8, 2015 by sending a
letter of acceptance to A, which letter of acceptance was received by A on November 9,
2015. On November 10, 2015, A informed P that B had accepted the offer.
A. The contract was perfected on November 8, 2015 when B sent his letter of
acceptance.
B. The contract was perfected on November 9, 2015 when A received the letter of
acceptance.
C. The contract was perfected on November 10, 2015 when A notified P, the true owner
of the car, that B had accepted the offer.
D. The contract was perfected on November 7, 2015 since the acceptance by B retroacts
to the date of the offer
30. On July 1, 2015, Serrano offered to sell his only Mercedes Benz car for P1,000,000.00 to
Benitez who was interested in buying the same. In his letter to Benitez, Serrano stated
that he was giving Benitez up to July 31, 2015 to make up his mind whether to buy the car
or not. On July 25, 2015, Serrano personally went to Benitez to inform him that he was no
longer willing to sell the car unless the price was increased to P1,400,000.00 because
another buyer was interested in buying the car for the said amount of P1,400,000.00.
A. Benitez may compel Serrano to sell to him the car for P1,000,000.00.
B. Serrano may validly withdraw his offer to Benitez because the option was not
founded upon a consideration.
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C.
Serrano may not withdraw his offer until afer the lapse of the option period that he
gave to Benitez.
D. The increase in price made by Serrano was not valid because it was made within the
option period.
31. Rockman and Company published an advertisement in the newspapers which reads as
follows “INVITATION TO BID: Construction of the company's warehouse located at 123
Luzon Street, Sta. Quiteria, Quezon City.” The advertisement also included the
specifications of the warehouse to be constructed. Three companies submitted their bids:
ABC Company with a bid price of P4,500,000.00; DEF Company, P4,750,000.00; and GHI
Company, P5,000,000.00. Afer considering the financial capability, reputation and
experience of the bidders, the kind and quality of materials to be used and other factors,
Rockman and Company accepted the bid of DEF Company. ABC Company, the lowest
bidder, now questions the award made by Rockman Company to DEF Company which
submitted a higher bid.
A. The award to DEF Company is voidable because it was only the second lowest bidder.
B. ABC Company should be the winning bidder having submitted the lowest bid.
C. The award to DEF Company is valid because Rockman Company was not bound to
accept the lowest bidder.
D. The award to DEF Company is void by reason of Rockman's violation of the terms of
the invitation to bid.
32. One of the following is not incapable of giving his consent.
A. Insane persons.
B. Deaf-mutes who do not know how to write.
C. Deaf-mutes who know how to read.
D. Unemancipated minors.
33. A contract entered into by an incapacitated person is:
A. void.
B. voidable.
C. rescissible.
D. unenforceable.
34. Contracts entered into in a state of drunkenness or during hypnotic spell are:
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A.
B.
C.
D.
valid.
voidable.
rescissible.
void.
35. A contract entered into by an insane person during a lucid interval is:
A. valid.
B. voidable.
C. rescissible.
D. void.
36. Aside from fraud and undue influence, the following are the vices of consent, except:
A. violence.
B. intimidation.
C. mistake.
D. dealer's talk.
37. Mistake in three of the following will make a contract voidable. Which one will not?
A. Mistake as to the substance of the thing which is the object of the contract.
B. Mistake as to the principal conditions which principally moved one or both parties to
enter into the contract.
C. Mistake as to the identity or qualifications of one of the parties, which identity or
qualifications have been the principal cause of the contract.
D. Simple mistake of account,
38. It involves the employment of serious or irresistible force to obtain consent.
A. Intimidation.
B. Threat.
C. Violence.
D. Moral coercion.
39. It is present when one of the contracting parties is compelled by a reasonable and wellgrounded fear of an imminent and grave evil upon his person or property, or upon the
person or property of his spouse, descendants, and ascendants, to give his consent.
A. Violence.
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B. Physical coercion.
C. Intimidation.
D. Mistake.
40. One of the following contracts is not vitiated by intimidation or violence, and hence valid.
A. A contract of sale which was signed by a party because his arm was being twisted by
a third person.
B. A contract of sale which was entered into because the other party was pointing a gun
at his wife.
C. A contract where a party was compelled to assign his property to the other to pay a
just debt because the latter threatened to sue him in court if he does not pay his
debt.
D. A contract of donation of a parcel of land which a party signed because the other
party threatened to burn his house.
41. It exists when a person takes improper advantage of his power over the will of another
depriving the latter of a reasonable freedom of choice.
A. Intimidation
B. Duress
C. Threat
D. Undue influence
42. Fraud exists in three of the following. Which is the exception?
A. When through the insidious words or machinations of one of the contracting parties,
the other is induced to enter into a contract which, without them, he would not have
agreed to.
B. When there is a failure to disclose facts, when there is a duty to reveal them, as when
the parties are bound by confidential relations.
C. When there is an expression of an opinion by an expert which turned out to be
wrong, and the other party relied upon such expert knowledge.
D. When the misrepresentation refers to the usual exaggerations in trade, and the other
party had an opportunity to know the facts.
43. Abulencia,, who knew that his ring was embellished with glass, told Banzon that the
embellishment was emerald. Banzon, who knew that his watch was gold-plated, told
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Abulencia that it was made of pure gold. Banzon, believing that Abulencia's ring was
embellished with emerald, and Abulencia, believing that Banzon's watch was made of
pure gold, then entered into a contract whereby they exchanged their respective articles.
A week later, Banzon discovered that the ring was adorned only with an ordinary glass.
A. The contract may be annulled at the instance of Banzon since he discovered the
fraud.
B. The contract may be annulled at the instance of Abulencia since Banzon also
employed fraud.
C. The contract is void because of the bad faith of both parties; hence, it shall not
produce any effect.
D. Neither party may ask for annulment since both are guilty of fraud. The contract,
therefore, is valid.
44. An absolutely simulated contract is:
A. Void
B. voidable.
C. valid.
D. unenforceable.
45. One of the following statements does not pertain to a relatively simulated contract.
A. The parties conceal their real agreement.
B. The parties are bound by their real agreement provided it does not prejudice third
persons.
C. The parties are bound by their real agreement provided it is not contrary to law,
morals, third persons, public order or public policy.
D. The parties do not intend to be bound at all.
46. Servando and Bernardo entered into a contract where they made it appear that Servando
was mortgaging his lot and building to Bernardo to secure a contract of loan. The truth,
however, was that Servando was selling his lot and building to Bernardo. Which of the
followings statements is true?
A. The parties are bound by the contract of sale.
B. The parties are bound by the contract of loan and mortgage.
C. The parties are not bound at all.
D. The parties are bound by the contract of sale only when third persons are affected.
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47. One of the following is not a requisite of the object of a contract.
A. It must be within the commerce of men.
B. If it is a right, it must be intransmissible.
C. It must not be contrary to law, morals, good customs, public order or public policy.
D. It must be determinate as to its kind or capable of being made determinate without
the need of the parties entering into a new agreement.
48. S and B orally entered into a contract whereby S sold his one-year production of eggs in
his poultry farm to B for P50,000.00 which amount B immediately gave in cash to S. The
contract between Sand B is:
A. void because the object was not existing at the time of execution of the contract.
B. valid because future things may be the object of contracts.
C. rescissible because B will likely suffer damage if the eggs do not come into existence.
D. Unenforceable because the contract was not in writing.
49. A died leaving properties estimated at P1,000,000.00 to his sons S and T. Subsequently, S
sold one-half of his inheritance to X for P300,000.00, although his share was still to be
delivered.
A. The contract is valid since the inheritance is an existing inheritance.
B. The contract is void because what S sold is future inheritance which may not be the
object of a contract as a rule.
C. The contract is rescissible.
D. The contract is unenforceable.
50. A contract whose cause is the promise of a thing or service by the other party is:
A. an onerous contract
B. a gratuitous contract.
C. a lucrative contract.
D. a remuneratory contract.
51. A contract whose cause is the liberality of the benefactor is:
A. a gratuitous contract or contract of pure beneficence.
B. a remuneratory contract.
C. an aleatory contract.
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D. an onerous contract.
52. S sold his only car for P100 000.00 to B. Unknown to S, B bought the car from him so that
he could he could use the same in a bank robbery. What is the status of the sale of the car
by S to B?
A. The sale is void because the motive of B is illegal.
B. The sale is valid because the illegality of the motive of the parties to the contract
does not have any effect on its validity.
C. The sale is voidabie because of the failure of B to disclose his motive to S.
D. The sale is rescissible at the instance of S because he would be damaged by the illegal
motive of B.
53. One of the following is not a requisite of cause in a contract. Which is it?
A. It must exist.
B. It must be lawful.
C. It must not be false.
D. It must be clearly stated in the contract.
54. D and C entered into a contract wherein D agreed to give to C P50,000.00 within 30 days
from the date of the execution of their agreement, which, however, does not state the
consideration received by D from C. What is the status of the contract between D and C?
A. The contract is void because the cause is not stated in the contract.
B. The contract is valid because the cause is presumed to exist and that it is lawful.
C. The contract is rescissible because D suffered damage by reason of absence of cause.
D. The contract is valid provided another contract is executed between D and C to state
the cause.
55. The defective contracts arranged according to the degree of their defectiveness from the
least defective to the most defective are:
A. voidable, rescissible, unenforceable, and void contracts.
B. rescissible, unenforceable, voidable, and void contracts.
C. rescissible, voidable, unenforceable, and void contracts.
D. unenforceable, rescissible, voidable, and void contracts.
56. The following are characteristics of rescissible contracts, except:
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A.
B.
C.
D.
they may be set aside for equitable reasons.
they are valid until rescinded.
the action to rescind them prescribes.
the action to rescind them are not available to third persons even if their interests
are directly affected.
57. The following contracts are rescissible, except:
A. Those entered into by guardians whenever the wards whom they represent suffer
lesion by more than one-fourth of the value of the things which are the object of the
contract.
B. Those entered into in representation of absentees, if the latter suffer lesion by more
than one-fourth of the value of the things which are the object of the contract.
C. Those undertaken in fraud of creditors but the latter can still collect the claims due
them through other means.
D. 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.
58. G, the guardian of M, a minor, sold the fish harvested from the fishpond of M for
P7,400.00. The fish, however, had a value of P10,000.00
A. The sale is rescissible because M suffered lesion by more than one-fourth of the value
of the fish sold.
B. The sale is voidable because M is a minor.
C. The sale is unenforceable because G sold the fish without approval of the courts.
D. The sale is void because the object is outside the commerce of men.
59. The following are the requisites of a rescissible payment, except:
A. the debt is already due.
B. the debtor is insolvent.
C. the debtor pays the debt.
D. the payment is not yet due.
60. Rescission of a contract will prosper in one of the following cases. Which is it?
A. When there are other legal means to obtain reparation of the damages caused.
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B.
When he who demands rescission cannot return whatever he may be obliged to
restore.
C. When the object of the contract is in the possession of a third person who purchased
the property of the debtor in bad faith.
D. When the action to bring rescission has prescribed.
61. D owes the following creditors: X, P50,000.00; Y, P60,000.00; and Z, P90,000.00. He has
assets valued at P400,000.00. Subsequently, D donated, among his assets, a parcel of land
valued at P250,000.000 to C. The donation and acceptance were made in a public
instrument. The donation of the land made by D to C is:
A. rescissible, because it was presumed to have been made in fraud of creditors.
B. unenforceable, because D was not authorized by his creditors.
C. void, because the donation and acceptance should be registered.
D. voidable, because D does not have the free disposal of his property.
62. C filed a complaint in court against D to collect a money debt amounting to P500,000.00.
Afer due hearing, the court rendered judgment in favor of C. Shortly afer the rendition
of the judgment and before C has collected D's debt, D sold a parcel of land to X. Z,
another creditor, learned of the sale made by D to X and now files an action to rescind the
sale.
A. The right to rescind the sale is exclusively granted to Z because it was he who first
learned of the sale and he has still to file a claim to collect D's debt.
B. The right to rescind the sale is exclusively granted to C because it was he who
obtained a favorable judgment and he has not yet collected D's debt.
C. Both C and Z have a right to rescind the sale since the sale is presumed in fraud of
creditors having been made by party against whom judgment has been rendered. \
D. Neither C nor Z has a right to rescind the sale.
63. R, the representative of A, an absentee, sold the corn with a value of P30,000.00 and the
palay with a value of P50,000.00, harvested from A's agricultural farm for a total price of
P50,000.00. A, whose domicile was subsequently known, was informed of the sale made
by G. Based on the foregoing facts, which of the following statements is incorrect?
A. A may seek payment of an additional P30,000.00 to recover the damages suffered.
B. A may just seek rescission of the sale of the corn to recover the damages he suffered
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C.
A may seek rescission of the sale of part of the corn and part of the rice to the extent
of the damages he sustained.
D. A may seek the rescission of the total sale to recover the damages he suffered.
64. The following contracts are voidable, except:
A. contracts entered into during a state of drunkenness or hypnotic spell.
B. contracts entered into during a lucid interval.
C. contracts where one of the parties is incapable of giving consent.
D. contracts where the consent of one party is vitiated by violence, intimidation,
mistake, fraud or undue influence.
65. The action for annulment must be brought within four years. Which of the following is
false with respect to the reckoning of the beginning of the prescriptive period?
A. In cases of intimidation, violence and undue influence, the period begins from the
time the defect in the consent ceases.
B. In case of fraud, the period begins to run from the discovery thereof.
C. In case of mistake, the period begins to run from the time it was committed.
D. In cases of contracts entered into by minors or other incapacitated persons, the
period runs from the time guardianship ceases.
66. One of the following statements concerning ratification of a voidable contract is false.
Which is it?
A. Ratification extinguishes the action to annul a voidable contract.
B. Ratification cleanses the contract from all its defects from the moment it was
constituted.
C. Ratification requires the conformity of the party who has no right to bring the action
for annulment.
D. Ratification may be made by the guardian of the incapacitated person, or the
incapacitated person upon attaining capacity, or the party whose consent was
vitiated.
67. One of the following may not annul a voidable contract.
A. The party whose consent is vitiated by violence, intimidation, mistake, fraud or
undue influence.
B. The incapacitated person when he attains capacity.
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C. The guardian, during the ward's incapacity.
D. The party who is capable of entering into a contract.
68. S, an employee of a private company, sold his car for P100,000.00 to B, whom he knew
was only 17 years old. S delivered the car to B who immediately paid the amount of
P100,000.00. Later, S was transferred to another branch of his employer which was quite
a distance from his residence. He wanted to get back the car from B so that will have
something to use in going to and from his new office. Neither B nor his guardian has
registered the sale with the Land Transportation Office.
A. S can file an action to annul the sale he made to B because he was mistaken in selling
the car which he realized he badly needed.
B. S can ask the court to annul the sale because B was a minor when the contract of sale
was entered into and it has not yet been recorded with the Land Transportation
Office.
C. Only B, when he attains the age of majority, or his guardian, while B is still a minor,
can bring an action to annul the contract.
D. The minority of B has no effect on the validity of the contract since the parties
entered into the contract of sale freely.
69. The following contracts are unenforceable, except:
A. those entered into by one who has no authority or legal representation.
B. those that do not comply with the Statute of Frauds.
C. those where both parties are incapable of giving consent to a contract.
D. those where the consent of a party is vitiated by violence, intimidation, mistake,
fraud or undue influence.
70. Under the Statute of Frauds, certain contracts must be in writing to be enforceable. One
of the following contracts is enforceable although not in writing. Which is it?
A. Sale of movables at a price of not less than P500.00.
B. A representation as to the credit of a third person.
C. An agreement made in consideration of marriage other than mutual promise to
marry.
D. An agreement for the leasing for a longer period than one year of a personal
property.
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71. The Statute of Frauds applies only to:
A. wholly executed contracts.
B. contracts wholly or partially executed on the part of the debtor.
C. contracts wholly or partially executed on the part of the creditor.
D. wholly executory contracts.
72. Severino, orally sold a one-square meter lot for P475.00 to Benedicto, chairman of
Barangay Mapayapa, who was officially authorized in a barangay resolution to look for
and buy a lot where the barangay would construct a barangay marker. Since Benedicto did
not have sufficient cash at that time, he told Severino that he would give the amount the
following day. The next day, Benedicto went to the place of Severino to pay the price of
the lot but Severino refused to accept it, saying that the sale is unenforceable not being in
writing.
A. The sale of the lot is enforceable although not in writing because the price is less
than P500.00.
B. The sale is enforceable because Benedicto was duly authorized to buy the lot through
a resolution which is in writing
C. The sale of the lot is void not being in a public instrument.
D. The sale is unenforceable since the sale of real property must be in writing regardless
of the price to be enforceable.
73. On June 1, 2014, Mother Lilac, a movie producer, met Claudine Santos, a movie actress at
the lobby of the Manila Hotel. Mother Lilac informed Claudine Santos that she was
producing a movie the filming of which would start on August 1, 2015 and that she was
offering Claudine Santos the starring role for a fee of P2,000,000.00. Claudine Santos
accepted the offer and shook hands with Mother Lilac to seal their agreement. However,
Mother Lilac gave Claudine Santos a check for P200,000.00 as initial payment. On August
1, 2015, Mother Lilac called Claudine Santos for the shooting of the movie but Claudine
Santos refused to honor the agreement saying that it was not enforceable, not being in
writing
A. Mother Lilac cannot enforce the contract against Claudine Santos because it was
entered into orally.
B. Mother Lilac can enforce the contract against Claudine Santos because Claudine
Santos had accepted benefits under the contract.
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C.
Claudine Santos may just return the payment because it was made in check which is
not legal tender.
D. Claudine Santos is not bound under her agreement with Mother Lilac because she
did not sign any writing
74. D was driving on his way to Manila from the province when he suffered a busted tire. Not
having any spare tire, he went to a nearby car spare parts store to buy a new tire.
However, he did not have sufficient money with him so he phoned G, his friend, who
happened to know S, the store owner. G then instructed D to give to S the telephone
through which G told S “Don't worry. If D cannot pay, just charge me.” D was thus able to
buy a new tire for P6,000.00 for which S issued D a sales invoice.
A. If D cannot pay, S can proceed against G to make good his promise to pay D's debt.
B. G's promise cannot be enforced against him because he did not execute any writing
for the guaranty he made.
C. S can enforce G's promise to answer for D's debt since the guaranty was witnessed by
D.
D. S can enforce G's promise because there was a writing of some kind, the invoice for
the sale of the tire.
75. A month ago, S, 17 1/2 years old, orally sold his bicycle for P2,000.00 to B, his neighbor,
who was only 16 years old. M, the mother of S, learned about the sale by S of his bicycle,
and demanded that S give her the amount he received. S, thus gave the proceeds of the
sale to his mother who spent the same for the family's daily expenses. F, the father of B,
also learned about the purchase by B of the bicycle when he saw it parked at their door
and began using it almost daily since B bought it. Based on the foregoing facts, what is
now the status of the sale entered into between S and B?
A. Unenforceable because both parties were incapacitated to enter into the contract.
B. Unenforceable because the sale was not in writing.
C. Validated from inception because of the subsequent acts of the parent of the parties.
D. Voidable because while B was only 16 years old, S was nearing the age of majority
which is 18 years.
76. The following contracts are void or inexistent, except:
A. those whose cause, object or purpose is contrary to law, morals, good customs,
public order or public policy.
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B. those which are absolutely simulated or fictitious.
C. those whose cause or object did not exist at the time of the transaction.
D. those where one of the parties employed fraud to obtain the consent of the other,
77. The following contracts are void or inexistent, except:
A. those whose object is outside the commerce of men.
B. those which contemplate an impossible service.
C. those where the intention of the parties relative to the principal object of the
contract cannot be ascertained.
D. those where one of the parties is guilty of fraud in performing his obligation.
78. The following are characteristics of void or inexistent contracts, except:
A. the right to set up the defense of illegality cannot be waived.
B. the action or defense for the declaration of the inexistence of a contract does not
prescribe.
C. a void contract can be ratified by the acceptance of benefits under it by one or both
of the parties.
D. the defense of illegality of contracts is not available to third persons whose interests
are not directly affected.
79. If the illegal contract between the parties is a criminal offense and both parties are guilty
(in pari delicto), such illegal contract shall produce the following effects, except:
A. the parties shall have no right of action against each other.
B. both parties shall be criminally prosecuted.
C. the effects and instruments of the crime will be confiscated in favor of the
government.
D. the parties may recover what they have given if it is not illegal in itself.
80. If the illegal contract between the parties is a criminal offense but only one party is guilty,
such illegal contract shall produce the following effects, except:
A. the guilty party will be criminally prosecuted.
B. neither party may compel the other to comply with his undertaking.
C. the instruments shall be confiscated in favor of the government.
D. the innocent party cannot recover what he has given.
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81. If the contract is illegal but it does not constitute a criminal offense and only one party is
guilty, such illegal contract shall produce the following effects, except:
A. the guilty party cannot recover what he has given.
B. the guilty party cannot ask for the fulfillment of what has been promised him.
C. the innocent party cannot be compelled to comply with his promise.
D. the innocent party cannot demand the return of what he has given.
82. The following contracts are required to appear in a public document for the convenience
of the parties so that they may be registered into the proper recording office, except:
A. contracts which have for their object the creation of real rights over immovable
property.
B. the acceptance of an inheritance.
C. the power to administer property.
D. the cession of actions or rights proceeding from an act appearing in a public
document.
83. Reformation of instruments has the following requisites, except:
A. there must be a meeting of minds of the parties to the contract.
B. the true intention of the parties is not expressed in the instrument.
C. the failure of the instrument to express the true intention of the parties is due to
mistake, fraud, inequitable conduct or accident.
D. the contract must be in a public instrument.
84. Reformation of an instrument is available in the following, cases, except:
A. when a mutual mistake of the parties causes the failure of the instrument to disclose
their agreement.
B. when one party was mistaken and the other party acted fraudulently or inequitably
in such a way that the instrument does not show their true intention.
C. when a party was mistaken and the other knew or believed that the instrument did
not state their real agreement.
D. when one of the parties has brought an action to enforce the contract.
85. Reformation is not available in the following cases, except:
A. simple donations inter vivos wherein no condition is imposed.
B. wills.
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C. when the real agreement is void.
D. when through the ignorance, lack of skill, negligence or bad faith on the part of the
person drafing the instrument or of the clerk or typist, the instrument does not
express the intention of the parties.
86. As a rule, a contract of sale is perfected:
A. upon compliance with the requirements of the law as to form.
B. upon delivery of the object of the contract.
C. Upon the meeting of the minds on the thing which is the object of the contract and
upon the price.
D. Upon demand.
87. With the intention of raising money to buy a gun which he would use in killing X, his
mortal enemy, S sold his only car for P100,000.00 cash to B who knew nothing of the
intention of S in selling the car. Afer the sale, S was able to buy a gun complete with all
the papers required by law. B, on the other hand, was able to register the car in his name
at the Land Transportation Office.
A. The sale of the car by S to B is valid provided S does not kill X.
B. The sale of the car by S to B is void if S kills X.
C. The sale of the car by S to B is valid whether S kills X or not.
D. The sale of the car by S to B is void whether S kills X or not.
88. Six years ago, Marcelo, 17 years old, sold his one-hectare agricultural to Bernardo for
P100,000.00. Marcelo invested the proceeds of the sale in a business which was
successful at the start but had gone through difficult times as a result of the economic
crisis. He thought of the agricultural lot that he sold to Bernardo which had been enjoying
bumper crops since Bernardo bought it from him. Marcelo now approaches you to seek
your help on whether it would still be possible to annul the sale of the agricultural lot to
Bernardo. What advice will you give to Marcelo?
A. Only Marcelo may annul the sale on the ground of his incapacity.
B. Only Bernardo may annul the sale on the ground of Marcelo's incapacity.
C. Neither Marcelo nor Bernardo may annul the sale on the ground of Marcelo's
incapacity.
D. Both Marcelo and Bernardo may annul the sale on the ground of Marcelo's
incapacity.
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89. A contract of sale is not a:
A. principal contract.
B. nominate contract.
C. consensual contract.
D. real contract.
90. Gregorio, a wealthy businessman, had ofen paid the debts of Demetrio, his younger
brother, in order to maintain the family's good name. One day, Gregorio received a text
message in his cell phone from Bernardo, a banker, informing Gregorio that Demetrio had
obtained a loan from the bank but had fallen behind in his payments. Gregorio texted
back as follows: “Don't worry. If he doesn't pay in three months, I will be the one to pay."
No other information was contained in the body of the text message. Afer three months,
Bernardo sent again a text message to Gregorio to inform him that Demetrio had not
made any payments and that Bernardo was demanding payment from Gregorio on
account of the promise he had made three months before.
A. Bernardo may enforce payment against Gregorio on account of his promise since he
had been paying off the other debts of Demetrio.
B. Bernardo may not demand payment from Gregorio because Gregorio's promise is
unenforceable.
C. Bernardo may enforce payment against Gregorio as long as Bernardo did not erase in
his cell phone the text message he received from Gregorio which is a written
evidence of Gregorio's promise.
D. Bernardo may enforce payment from Gregorio because as a wealthy businessman,
Gregorio should protect his name and that of his family.
91. Perfecto offered to sell his house and lot to Reynaldo for P1,500,000.00. Perfecto told
Reynaldo that he was giving Reynaldo thirty (30) days to decide whether to buy or not the
house and lot. Reynaldo accepted the option but did not give anything to Perfecto to
support the option given to him. Twenty days later, Perfecto found another buyer who
was ready to buy the house and lot for P2,000,000.00. Perfecto wants to ask you whether
he can still withdraw the offer he made to Reynaldo. Decide.
A. Yes, Perfecto may withdraw the offer because he stands to gain an added profit of
P500,000.00 and this will be more than enough to pay any damages to Reynaldo.
B. Yes, Perfecto may withdraw the offer by just informing Reynaldo of such fact.
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C.
No, Perfecto may not withdraw the offer because the option was accepted by
Reynaldo although Reynaldo did not give anything in support thereof.
D. No, Perfecto may not withdraw his offer until the lapse of the period given to
Reynaldo to exercise his option.
92. D insured his house against fire with C Insurance Company. The insurance policy which
was prepared and printed by C Insurance Company was signed by D afer reading its
terms. You are to determine which of the following characterize the contract between D
and C Insurance Company.
I.
Auto-contract.
II.
Contract of adhesion.
III.
Aleatory contract.
IV.
Nominate contract.
The contract between D and C Insurance Company is:
A. I, II and III.
B. II, III and IV.
C. I, II and IV.
D. I, III and IV.
93. Datiles obtained from Cortez a loan of P50,000.00 which was payable in 2 months. Datiles
failed to pay the debt on the due date despite repeated demands from Cortez. When the
debt was still outstanding afer 6 months, Cortez asked his counsel, Atty. Antolin, to write
a letter to Datiles to demand payment within one (1) week and with a threat of court
action if no payment was not received within the said period. Datiles, afraid of the threat
of a court action against him, was constrained to sign a deed assigning his lot in favor of
Cortez to pay his debt.
A. The deed of assignment is voidable because of intimidation employed upon Datiles.
B. The deed of assignment is valid and enforceable, the threat of a court action made by
Cortez through his lawyer being a legitimate exercise of his right.
C. The deed of assignment is voidable because of the undue influence exerted by Atty.
Antolin, the counsel of Cortez, on Datiles.
D. The deed of assignment is void because Datiles did not give his consent voluntarily.
94. D obtained a loan of P100,000.00 from C. The loan agreement showed that the loan was
payable within one year with interest at 6% per annum. However, there was no provision
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saying that the rights and obligations of the parties would be transmitted to their heirs or
successors in-interest. Before maturity, C died leaving his son S as heir. Which of the
following statements is correct?
A. S cannot collect from D because no mention was made in the agreement that the
credit right would be transmitted to the heirs of C.
B. S can collect from D although no mention was made in the agreement that the credit
right would be transmitted to the heirs.
C. S cannot collect from D because the credit right is personal to C.
D. S cannot collect from D because the law prohibits the transmission of credit rights.
95. W, a woman, agreed to live with H, a man, as the wife of H without the benefit of
marriage in exchange for the monthly support of P10,000.00 that H would give to W. Both
H and W are single, of legal age, and there is no legal impediment for them to get
married. Their parents have no objections to the two getting married. Based on the
foregoing information, which of the following statements is true?
A. The agreement between H and W is valid because they can legally get married if they
want to.
B. The agreement between H and W is void for being contrary to morals.
C. H may legally demand that W live with him as his wife.
D. W may legally demand that H give her the monthly support of P10,000.00 that he
had promised.
96. Angel dela Guardia, guardian of Eduardo Menor, a minor, sold the palay harvested from
the land belonging to Eduardo Menor for P42,000.00. The palay had a value of
P50,000.00. At the time of the sale seven months ago, Eduardo was 17 ½ years old.
Eduardo wants to recover the damages he suffered under the contract entered into by his
guardian. What is the remedy available to Eduardo Menor?
A. Annulment because Eduardo Menor was only 17 ½ years old at the time the sale was
made by Angel dela Guardia.
B. Rescission because Eduardo Menor suffered lesion of P8,000.00
C. Both rescission and annulment.
D. Neither rescission or annulment.
97. Which of the following contracts is rescissible?
A. Contracts entered into during a hypnotic spell.
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B. Contracts entered into in a state of drunkenness.
C. Contracts entered into to defraud creditors when the latter cannot collect the claims
due them.
D. Contracts where both parties are incapable of giving consent.
98. A, a duly authorized agent of P, wrote a letter to B on August 1, 2015 offering to sell P's
only Mercedes Benz car for P200,000.00 cash. On August 3, 2015, B wrote a letter to A
stating that he was accepting all the terms of the offer, which letter was received by A on
August 5, 2015. Before A could relay such acceptance to P, P died in a vehicular accident
on August 6, 2015.
A. The contract was not perfected because P, the real party to the sale, died before the
acceptance came to his knowledge.
B. The contract was perfected on August 1, 2015.
C. The contract was perfected on August 3, 2015.
D. The contract was perfected on August 5, 2015.
99. The cause of a contract differs from the motive of each party to the contract in that
motive:
A. is an essential element of a contract.
B. although illegal, does not affect the validity of the contract.
C. is always known by the other party.
D. when illegal will render the contract void.
100.P is a minister of a certain church whose members include X. X regularly confides in P
because of his many personal problems. P is interested in buying the lot of X and uses his
position as elder of the church and confidant of X to convince X to sell to him the lot.
Should X sell the lot to P by reason of P taking advantage of his confidential relationship
with X, the contract between them would likely be voidable because of:
A. intimidation.
B. undue influence.
C. fraud.
D. mistake.
`
101.M, a movie actor who has fathered many children by different women, donated a house
and lot to X believing that the latter was his illegitimate son. The deed of donation and its
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acceptance were in a public instrument and a new certificate of title to the house and lot
was issued in the name of X. A few months later, M discovered that X was not his son but
that of another movie actor. M now wants to annul the contract.
A. M may no longer annul the contract because all requisites have been complied with
and a new title already issued in the name of X.
B. M may annul the contract on the ground of mistake as to the identity of X.
C. M may not annul the contract but he can rescind it because he suffered damages.
D. M need not annul the contract but he can have it declared void ab initio.
102.S convinced B to buy a gold-plated bar which S told B was made of pure gold. B bought
the thing believing that it was really made of pure gold. The contract between S and B is:
A. valid.
B. voidable.
C. rescissible.
D. void.
103.D went to the store of C and asked the latter to sell him construction materials on credit.
Since C did not know him, he denied D's request. R, a rich businessman in the community,
happened to be at the store at that time and overheard the conversation. He told C, “I
personally know D. He has a good credit reputation.” Accordingly, C granted credit sale to
D. The sale was evidenced by an invoice issued by C. Later, however, C could not collect
from D because it turned out that the representation made by R as to the credit of D was
false.
A. C can go afer R for damages by reason of the latter's misrepresentation.
B. C cannot go afer R for damages because R's representation was not in writing.
C. C can go afer R because there was a sales invoice evidencing the sale
D. C can go afer R because it was R's representation that induced him to grant a credit
sale to D. The form of the representation is immaterial.
104.On June 1, 2015, S and B entered into an oral contract of sale whereby S sold his
computer to B for P50,000.00. The parties agreed that S shall deliver the computer to B
on June 10, 2015 at the place of B. B, however, is required to pay the price upon
agreement. B complied with his obligation by paying the price to B in cash on June 1,
2015. As of June 1, 2015 –
A. The contract of sale between S and B is wholly executory.
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B. The contract of sale between S and B is wholly executed.
C. The contract of sale between S and B is partly executed.
D. The contract of sale should be in writing before it can be determined whether it is
executed or executory.
105.B bought a baby boy from S. B knew that the baby boy was his illegitimate son by a
woman named, W, and which W sold to S. The contract between B and Sis:
A. valid.
B. void.
C. unenforceable.
D. voidable.
106.D, out of his love and affection for C, donated a parcel of land to the latter who accepted
it. The formalities required by law were complied with. The contract between D and C is:
A. an onerous contract.
B. a gratuitous contract.
C. a remuneratory contract.
D. an accessory contract.
107.The cause of the contract in Number 106 is:
A. the parcel of land.
B. the acceptance of the donation by C.
C. the generosity of D.
D. the contract has no cause because C did not give any consideration to D.
108.Which of the following contracts is valid, enforceable and would not require any further
act for the convenience of the parties other than its registration with the proper
government office?
A. Oral sale of a piece of land made through an agent whose authority is in a public
instrument.
B. Sale of a piece of land in a public instrument made through an agent whose authority
was given orally by the principal.
C. Sale of a piece of land in a private instrument made through an agent whose
authority is in a public instrument.
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D. Sale of a piece of land in a public instrument made through an agent whose authority
is in a public instrument.
109.S sold his only horse to B for P30,000.00. The parties agreed that S shall deliver the horse
one week from the execution of their agreement. B, however, is required to pay the price
immediately in certified check. In the place of S and B, it was the custom that anyone
selling a horse should place a horseshoe on its hooves. However, the was not stated in the
agreement including how the horse would be cared for before delivery.
A. S is not obliged to place a horseshoe on the horse although it was the custom in the
place because S and B did not stipulate about it.
B. S is obliged to place a horseshoe on the horse because the observance of custom or
usage in the place becomes part of the contract.
C. S is not obliged to take care of the horse before delivery because the caring of the
horse was not stipulated
D. S and B are bound only by the terms stated in their agreement.
110.In January 2008, S, 17 years old, sold his only car to B, 21 years old. The sale was without
the knowledge of G, the guardian of S. Assuming that an annulment case is filed today:
A. S may bring the action for annulment.
B. G may bring the action for annulment.
C. B may bring the action for annulment.
D. Annulment will not prosper whoever will file it.
111.Which among the following contracts is void?
A. A contract of barter between S, insane, and B, 17 years old.
B. A contract of sale where B, the buyer, twisted the arm of S, the seller, so that S would
sign the deed of sale.
C. A contract of sale where B, the buyer, aimed a gun at the wife of S, so that S would
sign the deed of sale.
D. A contract for the sale of a cow which is suffering from a contagious disease.
112.Which of the following contracts is valid and enforceable?
A. An oral promise to answer for the default of another.
B. A donation and its acceptance in a private instrument of a parcel of land.
C. An oral lease of a mining equipment for more than two years.
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D. An oral contract of sale of a ring worth P450.00 between an insane and a minor.
113.S and B entered into a contract where they made it appear that S sold to B a parcel of
land worth P50,000.00. In reality, however, S borrowed from B P50,000.00 with S
mortgaging the parcel of land as security for the debt.
A. S and B are bound by the contract of loan and mortgage.
B. S and B are bound by the contract of sale.
C. S and B are not bound at all.
D. S and B are bound by the contract of loan and mortgage if third persons are affected.
114.S, a store owner owner, hired the services of E as a clerk in the store at the minimum
wage. E began to work immediately although no employment papers were signed by S
and E. Afer 1 year and 2 months without E receiving any compensation except free meals
and lodging, E demanded payment from S. S refused to pay E on the ground that their
contract was unenforceable not being in writing and that the employment already lasted
more than a year.
A. The contract is unenforceable because it is not in writing and it has already been one
year from the time it was entered into.
B. The contract is valid and enforceable although not in writing.
C. The contract is void because an employment contract must be in writing to be valid.
D. The contract is rescissible because E suffered damages by reason of non-payment of
his compensation.
115.S sold a parcel of land to B for P100,000.00 with B paying the said amount immediately.
Although S delivered the transfer certificate of title of the land to B, the parties did not
execute any document at all for the sale except the receipt for the payment which S
issued to B. B now wants to register the sale with the Register of Deeds.
A. B can compel S to execute a Deed of Sale which is duly notarized so that B can
register the sale.
B. B cannot compel S to execute a Deed of Sale because the contract is unenforceable.
C. The contract between S and B is void because it was not in the form required by law.
D. The contract between S and B is rescissible; hence B can sue for damages.
116.S and B entered into a contract whereby S sold his car to B for P100,000.00. Based on the
foregoing, which of the following statements is incorrect?
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A. The contract is voidable if S is 17 years old, and B is 25 years old.
B. The contract is unenforceable if S is 17 and B is insane.
C. The contract is void if B, 25 years old, compelled S, 30 years old, to sign the deed of
sale by threatening to burn the house of S.
D. The contract is rescissible if at the time of the sale, the car was the subject of
litigation brought by X against S to recover the car, and the court and X did not give
their authority to the sale.
117.Which of the following contracts is valid and enforceable?
A. A contract where a party gave his consent in a moment of drunkenness.
B. A contract where a party gave his consent because the other party threatened to sue
him for an unpaid debt.
C. A contract where a party gave his consent because the other party threatened to kill
the first party the first party's spouse.
D. A contract where there was inadequate cause attended by mistake.
118.A entered into a contract with B whereby B agreed not to testify in a criminal case filed
against A in exchange for P5,000.00 to be given by A. The contract between A and B is:
A. void for being contrary to law.
B. void for being contrary to good customs
C. void for being contrary to public policy.
D. valid because there is nothing wrong when one does not want to testify against
another in a crime.
119.Which of the following must be in writing to be enforceable as required by the Statute of
Frauds?
A. A subscription for 100 shares of stock of a corporation at P100.00 per share.
B. A contract for the construction of a building scheduled to begin 3 months afer the
execution of the contract.
C. A contract for the lease of an agricultural lot for a period of 8 months.
D. A contract whereby one agrees to pay another's debt if the latter defaults in his
payment.
120.Which of the following contracts is valid and enforceable?
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A. A written contract for the purchase of a new-born baby who is the illegitimate child
of the buyer.
B. A written contract of employment where the employee agreed voluntarily not to
demand overtime payment for work rendered in excess of the regular-hours of work
per day.
C. An oral contract for the sale of a piece of land for P50,000.00 with the buyer giving a
down payment of P20,000.00.
D. An oral contract where the fruits of an immovable belonging to the debtor are to be
applied to the interest and principal of his obligation.
121.S, 17 ½ years old, sold his bicycle to B, 24, for P12,000.00. The price is payable in 12
monthly installments. Afer reaching 18, S continued to collect remaining six installments
until the price was paid in full.
A. S may still annul his contract with B.
B. S may no longer annul his contract with B.
C. Only B may annul the contract with S on ground of incapacity of S.
D. S and B may annul the contract at the same time based on the incapacity of S.
122.Under a contract between D and C, D is obliged to deliver 10 bags of detergent soap to C
10 days afer the execution of their agreement. On due date, D delivered to C 10 bags of
detergent soap which he mixed with chalk.
A. The contract entered into between D and C is voidable because of the fraud
employed by D.
B. The contract is valid. The fraud employed by D does not affect the validity of the
contract but D is obliged to pay damages to C.
C. The contract is void because of the fraud employed by D in the performance of his
obligation.
D. The contract is rescissible because of the damages suffered by C.
123.On January 1, 2010, Berroya bought a parcel of land from Salustiano who was insane. The
deed of sale was duly acknowledged before a notary public. Six months afer the sale,
Berroya realized that he needed a larger area on which to construct a commercial
building. At about the same time, Salustiano who had been undergoing psychiatric
treatment was declared of sound mind by his psychiatrist. Should a court action be filed
today:
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A. Berroya may successfully prosecute a court action to annul the contract on the
ground of Salustiano's insanity.
B. Salustiano may successfully prosecute a court action to annul the contract on the
ground of his insanity.
C. Neither Berroya nor Salustiano may successfully prosecute a court action to annul the
contract.
D. Berroya may successfully prosecute a court action to annul the contract on the
ground of mistake as to the area of the parcel of land.
124.Stanley, 17 years old, suffered a deep cut on his eyebrow during a basketball game. He
requested one of his teammates to call Dr. Ramos whose clinic was just a stone's throw
from the basketball court. Later. Dr. Ramos sent a bill to Stanley amounting to P500.00 for
the services he rendered. Stanley refused to pay bill, claiming that, as a minor, he was not
liable. The charge was a reasonable amount.
A. Stanley is not liable because he is a minor and thus incapable of giving consent to
engage the services of the doctor.
B. Stanley is liable although he is a minor because the contract involved a necessary.
C. Stanley is liable only when he reaches the age of majority
D. The teammate is the one liable because it was he who personally called the doctor.
125.The following contracts are presented to you:
I.
A contract of savings deposit between A and XYZ Bank. The contract was executed so
that A can present a certificate of bank deposit to the embassy of foreign country
since A is applying for a visa to the said country. A has really no deposit in the bank.
II.
A contract where S and B made it appear that S sold his car to B for P100,000.00, but
S actually borrowed P100,000.00 from B and mortgaged his car to secure the debt.
In your evaluation of the foregoing contracts:
A. Both contracts are absolutely simulated.
B. Both contracts are relatively simulated.
C. Contract I is absolutely simulated; Contract II is relatively simulated.
D. Contract I is relatively simulated; Contract II is absolutely simulated.
126.Which of the following contracts involving real property is valid and enforceable although
not in writing?
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A.
B.
C.
D.
Sale of a piece of land for P50,000.00.
Lease of an agricultural lot for a period of 2 years at a monthly rental of P3,000.00.
Mortgage of a commercial lot to secure a loan of P50,000.00.
Donation and acceptance of a residential lot.
127.Tadeo owned a vacant lot adjacent to a bigger lot where Star Circus planned to put up a
two-week performance provided in the lease contract which it executed with Legaspi, the
owner of the bigger lot. In expectation of using his property for a parking lot, Tadeo
leveled his lot and built a small shed which cost him P20,000.00, an amount he had yet to
pay the contractor. Later, however, Star Circus cancelled the performance, so Tadeo
brought a court action to recover P20,000.00 from it and Legaspi. Based on the foregoing
information, which of the following is incorrect?
A. The circus contract took effect only between Star Circus and Legaspi, the parties to
the contract of lease.
B. Tadeo can recover damages from Star Circus and Legaspi by reason of stipulation
pour autrui.
C. Tadeo must pay his own contractor the amount of P20,000.00 because that is the
obligation he alone contracted to pay.
D. Tadeo, as an incidental beneficiary, has no rights under the circus contract.
128.An insurance policy which, in practice, is prepared by an insurance company and all the
insured has to do is to sign thereon if he agrees with its terms, is an example of:
A. an auto-contract.
B. a contract of adhesion.
C. a commutative contract.
D. a gratuitous contract.
129.Don Henrico was an 85-year-old wheelchair-bound invalid who needed daily care. He
hired Normita, a live-in nurse to take care of him. Afer one year into this arrangement,
Normita began to pressure Don Henrico into signing a deed of donation giving Normita all
his property in exchange for her promise never to leave. Normita isolated Don Henrico
from all his relatives and friends and told him that everyone had abandoned him and that
only she cared about him. Convinced that he had been abandoned by his family and
friends, Don Henrico donated all his property to Normita. Both the donation and the
acceptance were made in a public document, what is the status of the donation?
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A.
B.
C.
D.
Valid since it was in a public document together with the acceptance.
Voidable by reason of the undue influence employed by Normita on Don Henrico.
Voidable by reason of the intimidation employed Normita on Don Henrico.
Voidable since the old age of Don Henri prohibited him from thinking intelligently.
130.D, the only daughter and heir of L, a lawyer, discovered shortly afer L's death that her
father's book, Legal Eagle a rare collection, was missing from L's library. Afer going
through L's records, D traced the book to S, a law student. When D informed S that she
wanted the book returned, S refused claiming that L donated the book to him. D,
however, protested saying that the book was merely lent to him by L.
A. D cannot ask for the return of the book although she is the only heir because L's right
over the book was not transmitted to her.
B. D can ask for the return of the book because it should be considered to have been
lent only by L to S, i.e., the contract should be one of commodatum only.
C. D cannot ask for the return of the book because the same should be considered as
having been donated by L to S.
D. The contract involving the book is void since the intent of L and S was ambiguous.
Accordingly, D can ask for the return of the book on the ground of the nullity of the
contract.
131.S sold one of his lots to B for P100,000.00. The lot, located beside a busy street, consisted
of 1,200 square meters and was covered by Transfer Certificate of Title (TCT) No. 12345.
Afer registering the sale with the Register of Deeds and the issuance to him by the said
office of a new transfer certificate of title in his name, B discovered that the deed of sale
and the new title described S's adjoining lot which, although also consisting of 1,200
square meters, was covered by TCT No. 12346 and located farther from the street. B
learned that C the secretary of S, typed the wrong description on the deed of sale. B now
approaches you for advice on which course of action to take. What advice will you give to
B?
A. Annulment of the contract because he did not consent to the purchase of the lot
covered by TCT No. 12346.
B. Rescission because the erroneous description has caused him damages.
C. Reformation because the deed of sale failed to show the true intention of the parties
to the contract.
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D. Declaration of nullity of the contract because it is void ab initio by reason of the
wrong object.
132.Which of the following contracts is rescissible?
A. A sale made by a guardian in behalf of his ward of the corn harvested from the ward's
corn field at a price of P50,000.00. The corn had a value of P60,000.00.
B. A sale of a piece of land made by D to defraud C, his creditor. The buyer of the piece
of land was aware of the fraudulent intention of D when D made the sale.
C. A donation made by D to X of his Guess wristwatch worth P3,000.00 during a party
where D was in a state of drunkenness. X wrote his acceptance of the donation on a
table napkin.
D. A barter of D's ring with C's necklace. D was publicly known to be insane but he was
in his lucid interval at the time of the exchange.
133.Which of the following statements is true as regards a void contract?
A. A void contract is ratified by the acceptance by a party to the contract of a benefit
under its terms.
B. The right to set up the defense of illegality of a void contract may be waived if the
illegality is not raised within a reasonable time.
C. If there is a novation of a void contract, such novation is valid provided the new
contract is valid.
D. The right to set up the defense of illegallity of a void contract does not prescribe.
134.W, a woman, agreed to live with M, a man, as M's wife without the benefit of marriage in
exchange for me promise to give a monthly support of P10,000.00. Both parties are
single. Afer 3 years, M found another woman and stopped giving support to W.
A. W can demand the continuation of the monthly support from M pursuant to their
agreement.
B. M can demand the return of the support that he had given to W for the past 3 years.
C. Both M and W will be criminally prosecuted.
D. The agreement between M and W is illegal but the illegality does not constitute a
crime.
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135.It is a contract by virtue of the terms of which the parties thereto promise and obligate
themselves to enter into another contract at a future time, upon the happening of certain
events, or the fulfillment of certain conditions.
A. Contract of adhesion
B. Contract of option
C. Contract of sale
D. Auto-contract
136.O was cleaning the glass window of his building when a large piece of broken glass fell
down directly hitting the roof of a car which was parked below. C, the owner of the car,
was not around. Sensing that he would be made liable for the damage on the car, O
immediately went down and cleaned the mess. O, seeing that W had witnessed all that
happened, proposed to give W P2,000.00 so that W would not testify in case a court case
is filed. W agreed to the proposal and accepted the money. Based on the foregoing facts,
which of the following statements is incorrect?
A. O's liability, if any, is based on quasi-delict.
B. The agreement between O and W is binding on both of them.
C. W may testify in court despite the agreement.
D. The agreement between O and W is void for being contrary to public policy.
137.Salendrez agreed to sell his car to Martinez who just turned 17 years old, for P100,000.00.
Martinez gave a down payment of P10,000.00 of the price. Shortly before scheduled
delivery of the car, Salendrez received a higher offer from Tablizo. He thus attempted to
annul the sale on the ground that Martinez was a minor.
A. Salendrez may annul the contract because the minority of Martinez rendered the
contract voidable.
B. Only Martinez may annul the contract on the ground of his incapacity.
C. Martinez may no longer annul the contract because he is deemed to have ratified it
when he gave a down payment at the time of the execution of the contract of sale.
D. Neither Salendrez nor Martinez may annul the contract because the contract is partly
executed.
138.Torrente, a supplier of typewriters, sent to several customers in various parts of the
country a letter offering to sell out “all his stock of 10 units of Olympia typewriter” at the
discounted price of P3,000.00 each. The offer stated that the reply must be received by
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registered mail not later than September 18. On September 14, Belleza sent a registered
letter accepting the offer. The letter was received by Torrente on September 19. On
September 16, Corpuz sent a telegram accepting the offer. The telegram was received by
Torrente on the same day. Whose acceptance is binding on Torrente?
A. The acceptance by Belleza because it was mailed first.
B. The acceptance by Corpuz because it was received first by Torrente.
C. Neither acceptance is binding on Torrente.
D. Both the acceptance will be binding on Torrente, with Belleza getting 5 typewriters,
and Corpuz getting the other 5.
139.S and B signed a deed (a written contract) of sale of motor vehicle whereby S sold his car
to B for P200,000.00. The parties agreed that S would deliver the car, and B would pay the
price, afer two weeks. Before the two week period was over, S found another buyer who
was willing to pay P220,000.00 for the car. May S validly withdraw from his contract with
B?
A. Yes, because B has not yet paid the price.
B. Yes, because the other buyer was willing to pay more.
C. No, because S was already bound by his contract with B and he cannot unilaterally
withdraw from it.
D. Yes, because S has not yet delivered the car.
140.D obtained a loan from C amounting to P200,000.00. To secure the loan, D mortgaged his
lot. C registered the mortgage with the Register of Deeds. Later, D sold the lot to X who
was not aware that the lot was mortgaged. On the due date of the loan, C demanded
payment but D could not pay. Accordingly, C decided to foreclose the mortgage on the lot.
X, however, opposed the foreclosure claiming that he was not bound by the mortgage
since he was not a party thereto.
A. X was bound by the mortgage although he was not aware of it because the same is
registered.
B. X was not bound by the mortgage because he was not a party thereto.
C. Only D and C were bound by the mortgage contract because they were the only
parties thereto.
D. X was not bound by the mortgage because he was not aware of it.
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141.On June 1, S offered to sell a specific generator set to B for P300,000.00. B sent his letter
of acceptance to S on June 8. On June 10, however, B became insane. On June 12, S
received B's letter of acceptance.
A. The contract was perfected on June 8 when B sent his letter of acceptance, at which
time he was still sane.
B. The contract was perfected on June 12 when S learned of the acceptance.
C. The contract was not perfected because insanity of B occurred before S came to learn
of the acceptance of his offer by B.
D. The contract was perfected on June 1 because the acceptance made by B on June 8
retroacts to the date of the offer.
142.P gave a special power of attorney to A to sell P's house and lot for P2,000,000.00. On
May 7, A, pursuant to the authority granted to him by P, offered to sell the house and lot
to B at the price of P2,000,000.00. B accepted the offer on May 8 by sending a letter of
acceptance to A on such date, which letter of acceptance was received by A on May 10.
On May 11, P revoked A's authority before the latter could inform him of B's acceptance.
A. The contract was perfected on May 8 when B sent his letter of acceptance.
B. The contract was perfected on May 10 when A received the letter of acceptance.
C. The contract was not perfected because P, the true owner of the car that was sold,
revoked A's authority before he came to learn of B's acceptance.
D. The contract was perfected on May 7 since the acceptance by B retroacts to the date
of the offer.
143.On May 1, Sonora offered to sell his car for P500,000.00 to Balmores who was interested
in buying the same. In his letter to Balmores, Sonora stated that he was giving Balmores
up to May 31 to decide whether to buy the car or not. On May 10, Balmores sent to
Sonora through his messenger a letter stating that he was accepting the promise of
Sonora. Enclosed in the envelop was the amount of P2,000.00 as option money. On May
25, Sonora personally went to Balmores to inform him that he was no longer willing to sell
the car unless the price was increased to P600,000.00 because another buyer was
interested in buying the car for the said amount.
A. Balmores may compel Sonora to sell to him the car for P500,000.00 because they
have an option contract which was founded upon a valuable consideration.
B. Sonora may validly withdraw his offer to Balmores and all that Sonora needs to do is
to inform Balmores of such withdrawal.
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C.
Sonora may withdraw his offer even before lapse of the option period that he gave to
Balmores because that is his right as owner and seller of the car.
D. Sonora is free to sell the car to another only even before the lapse of the option
period that he gave to Balmores because he stands to gain P100,000.00 from the
transaction.
144.D donated his lot to C because he thought that C was his illegitimate son. The deed of
donation was signed by and C, and acknowledged by them before a notary public before a
new certificate of title to the lot was issued by the Register of Deeds. Later, D learned that
C was not his son, but that of another man.
A. D can have the donation annulled on the ground of mistake of identity.
B. D can no longer annul the donation because a new certificate of title has already
been issued.
C. D cannot annul the donation because he freely entered into it.
D. D cannot annul the donation because disregarding it would be unfair to C.
145.A has been for more than 20 years the legal counsel of C. A talked to C almost everyday in
the course of giving counsel to C to convince C to donate his lot to him. A told C that it
was only he who knew all of C's cases and was the only one who could handle them and
C's other legal concerns. Because of the persistence of A in talking him into donating his
lot, C finally signed the deed of donation of the lot in A's favor with all the formalities
required by law.
A. The deed of donation is valid because all the formalities required were complied
with.
B. The deed of donation is voidable on the ground of undue influence.
C. The deed of donation is voidable on the ground of intimidation.
D. The deed of donation is valid because it was the only way by which C could keep A as
his lawyer.
146.The following are the essential elements of a consensual contract, except:
A. Consent of the contracting parties.
B. Object certain which is the subject matter of the contract.
C. Delivery of the object of the contract.
D. Cause of the contract which must be established.
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147.An insurance contract is:
A. an aleatory contract.
B. a contract of adhesion.
C. both (a) and (b).
D. neither (a) nor (b).
148.D borrowed P100,000.00 from C. On due date, C demanded payment but D refused to
pay. In view thereof, C threatened to sue D. Afraid that he would be sued, D executed a
contract transferring his lot to C by way of dacion en pago. What is the status of the
dacion en pago?
A. Void because D did not give his consent freely.
B. Voidable because D gave his consent by reason of the intimidation employed by C.
C. Valid because there was no intimidation when a party seeks the aid of the courts to
enforce his right.
D. Rescissible because D suffered damages.
149.On March 1, S sent a letter offering the sale of his car for P200,000.00 cash to B. In his
letter, S stated that B's acceptance should be sent by registered mail and must be received
by S not later than March 31. On March 20. B accepted the offer of S by sending an e-mail
message on the same day to S whose e-mail address was indicated in the letter. S read the
message the following day, March 21. Was there a perfected contract between S and B?
A. Yes, on March 1.
B. Yes, on March 20.
C. Yes, on March 21.
D. No, no contract was perfected at all.
150.These statements are presented to you:
I.
Option money is part of the purchase price.
II.
Earnest money is proof of the perfection contract of sale.
In your evaluation of the foregoing statements:
A. Both statements are true.
B. Both statements are false.
C. Only Statement I is true.
D. Only Statement II is true.
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151.D gave his US$100.00 bill to C to have it converted in pesos at the agreed rate of P55.00 to
US$1.00. When received his money in pesos, he discovered that C gave him P5,700.00
instead of P5,500.00. No written agreement was executed by the parties. The only written
evidence of the transaction was the tape dispensed by the adding machine showing the
computation to be P5,500.00 and which was in the possession of D.
A. The contract is voidable. C can have it annulled on the ground of mistake.
B. The contract is valid. D must return the excess of P200.00 to C.
C. The contract is unenforceable since it was not in writing.
D. C can demand that a writing be executed to show the true intention of the parties.
152.P, the owner of a business, appointed A as his agent to manage it. P authorized A to
borrow money for the business. A himself is the one who lends the money at the current
rate of interest. Thus, in the said contract of loan, A enters into the contract in his own
behalf as lender and represents P as borrower. The contract of loan in such a case is
considered as:
A. an auto-contract.
B. an aleatory contract.
C. a remuneratory contract.
D. a gratuitous contract.
153.D dined at C's restaurant where he was served amounting to P475.00. When he was
about to pay, he discovered that his wallet was missing. Not having a money to pay, he
called T, his friend, who knew C, and explained his predicament. T, through his cell phone,
then called C and told the latter to let D leave without incident, and that he would be the
one to pay D's bill if D does not or cannot pay.
A. The promise of T can be enforced against him by because the food sale was
evidenced by the bill issued by C to D.
B. The promise of T can be enforced against him by C because the food sale was less
than P500.00.
C. The promise of T cannot be enforced against him by C because it was not in the form
required by law to be enforceable.
D. The promise of T can be enforced against him by C because D already benefited from
the contract of sale.
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154.S sold his lot consisting of 1,000 square meters to B. However, the deed of sale signed by
the parties showed a total area of 1,200 square meters due the secretary's mistake. Later,
S discovered the mistake. What remedy is available to either party?
A. Annulment
B. Reformation
C. Rescission
D. Declaration of nullity of the contract.
155.On August 1, 2015, Samonte sent a letter to Benavidez. In the letter, Samonte offered to
sell his house and lot located at Green Valley Subdivision for P1,200,000.00 cash and
stated that the acceptance had to be received by Samonte not later than August 15, 2015.
Benavidez sent his acceptance on August 10, 2015, but due to delay in the mails, Samonte
received the letter of acceptance on August 18, 2015.
A. The contract between Samonte and Benavidez was perfected on August 10, 2015.
B. The contract between Samonte and Benavidez was perfected on August 15, 2015.
C. The contract between Samonte and Benavidez was perfected on August 18, 2015.
D. No contract was perfected between Samonte and Benavidez.
156.Sermonia Agri-Products, a supplier of “ZZ” fertilizer, offered in writing to sell to Barbados
Farms, 50 bags of fertilizer at the price of P100.00 per bag. The offer stated that the price
would be good for one week during which Barbados Farms may decide to accept the
offer. There days later and before Barbados could make any acceptance, the general
market price went up. Sermonio attempted to revoke the offer by informing Barbados,
but Barbados claimed Sermonia could not do so.
A. Sermonia may withdraw the offer by just informing Barbados since there has not yet
been any acceptance thereof.
B. Sermonia may not withdraw the offer since the one-week period within which
Barbados may decide had not yet lapsed.
C. Sermonia may withdraw the offer only afer the expiration of the one-week period,
unless Barbados in the meantime has accepted the offer.
D. Sermonia may withdraw the offer because it would suffer a loss if the sale was
allowed to push through.
157.D obtained a loan of P1,000,000.00 from C. To secure the debt, D executed deed of
mortgage covering two of his lots, Lot A and Lot B, each of which is in the name of D in
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the certificate of title. The mortgage of Lot A was recorded within one week in the Office
of the Register of Deeds, but that of Lot B could not be processed as other documents
were being required by the Register of Deeds. In the meantime, D sold Lot A to X, and Lot
B to Y. X knew nothing on the mortgage of Lot A, but Y was aware of the mortgage of Lot
B.
A. Both X and Y are bound by the mortgage on the lot sold to each of them.
B. Both X and Y will not be bound. In the case of X, he knew nothing of the mortgage. In
the case of Y, the mortgage was not registered.
C. X is bound by the mortgage of Lot A. Y is not bound by the mortgage of Lot B.
D. X is not bound by the mortgage of Lot A. Y is bound by the mortgage of Lot B.
158.B obtained delivery from S of a Nikkon camera and an unlicensed revolver which he
purchased from the latter at the price of P1,500.00 and P5,000.00, respectively. No
written agreement was signed by the parties to keep the contract a secret.
A. The sale of the camera is unenforceable because it was not in writing, while that of
the revolver is void because the object is illegal.
B. The sale of the camera is valid and enforceable, while that of the revolver is void.
C. The sale of both the camera and the revolver is valid because the parties are bound
by their secret agreement.
D. The sale of both the camera and the revolver is void because the contract is
indivisible.
159.Which of the following contracts is valid and enforceable?
A. A contract of sale between S and B, both of legal age, of a computer worth
P20,000.00. No document was signed by the S, the seller, and B, the buyer who has
given a down payment of P4,000.00. S is set to deliver the computer upon full
payment of the price.
B. A contract of lease between S, 16, and B, 25. The lease which was in writing and
signed by both parties, had for its object a drilling equipment, and had a duration of 3
years. The drilling equipment is now in the possession of B who has paid the rental of
P1,000.00 for the first month to S.
C. A contract of donation of a lot between S, 30, and B, 24. The donation and the
acceptance are in a private document. B has since occupied the lot.
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D. A 6-month contract for the supply of carabao meat by S to B. Although the slaughter
of carabao is prohibited by law, the contract is now on its third month and S has
made carabao meat deliveries worth P30,000.00.
160.P, the owner of a certain business, instructed A, his agent and manager of the business to
buy goods on credit from S. S issued a sales invoice where A acknowledged the receipt of
the goods by signing thereon. P called S by phone and promised to S that he (P) would
pay for the goods on due date. S was not paid on due date. Accordingly, he sued P for the
price of the goods. P raised the defense of unenforceability under the Statue of Frauds
claiming that a representation as to credit must be in writing.
A. The promise is enforceable against P although it was not in writing.
B. The promise is unenforceable against P because it was not in writing.
C. The promise is enforceable against A because it was he who signed the invoice.
D. The promise may be enforced both against P and A since they are the debtors in the
transaction.
161.The following contracts, all of which are executory and not in writing, are presented to
you for evaluation:
I.
Sale of a piece of land for P50,000.00.
II.
Sale of a computer for P20,000.00.
III.
Lease of a delivery truck at P1,000.00 per month for 2 years.
In your evaluation of the foregoing contracts:
A. I and II are unenforceable.
B. II and III are unenforceable.
C. I and III are unenforceable.
D. All contracts are unenforceable.
162.The following are characteristics of certain contracts:
I.
Nominate
II.
Real
III.
Aleatory
IV.
Commutative
A contract for the sale of a sweepstake ticket is considered as:
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A.
B.
C.
D.
I and II
I and IV
I and III.
III and IV.
163.Which of the following does not apply to a relatively simulated contract?
A. The parties are bound by their real agreement.
B. The parties are not bound at all.
C. The parties are bound by their ostensible agreement if the real agreement prejudices
third persons.
D. The parties are bound by their ostensible agreement if the real agreement is contrary
to law, morals, good customs, public order and public policy.
164.The following contracts are presented to you:
I.
A contract where one of the parties gave his consent in a state of drunkenness.
II.
A contract where one of the parties gave his consent during a hypnotic spell.
III.
A contract where both parties employed fraud to obtain the consent of the other
party.
IV.
A contract where one of the parties gave his consent because the other party
threatened to sue him.
In your evaluation of the foregoing contracts, which of the said contracts are not
voidable?
A. I and II.
B. I and III.
C. II and III.
D. III and IV.
165.S placed an advertisement in the Manila Bulletin as follows: "INVITATION TO BID: For sale,
house and lot located at No. 120 Roxas Boulevard, Manila.” Three persons submitted their
bids as follows: A, P2 million; B, P2.5 million; and C, P3 million. Afer studying the bids. S
awarded the contract to B. C complained claiming that the contract should have been
awarded to him since he was the highest bidder.
A. The award of the contract to B is not valid because he was only the second highest
bidder.
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B.
The contract should have been awarded to C because S, as the advertiser, was bound
to accept the highest bidder.
C. S was not bound to accept the highest bidder because advertisements for bidders are
mere invitations to make proposals, unless the contrary appears.
D. The contract should have been awarded to C because his bid was the most
advantageous to S
166.When a physician who takes improper advantage of his power over the will of his patient
in order to get the latter’s consent to a contract between the two of them, the contract
will:
A. likely be voidable because of intimidation.
B. still be valid because the patient is merely returning the favor to his physician who
takes care of his health.
C. likely be voidable because of undue influence.
D. be void because of unlawful service.
167.These statements are presented to you for evaluation:
I.
Payment of option money by the buyer reduces the purchase price that he will pay to
the seller in case he accepts the offer.
II.
Payment of earnest money will make an oral sale of an immovable enforceable.
In your evaluation of the said statements:
A. Both are true.
B. I is true; II is false.
C. Both are false.
D. I is false; II is true.
168.Casimiro filed against Delgado a complaint which sought to collect Delgado's debt of
P200,000.00 and attached Delgado's lot located at No. 120 Lepanto Street, Sampaloc,
Manila. The court accordingly issued the writ attachment on the property against
Delgado. While the case was pending, Delgado sold his lot located at No. 95 Scout Albano
Street, Quezon City. Torres, another creditor of Delgado now questions the sale as
fraudulent and seeks to rescind it.
A. Torres may not question the sale because I was not he but Casimiro who obtained
the writ of attachment against Delgado.
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B.
Casimiro may not question the sale because it referred to a lot which was not the
object of attachment.
C. Either Torres or Casimiro may question the sale.
D. Neither Casimiro nor Torres may question the sale.
169.The following contracts are presented evaluation:
I.
Pledge.
II.
Commodatum
III.
Sale
IV.
Donation of an immovable.
The real contracts among the four contracts enumerated are:
A. I and II.
B. II and III.
C. I and III
D. II and IV.
170.The following cases are presented to you:
I.
S informed B that the house S was selling was never infested by termites. The truth,
however, was that S had the house treated for termites 3 months before. B bought
the house believing in the words of B.
II.
S sold to B 10 bags of cement which were scheduled for delivery one week from their
agreement. On delivery, S delivered to B 10 bags that contained a mixture of cement
and pulverized rock.
In your evaluation of the above cases, the fraud employed by S rendered voidable:
A. the contract of sale in Case I only.
B. the contract of sale in both cases.
C. the contract of sale in Case II only.
D. neither of the two contracts.
171.The following statements are presented to you:
I.
The illegality of the motive of a party to a contract renders the contract void.
II.
The motive of one party to a contract is always known by the other party.
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In your evaluation of the foregoing statements:
A. Both are true.
B. Both are false.
C. Only I is true.
D. Only II is true.
172.On March 25, 2014, Orlando and Timoteo entered into a written contract of lease
whereby Orlando as lessor leased the third floor of his building to Timoteo, lessee. The
contract provides, among other terms and conditions, the following: (a) The lessee shall
give a rental deposit of two months amounting to P40,000.00; and pay an advance rental
of one (1) month amounting to P20,000.00 upon the execution of the contract; (b) The
lessor shall keep the leased premises in tenantable condition throughout the period of
the lease which is from April 1, 2014 to March, 31, 2016; (c) At the end of the lease
period, the lessor shall return the rental deposit to the lessee less any amount of damage
that may be caused on the leased premises by the lessee.
Timoteo, pursuant to the contract, gave both the rental deposit and advance rental to
Orlando upon the execution of the contract.
The contract between Orlando and Timoteo is:
A. bilateral, nominate, onerous and commutative.
B. bilateral, innominate, onerous, and aleatory.
C. unilateral, nominate, gratuitous, and commutative.
D. unilateral, innominate, onerous and commutative.
173.Assume the same facts in No. 172 except that the contract was entered into orally
between Orlando and Timoteo. In such a case, the contract between the parties is:
A. unenforceable.
B. voidable.
C. rescissible.
D. valid and enforceable.
174.The efficient cause in the obligations in No. 172 is the:
A. lease period of two (2) years.
B. contract of lease between Orlando and Timoteo.
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C.
obligation of Timoteo to give the rental deposit and the one (1) month advance
rental.
D. obligation of Orlando to keep the leased premises in tenantable condition
throughout the period of the lease, and to return the rental deposit upon the
expiration of the lease.
175.D borrowed P50,000.00 from C. The debt, which is payable within one year, is secured by
a mortgage that D constituted on his lot. The mortgage is recorded in the Registry of
Property. C dies before the due date of the debt and was not able to collect any amount
of his loan receivable from D. He was survived by S, his only son and heir. D, taking
advantage of the situation, sold the lot to T who was not aware of the mortgage
constituted thereon.
A. The mortgage is not binding on T since he was not aware of it at the time he bought
the lot.
B. S, the son of C, has the right to collect the amount of the note from D, and foreclose
the mortgage if D cannot pay.
C. The mortgage is not binding on T since D was in bad faith when he sold the lot to T.
D. The right to collect the loan was extinguished upon the death of C.
176.B entered into a contract for the purchase of 5 rolls of cloth worth P20,000.00 from S. The
materials which were to be used by B in the making of school uniforms, were scheduled
for delivery within 7 days. On the seventh day, S failed to deliver the cloth despite
demands from B. As a result, B could not meet his commitment to his customers and was
threatened with a court suit. S claimed that M from whom he ordered the cloth under a
contract that he (S) and M entered into, did not finish manufacturing the product as
scheduled in accordance with the terms of such contract. In this case, B may not sue M
for damages under the contract between S and M under which principle of contract?
A. Principle of Liberality of Contract.
B. Principle of Relativity of Contract.
C. Principle of Consensuality of Contract.
D. Principle of Obligatory Force of Contract.
177.The following contracts are presented to you:
I.
A contract of sale involving 100 sacks of rice entered into by G, a guardian, in behalf
of M, his ward. The rice was worth P100,000.00 but was sold by G for P85,000.00.
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II.
III.
A contract of sale made by D of his only lot to X in order to defraud C, his creditor. X
was not aware of the fraudulent intention of D when he sold the lot to him.
A contract of sale made by D to X of jewelry which C is trying to recover in a court
case he filed against D. X was not aware that the jewelry was the subject of litigation
between C and D.
In your evaluation of the foregoing contracts:
A. Contracts I and II are rescissible.
B. Contracts I and III are rescissible.
C. Contracts II and III are rescissible.
D. None of the above contracts is rescissible.
178.Which of the following contracts is not a void contract?
A. A contract of sale of an animal suffering from a contagious disease.
B. A purchase of an illegitimate child by one who is the father of the child.
C. A contract of insurance whereby the insured asked another to take his place during
the medical examination.
D. A contract between F, a Filipino and A, an alien, for the purchase of the right kidney
of F for P200,000.00
179.An aleatory contract is one:
A. the fulfillment of which depends upon chance.
B. the parties of which are obliged to perform reciprocal prestations.
C. where only one party actually and physically enters into the contract.
D. where delivery of the object is required to be made for its perfection.
180.Zenith Cars Corporation (Zenith) engaged the services of Stronghold Construction
Corporation (Stronghold) for the construction of its showroom. For this purpose,
Stronghold bought construction materials on a 60-day credit from Durable Materials
Corporation (Durable). On due date, Durable demanded payment from Stronghold but
the latter contended that it could not make any payment because it has not yet collected
from Zenith. In this case:
A. Durable can hold liable Stronghold only.
B. Durable can hold liable Zenith only.
C. Durable can hold liable both Stronghold and Zenith.
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D. Durable cannot hold liable neither Stronghold nor Zenith.
For Items 181 to 199, state the status of the contract from among the following choices:
A. Valid and enforceable.
B. Rescissible.
C. Voidable.
D. Unenforceable.
E. Void.
181.An oral contract of sale of a computer worth P20,000.00 between S (seller), a minor, and
B (buyer), an insane person. The computer has been delivered and the price has been
paid.
182.A written contract of sale of a computer worth P20,000.00 between S (seller), a minor,
and B (buyer), an insane person. The computer has not been delivered and the price has
not been paid.
183.An oral sale of a lot worth P50,000.00 between S (seller) and B (buyer). S has not
delivered the lot, but B has given a down payment of P5,000.00.
184.A deed of sale of a lot worth P100,000.00 between S (seller) and B (buyer). S has not
delivered the lot, and B has not given any payment. The sale is in writing but has not yet
been acknowledged by the parties before a notary public.
185.A written contract of sale of a specific car between S and B. The car actually belonged to
O and was sold by S in the name of O without the latter's authority. The car is still in the
possession of O although B has remitted the price of P60,000.00 to S.
186.A certificate of bank deposit entered into between D, depositor, and B, bank. D has really
no deposit in the bank but the bank made it appear that D had a deposit so that D could
use the certificate of bank deposit to apply for a visa at a foreign embassy.
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187.A written contract of sale entered into by G, guardian, in behalf of his ward M, a minor,
and B, 25 years old. The sale had for its object a specific ring with a value of P40,000.00
belonging to M but was sold by G for only P28,000.00. B has paid the price in full and
obtained possession of the ring.
188.A written contract of sale entered into by G, guardian, in behalf of his ward M, a minor,
and B, 25 years old. The sale had for its object a specific ring with a value of P40,000.00
belonging to M but was sold by G for only P30,000.00. B has paid the price in full and
obtained possession of the ring.
189.A written contract of sale of a lot between S, seller, and B, buyer, for P50,000.00. The lot is
the only property of S who sold it to defraud C, his creditor. B was aware of the fraudulent
intent of S in selling the lot to him.
190.A written contract of sale of a lot between S, seller, and B, buyer, for P50,000.00. The lot is
the only property of S who sold it to defraud C. his creditor. B was not aware of the
fraudulent intent of S in selling the lot to him.
191.A donation of a gold ring worth P4,000.00 made by D to C. The donation of the gold ring
by D and its acceptance by were made orally with D simultaneously delivering the ring to
C.
192.A written contract of sale entered into between S (seller) and B (buyer). The object of the
sale is the right lung of S. B has paid the price amounting to P200,000.00.
193.An oral contract of commodatum whereby M, 17 years old, lent his cell phone to B, 25
years old for a week.
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194.An oral contract of lease of a lot by R (lessor) and E (lessee) for a period of 2 years at a
monthly rental of P20,000.00 with E being required to pay a one-month deposit of
P20,000.00. R has not delivered the lot. Neither has E given the one-month deposit.
195.An oral contract of lease of a delivery truck by R (lessor) and E (lessee) for a period of 2
years at a monthly rental of P20,000.00 with E being required to pay a two-month deposit
of P40,000.00. R has not delivered the truck. Neither has E given the two-month deposit.
196.A written contract of lease of a lot by R (lessor) and E (lessee) for a period of 2 years at a
monthly rental of P20,000.00 with E being required to pay a one-month deposit of
P20,000.00. R has not delivered the lot. Neither has E given the one-month deposit. The
contract has not been acknowledged by the parties before a notary public.
197.An oral contract of lease of a lot by R (lessor) and E (lessee) for a period of 2 years at a
monthly rental of P20,000.00 with E being required to pay a one-month deposit of
P20,000.00. E has not given the one-month deposit, but has started occupying the lot.
198.An oral contract of lease of a lot by R (lessor) and E (lessee) for a period of 2 years at a
monthly rental of P20,000.00 with E being required to pay a one-month deposit of
P20,000.00. R has not delivered the lot, but E has given the one-month deposit.
199.An oral contract of lease of a room between R (lessor), who is 40 years old, and S (lessee),
a 17-year old student for a period of one-year while S is studying at ABC School. The
monthly rental is P5,000.00. S has paid the first month rental in advance.
200.Erwin applied for an insurance with ABC Insurance Company. The application required
Erwin to undertake a physical examination. However, since Erwin was suffering from
asthma, he requested Edwin, his identical twin brother who was very healthy, to go
through the physical examination and pretend that he was Erwin. ABC Insurance thus
approved the insurance policy believing that Erwin had a clean bill of health.
A. The fraud employed was dolo causante.
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B. The fraud employed was dolo incidente.
C. The fraud committed is fraud in performance
D. There was no fraud or misrepresentation at all because Edwin is considered as an
agent of Erwin.
201.The insurance policy (contract) in No. 200 is:
A. Valid.
B. Voidable.
C. Rescissible.
D. Void.
202.P met an accident and died while on board a taxi owned by Roadmasters Taxicab
Company. Roadmasters has a common carrier insurance policy with ABC Insurance
Company for the payment of indemnity to any fare-paying passenger in case of accident.
Which of the following statements is incorrect?
A. The heirs of P can claim the indemnity from ABC Insurance for the death of P.
B. The heirs cannot claim any indemnity because P was not a party to the contract of
insurance between Roadmasters and ABC Insurance.
C. The provision in the insurance policy for the payment of indemnity is an example of
stipulation pour autrui.
D. The right of P to claim for indemnity was transmitted to his heirs upon his death.
203.S shipped his goods in the vessel of V. The goods were destined for Cebu. When the vessel
reached Cebu, V hired T who owned a special equipment for the unloading of the cargoes
that included the goods of S. The goods of S, however, fell into the sea while being
unloaded because of the negligence of the operator of the equipment.
A. S can go afer T.
B. S can only go afer V.
C. S can go afer both T and V.
D. S cannot go afer either T or V.
204.A contract of pledge is perfected upon the:
A. meeting of minds of the parties.
B. delivery of the object of the contract.
C. Execution of the written agreement by the parties.
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D. acknowledgment by the parties of the instrument evidencing the contract before a
notary public.
205.S, a store owner, sold a gallon of rat poison to B for P1,000.00. B intended to pour the
poison in the fishpond of X, his enemy, to kill all the fish therein. The sale of the rat poison
is:
A. valid provided B does not pursue his motive to kill the fish in the fishpond of X.
B. valid even if B pursues his motive to kill the fish in the fishpond of X.
C. void as it is immaterial whether or not B kills the fish in the fishpond of X since B's
motive is void.
D. void if B pursues his motive to kill the fish in the fishpond of X.
206.The following contracts are voidable, except a contract:
A. between a minor and an insane.
B. where consent was given by a party while in a state of drunkenness.
C. where consent was given by a party while under hypnotic spell.
D. where a party was mistaken as to the substance of the thing object of the contract.
207.It refers to a contract wherein one party imposes a ready-made form of contract, which
the other may accept or reject, but which the latter cannot modify.
A. Aleatory contract.
B. Contract of adhesion.
C. Auto-contract.
D. Innominate contract.
208.A provision in a promissory note authorizing the creditor to increase, decrease or
otherwise change from time to time the rate of interest and/or bank charges without
advance notice to the borrower is violative of which principle of contract?
A. Relativity
B. Mutuality
C. Obligatory force
D. Consensuality.
209.These statements are presented to you:
I.
There may be more than two parties to a contract.
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II.
A party to a contract may be composed of more than one person.
In your evaluation of the foregoing statements:
A. Statement I is true; Statement II is false.
B. Statement I is false; Statement II is true.
C. Both statements are true.
D. Both statements are false.
210.At the height of the flood, D saw C and his family bringing their personal effects to a
higher ground. He offered his help which was accepted. Thereafer, C gave P500,00 to D
who was not expecting the payment. The contract between D and C is:
A. onerous.
B. remuneratory.
C. gratuitous.
D. There was no contract at all.
211.Refer to No. 210. The cause is:
A. the payment of P500,00.
B. the benefit received by C.
C. the personal effects of C and his family.
D. There is no cause because there is no contract between D and C.
212.Rescission is different from annulment in that rescission:
A. is a principal action.
B. may be availed of only by the parties whether bound principally or subsidiarily.
C. is brought to declare the inefficacy inherent in the contract.
D. is based on lesion or damage.
213.These statements are presented to you:
I.
A sale by auction is enforceable between the seller and the buyer although the
memorandum made by the auctioneer on the sale was not signed by the seller and
buyer.
II.
Contracts that are unenforceable under the Statute of Frauds are deemed ratified by
the failure to object to the presentation of oral evidence to prove them.
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In your evaluation of the foregoing statements:
A. Both statements are true.
B. Both statements are false.
C. Only Statement I is true.
D. Only Statement II is true.
214.These statements are presented to you:
I.
Human hair may validly be the object of a contract of sale.
II.
The donation by a mother of a part of her liver to be transplanted to his son is valid.
In your evaluation of the foregoing statements:
A. Both statements are true.
B. Both statements are false.
C. Only Statement I is true.
D. Only Statement II is true.
215.These statements are presented to you:
I.
Innominate contracts, not having any name under the law, are void because no law
or rule governs them.
II.
Facio ut des and Do ut facias are innominate contracts.
In your evaluation of the foregoing statements:
A. Both are true.
B. Both are false.
C. Only Statement I is true.
D. Only Statement II is true.
CONTRACTS
TEST II –MATCHING TYPE. Indicate your answers by writing .The letter representing the
statement or phrase that best describes, defines or explains the numbered items.
Terms
1.
2.
Accessory contracts
Gratuitous contract
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3.
Bilateral contract
4.
Consensuality of contract
5.
Stipulation pour autrui
6.
Option contract
7.
Violence
8.
Lesion
9.
Relatively simulated contract
10.
Reformation of contract
11.
Rescission
12.
Annulment
13.
Void contract
14.
Natural elements of a contract
15.
Preparation of a contract
16.
Formal contract
17.
Contract
18.
Nominate contract
19.
Commutative contract
20.
Liberty of contra
21.
Civil interdiction
22.
Mistake
26. Voidable contract
27. Essential element of a contract
28. Perfection
29. Pari delicto
30. Consensual contract
31. Innominate contract
32. Aleatory contract
33. Consent
34. Relativity of contract
35. Lucid interval
36. Fraud
37. Obligatory force of contract and compliance in good faith
38. Rescissible contract
39. Ratification
40. Statute of Fraud
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41. Accidental elements of a contract
42. Consummation of contact
43. Real contract
44. Intimidation
45. Unilateral contract
46. Principal contract
23. Absolutely simulated contract
24. Motive
25. Remuneratory contract
47.Onerous contract
48. Undue influence
49. Mutuality of contract
50. Cause
Statements
A.
A meeting of minds between two persons whereby one binds himself with respect to
the other to give something or to render some service.
B.
A contract that can stand by itself.
C.
The cause, with respect to one party is the prestation or the promise of a thing or
service by the other party,
D.
A contract whose fulfillment depends upon chance.
E.
Only one party is obligated to do or give something.
F.
The contracting parties may establish such terms and stipulations as they may deem
convenient provided they are not contrary to law, morals, good customs, public order or
public policy.
G.
The principle that contracts are perfected by mere consent.
H.
A stipulation that clearly and deliberately confers a favor upon a third person.
I.
The offeree is given a certain period within which to buy or not the thing being
offered.
J.
A vice of consent where a person 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, ascendant or descendant.
K.
The parties do not intend to be bound at all.
L.
The remedy in equity by means of which a written instrument is made to conform to
the real intention of the parties when some error has been committed.
M.
The cause thereof is the service remunerated.
N.
The action that is brought to set aside a voidable contract.
O.
They are inherent in a contract unless set aside or suppressed by the parties.
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D. acknowledgment by the parties of the instrument evidencing the contract before a
notary public.
205.S, a store owner, sold a gallon of rat poison to B for P1,000.00. B intended to pour the
poison in the fishpond of X, his enemy, to kill all the fish therein. The sale of the rat poison
is:
A. valid provided B does not pursue his motive to kill the fish in the fishpond of X.
B. valid even if B pursues his motive to kill the fish in the fishpond of X.
C. void as it is immaterial whether or not B kills the fish in the fishpond of X since B's
motive is void.
D. void if B pursues his motive to kill the fish in the fishpond of X.
206.The following contracts are voidable, except a contract:
A. between a minor and an insane.
B. where consent was given by a party while in a state of drunkenness.
C. where consent was given by a party while under hypnotic spell.
D. where a party was mistaken as to the substance of the thing object of the contract.
207.It refers to a contract wherein one party imposes a ready-made form of contract, which
the other may accept or reject, but which the latter cannot modify.
A. Aleatory contract.
B. Contract of adhesion.
C. Auto-contract.
D. Innominate contract.
208.A provision in a promissory note authorizing the creditor to increase, decrease or
otherwise change from time to time the rate of interest and/or bank charges without
advance notice to the borrower is violative of which principle of contract?
A. Relativity
B. Mutuality
C. Obligatory force
D. Consensuality.
209.These statements are presented to you:
1
0to a contract.
I.
There may be more than two parties
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II.
A party to a contract may be composed of more than one person.
In your evaluation of the foregoing statements:
A. Statement I is true; Statement II is false.
B. Statement I is false; Statement II is true.
C. Both statements are true.
D. Both statements are false.
210.At the height of the flood, D saw C and his family bringing their personal effects to a
higher ground. He offered his help which was accepted. Thereafer, C gave P500,00 to D
who was not expecting the payment. The contract between D and C is:
A. onerous.
B. remuneratory.
C. gratuitous.
D. There was no contract at all.
211.Refer to No. 210. The cause is:
A. the payment of P500,00.
B. the benefit received by C.
C. the personal effects of C and his family.
D. There is no cause because there is no contract between D and C.
212.Rescission is different from annulment in that rescission:
A. is a principal action.
B. may be availed of only by the parties whether bound principally or subsidiarily.
C. is brought to declare the inefficacy
in the contract.
1 inherent
0
D. is based on lesion or damage.
213.These statements are presented to you:
I.
A sale by auction is enforceable between the seller and the buyer although the
memorandum made by the auctioneer on the sale was not signed by the seller and
buyer.
II.
Contracts that are unenforceable under the Statute of Frauds are deemed ratified by
the failure to object to the presentation of oral evidence to prove them.
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In your evaluation of the foregoing statements:
A. Both statements are true.
B. Both statements are false.
C. Only Statement I is true.
D. Only Statement II is true.
214.These statements are presented to you:
I.
Human hair may validly be the object of a contract of sale.
II.
The donation by a mother of a part of her liver to be transplanted to his son is valid.
In your evaluation of the foregoing statements:
A. Both statements are true.
B. Both statements are false.
C. Only Statement I is true.
D. Only Statement II is true.
215.These statements are presented to you:
I.
Innominate contracts, not having any name under the law, are void because no law
or rule governs them.
II.
Facio ut des and Do ut facias are innominate contracts.
In your evaluation of the foregoing statements:
A. Both are true.
B. Both are false.
C. Only Statement I is true.
D. Only Statement II is true.
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TEST II –MATCHING TYPE. Indicate your answers by writing .The letter representing the
statement or phrase that best describes, defines or explains the numbered items.
Terms
1.
2.
Accessory contracts
Gratuitous contract
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3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
Bilateral contract
Consensuality of contract
Stipulation pour autrui
Option contract
Violence
Lesion
Relatively simulated contract
Reformation of contract
Rescission
Annulment
Void contract
Natural elements of a contract
Preparation of a contract
Formal contract
Contract
Nominate contract
Commutative contract
Liberty of contra
1
Civil interdiction
0
22.
Mistake
26. Voidable contract
27. Essential element of a contract
28. Perfection
29. Pari delicto
30. Consensual contract
31. Innominate contract
32. Aleatory contract
33. Consent
34. Relativity of contract
35. Lucid interval
36. Fraud
37. Obligatory force of contract and compliance in good faith
38. Rescissible contract
39. Ratification
40. Statute of Fraud
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41. Accidental elements of a contract
42. Consummation of contact
43. Real contract
44. Intimidation
45. Unilateral contract
46. Principal contract
23. Absolutely simulated contract
24. Motive
25. Remuneratory contract
47.Onerous contract
48. Undue influence
49. Mutuality of contract
50. Cause
Statements
A.
A meeting of minds between two persons whereby one binds himself with respect to
the other to give something or to render some service.
B.
A contract that can stand by itself.
C.
The cause, with respect to one party is the prestation or the promise of a thing or
service by the other party,
D.
A contract whose fulfillment depends upon chance.
E.
Only one party is obligated to do
1 or give
0 something.
F.
The contracting parties may establish such terms and stipulations as they may deem
convenient provided they are not contrary to law, morals, good customs, public order or
convenient provided they are not contrary to law, morals, good customs, public order or
public policy.
G.
The principle that contracts are perfected by mere consent.
H.
A stipulation that clearly and deliberately confers a favor upon a third person.
I.
The offeree is given a certain period within which to buy or not the thing being
offered.
J.
A vice of consent where a person 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, ascendant or descendant.
K.
The parties do not intend to be bound at all.
L.
The remedy in equity by means of which a written instrument is made to conform to
the real intention of the parties when some error has been committed.
M.
The cause thereof is the service remunerated.
N.
The action that is brought to set aside a voidable contract.
O.
They are inherent in a contract unless set aside or suppressed by the parties.
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P.
Involves preliminary negotiations and bargaining, with no arrival yet of a definite
agreement.
Q.
They must be in the form provided by law, in addition, to having the three essential
requisites of a contract.
R.
The term used when both parties to a contract are guilty.
S.
A contract that is perfected by mere consent.
T.
Its existence depends upon another contract.
U.
The period of temporary sanity of an insane person.
V.
It exists when serious or irresistible force is employed to obtain consent.
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W.
Inadequacy of cause in a contract.
X.
The essential reason of a party in entering into a contract.
Y.
It has all the essential requisites of a contract but which may be set aside by reason
of injury or damage to third persons.
Z.
It is designed to prevent the commission of fraud by requiring certains contracts to
be in writing.
AA.
The delivery of the object is required for its perfection.
BB.
It has a special name under the law,
CC.
The cause thereof is the liberality of the benefactor.
DD.
Both parties are required to perform reciprocal prestations.
EE.
The principle that the contract has the force of law between the contracting parties
and must be complied with in good faith.
FF.
It must refer to the substance of the thing which is the object of the contract or the
principal conditions which moved a party into the contract, in order to vitiate consent.
GG.
The particular reason of a party in entering into a contract.
HH.
The remedy allowed by law to the contracting parties and to third persons to repair
the damages caused them by a contract.
II.
It is defective by reason of the incapacity or vitiated consent of one of the parties to a
contract.
JJ.
Elements without which a contract would not exist.
KK.
The terms of the contract have been fulfilled resulting in its accomplishment.
LL.
A contract that does not have any special name under the law.
MM.
A contract where the parties give equivalent values, hence, there is real fulfillment.
NN.
The manifestation of the meeting of the offer and the acceptance upon the thing and
the cause which are to constitute the contract.
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OO.
The principle that a contract must bind both contracting parties and that its validity
or compliance cannot be lef to the will of one of them.
PP.
The use of insidious words or machinations to obtain consent.
QQ.
An accessory penalty which deprives a person during the term of his sentence of the
rights of parental authority, of guardianship, of marital authority, of the right to manage his
property and of the right to dispose of such property by any act or conveyance inter vivos.
RR.
It is present when a person takes improper advantage his power over the will of
another depriving the latter reasonable freedom of choice.
SS.
The parties hide their real agreement to which they bound as a rule.
1 effect
0 only between the contracting parties, their
TT.
The principle that contracts take
assigns and heirs.
UU.
The adoption or affirmation of a contract which contract which is defective because
of a party's vitiated consent or incapacity.
VV.
A contract without any force and effect since the beginning.
WW.
They refer to the stipulations agreed upon by the contracting parties such as terms of
payment, interest rate, etc.
XX.
The stage of a contract when there is a meeting of minds between the parties on a
definite subject matter and valid cause.
YY.
None of the foregoing.
TEST III - TRUE OR FALSE. Write the word "TRUE” if the statement is true, and the word if the
statement is false.
1.
The determination of the performance of a contract may be lef to a third person,
whose decision shall not be binding until it has been made known to both contracting parties.
2.
A contract entered into in the name of another without authority is unenforceable
against the latter.
3.
Acceptance of a contract by letter or telegram does not bind the offer except from
the time it came to his knowledge.
4.
When the acceptance of a contract is by letter or telegram, the contract is presumed
to have been entered into in the place where the offer was made.
5.
The person making the offer may fix the time, place, and manner of acceptance, all of
which must be complied with.
6.
An offer made through an agent is accepted from the time acceptance is
communicated to the principal by the agent.
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7.
When the offer has allowed the offer a certain period to accept, the offer may be
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withdrawn at any time before acceptance by communicating such withdrawal except when
the option is founded upon a consideration.
8.
Business advertisements of things for sale are definite offers unless it appears
otherwise.
9.
Contracts entered into during a lucid interval are valid.
10.
A simple mistake in the computation in a contract win render the contract voidable.
11.
There is no mistake in a contract if the party alleging knew the doubt, contingency or
risk affecting the contract.
12.
Mutual error as to the legal effect of an agreement even the real purpose of the
parties is frustrated does not vitiate consent since ignorance of the law excuses no one from
compliance therewith.
13.
A threat to enforce one's claim through competent authority, although the claim is
just or legal, 18 intimidation and vitiates consent.
14.
Violence or intimidation employed by a third person upon a contracting party does
not vitiate consent.
15.
The contract is not considered voidable if both parties employed fraud to obtain
consent.
16.
Failure to disclose facts, when there is a duty to reveal them, as when the parties are
bound by confidential relations, does not constitute fraud.
17.
The usual exaggerations in trade, when the other party had an opportunity to know
the facts, are not in
themselves fraudulent.
18.
A mere expression of an opinion does not signify fraud if not made by an expert
although the party has relied on the knowledge of the said person expressing the opinion.
19.
Misrepresentation by a third person does not vitiate consent, unless such
misrepresentation has created substantial mistake and the same is mutual.
20.
Incidental fraud does not render a contract voidable but only obliges the person
employing it to pay damages.
21.
A relatively simulated contract is void.
22.
As a rule, future inheritance may not be the object of contract.
23.
The fact that the quantity of the object of a contract is not determinate does not
affect the validity of a contract, provided that it is possible to determine the same, without the
need of a new contract between the parties.
24.
The illegality of the motive of a party to a contract renders the contract void.
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25.
Although the cause is not stated in the contract it is presumed that it exists and is
1
lawful, unless the debtor proves the contrary
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26.
If a contract is required to be perfection, that form is indispensable and if it ;
followed, the contract is void.
27.
In order that reformation of a contract may be avail by a party, there should be a
meeting of minds of parties to the contract.
28.
Reformation is not available if the contract is void.
29.
When one party has brought an action to enforce instrument, he cannot
subsequently ask for it reformation.
30.
If the terms of a contract are clear and leave no doubt upon the intention of the
contracting parties, the liter, meaning of the stipulation shall control.
31.
The interpretation of obscure words or stipulations in a contract shall not favor a
party who caused the obscurity.
32.
The action for rescission is subsidiary; therefore, it cannot be instituted by a party if
there are other legal means to obtain reparation for the damages he suffered.
33.
Rescission of a contract shall be only to the extent necessary to cover the damages
caused.
34.
Rescission cannot be carried out if the one seeking rescission cannot return whatever
he may be obliged to restore.
35.
Rescission cannot take place when the object of the contract is legally in the
possession of third persons who acted in bad faith.
36.
Alienations by gratuitous title are presumed fraudulent if the donor did not reserve
sufficient property to pay off debts contracted before the donation.
37.
The action for rescission must be commenced within three years.
38.
A voidable contract is binding until it is annulled by a proper action in court.
39.
If a party ratifies avoidable contract, he can still subsequently ask for its annulment.
40.
Ratification requires the conformity of the contracting party who has no right to
bring the action for annulment.
41.
Ratification cleanses the contract from all its defects the moment the ratification was
made.
42.
Annulment of a voidable contract of a voidable contract is available only to those
who are obliged principally or subsidiarily; hence,it cannot be availed of by third persons.
43.
When the defect of the contract consists in the incapacity the contracting parties, the
incapacitated person is obliged to make restitution only to the extent that he has been been
benefited by the thing or the price received by him.
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