Law on Sales Testbank_QUIZZERS_ANS.docx

Colegio de Dagupan Preliminary Period

QUIZ- Business Law and Taxation

1.As a rule, this contract of sale involving a piece of land is void, A. B. C. D. 2.

Between a minor and a capacitated person. Between two insane persons who did not n ot act during lucid interval Between first degree cousins Between husband and wife

X, 17 years years old, sold to Z, Z, of legal age, her necklace worth P20,000 for P15,000. Later, Later, Z sold the necklace to Y for P20,000. P2 0,000. Which of the following statements is correct? A. X has got a voidable title because b ecause at the time of sale, she is a minor B. X can ask for rescission of the sale to Y because she suffered a lesion of more than ¼ of the value of the property. C. If Y is in bad faith, Y becomes the owner of the necklace upon delivery to him but his title is voidable. D. X can ask for the annulment of o f the sale to Y because at the time of sale she is a minor.

3. This serves as a proof of the the perfection of the contract of sale A. B. C. D.

Dacion en pago Option money Delivery Arras

4.A contract of sale is not a(an) A. B. C. D.

Onerous contract Accessory contract Commutative contract Bilateral contract

5.Warranty against hidden defects is A. B. C. D.

An essential element A natural element An accidental element An artificial element

7. When a sale of a piece of land or any interest therein is through an agent, the authority of the agent shall be in writing, otherwise the sale is A. B. C. D.

Valid Voidable Unenforceable Void

8. The sale of an expected thing thing A. Dacion en pago B. Payment by cession

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C. Emptiospei D. Emptio rei-speratae 9. The sale of the hope itself A. B. C. D.

Dacion en pago Payment by cession Emptio spei Emptio rei-speratae

10. One of the following is not correct A. Things subject to a resolutory condition may be t he object of the contract of sale. B. A thing is generic when it is particularly designated or physically segregated from all others of the same class. C. Things having a potential existence may be the object of the contract of sale. D. The sole owner of a thing may sell an undivided interest therein 11. X needs a size of 10 of model 101 of Leather Shoes regularly regularly available to the public for her boyfriend Z, but the same is out of stock so she placed an order for one. On the other hand, Z placed an order for size No. 8, colored violet, (something not ordinarily made by the company) to be given to X. Which is correct? A. B. C. D.

Both are contracts of sale Both are contracts for a piece of work First is a contract of sale second is a contract for a piece of work First is a contract for a piece of work, second is a contract of sale

12. V offered to sell for P12,000,000 P12,000, 000 her house and lot to DD who was interested in buying the same. In her letter to DD, V stated that she is giving DD a period of one month within which to raise the amount and that as soon as DD is ready, they the y will sign the deed of sale. Five days d ays before the expiration of the one month period. V went to DD and told her that she is no longer willing to sell the property unless the price in increased to P15,000,000. Which is correct? A. B. C. D.

DD may compel V to accept the P12,000,000 first offered. V may compel DD to pay P15,000,000 V and DD should shoulder the P3,000,000 difference DD cannot compel V to accept the P12,000,000 first offered

13. If the object of the contract is specially made or manufactured at the specific order of another, it is a contract for a piece of work. This is A. English rule B. Massachusetts rule C. New York rule D. Chicago rule 14. If the article article already exists and subsequently acquired by another, it is a contract contract of sale, and if the article is still to be manufactured at the instance of another, it is a contract for a piece of work. This is A. English rule







15. If the material used in the manufacturer of the article is more valuable, it is a contract of sale, and if the labor or skill is more valuable than the material used in the manufacture of the article, it is a contract for a piece of work. This is A. English rule B. Massachusetts rule C. New York rule D. Chicago rule

16. The rule observed in the Philippines is A. English rule B. Massachusetts rule C. New York rule D. Chicago rule 17. The Realty Installment Buyer Protection Act applies to all transactions involving the sale or financing of real estate on installment but it excludes the following except: A. B. C. D.

Sale or financing of industrial lots Sale or financing of commercial building Sale to tenants under the Land Reform Code Sale of residential condominiums

18. Delivery by merely pointing to the object of sale if it cannot be delivered to the vendee at the time of the sale is A. B. C. D.

Traditio longa manu Traditio brevi manu Traditio constitutum possessorium Traditio symbolica

19. Effected when the object of sale is already in the possession possession of the vendee at the time of sale so that delivery need no longer be made is A. B. C. D.


20. When the owner of the thing sells it to vendee, but continues to have possession or occupation of the thing not as owner but as tenant or lessee A. B. C. D.


21. Goods are deemed in transit A. When the buyer accepts delivery of the goods upon arrival at destination B. When the buyer intercepts and lawfully takes possession of the goods at any point before







D. When the carrier or bailee, upon arrival of the goods at destination acknowledges to the buyer or his agent that he is holding the goods as bailee for the latter. 22. Goods are deemed no longer in transit A. If the goods are rejected by the bu yer for a valid reason and the carrier or other bailee continues in possession of them, even if the seller has refused to receive them back. B. From the time they are delivered to a carrier by land, water or air for the purpose p urpose of transmission to the buyer. C. From the time they are delivered to a bailee for the purpose of transmission to the buyer until the buyer or his agent in that behalf, takes delivery of them from such bailee. D. If the carrier or other bailee wrongfully refuses to deliver the goods to the buyer or his agent in that behalf. 23. X sold to V orally orally a parcel of land for P200,000. X effected the delivery of the the land. The payment of the price was to be made three month later. At the end of three month period A. B. C. D.

V may refuse to pay claiming in his defense d efense the Statute of Frauds V may return the parcel of land to X X can collect from V because the contract has already been executed V may refuse to pay on the t he ground that there is no written contract to support the sale.

24. On January 15, 2010, X sold for P2M her house and lot to V. It It was agreed that delivery of the house and lot, and the payment therefore, would be made on March 10, 2010. Unfortunately, Z a stranger negligently set the house on fire on February 25, 2010, and the house was completely destroyed. Which is correct? A. V is not required to pay the P2M since the contract had no subject matter. B. X must still deliver the lot but is excused from delivering the house, while V must still pay the P2M C. X must deliver the lot while V should pay pa y only the amount equivalent to the value of the lot. D. X need not deliver the lot while V need not pay the P2M 25. If immovable property should have been sold to different different vendees, the ownership shall be transferred to the person A. B. C. D.

Who have first taken possession in good faith Who presents the oldest title in good faith Who in good faith first recorded it in the Registry of Property Who have paid in good faith the purchase price in full

26. Using the preceding number, if movable property, it shall belong to the person A. B. C. D.

Who have paid in good the purchase price in full Who in good faith first recorded it in the Re gistry of Property Who presents the oldest title in good faith Who have first taken possession in good faith

27. Action by the vendee against the vendor to nullify the sale due to to some vices or defects which render the object of sale unfit for the use intended or knowledge of o f which the vendee should not have bought the thing







28. Action to seek a corresponding reduction in price by reason of some vices or defects in the thing purchased A. B. C. D.

Accion quanti minoris Accion reinvidicatoria Accion pauliana Redhibilitory action

29. The redhibitory action based on the faults or defects of animals must be brought within A. B. C. D.

30 days from delivery to the vendee 40 days from delivery to the vendee 45 days from delivery to the vendee 6 months from delivery to the vendee

30. In contract of sale, if the price is absolutely simulated, the sale is A. B. C. D.

Unenforceable Voidable Void Rescissible

31. In a contract of sale, of personal property, the the price of which is payable in installments, the vendor may exercise any of the following remedies, except A. Exact fulfillment of the obligation, should the vendee fail to pay any installment B. Cancel the sale, should the vendee’s vende e’s failure to pay cover two or more installment C. Foreclose the chattel mortgage on the thing sold, if one has been constituted should the vendee’s failure failure to pay cover two or more installments D. Rescind the sale should the vendee fail to pay any installment.

32. The right of the seller seller to stop goods in transit, upon discovering that the the buyer does not have the funds to pay for the goods A. B. C. D.

Pre-emptive right Appraisal right Voting right Right of stoppage in transit

33. A sold to B a parcel of land for P3.8M. The sale is evidenced by a memorandum of agreement of sale written in the Bicolano dialect. One week later, A sold the th e same parcel of land to C for P4M. This is evidenced by a formal deed of sale. Upon buying the property, C, who was aware of the first sale immediately took possession of the lot. When informed of the second sale, B subsequently registered an adverse claim to the property. Later, C registered the deed of sale in her favor. The parcel of land shall belong to A. B because he has got an older title B. C because he is the first to register C. C because he is the first to take possession D. No one as both sales are void







B. Waiver consciente C. Waiver cursunada D. Waiver inocente

35. Using the preceding number, where the seller is no longer liable A. B. C. D.

Waiver intentionada Waiver consciente Waiver cursunada Waiver inocente

36. A contract of sale whereby the seller acquires the right right to redeem or repurchase repurchase the object of the sale from the buyer within a certain period agreed upon A. B. C. D.

Equitable mortgage Absolute sale On sale or return Pacto de retro sale

37. A sold to B his car and promised to deliver ten days later. The next day, after the sale to B, A sold the same car to C and immediately affected delivery. On the day agreed upon, A did not deliver the car to B. Which is correct? A. B can cancel the contract between A and C, because the contract between A and B was perfected ahead of the contract between A and c B. B should make the demand to make A in default C. A is liable to B for the value of the car plus damages after B makes a demand D. A is liable to B for damages and is in default without need of any demand 38. X sold to V her Yamaha organ. It was agreed that X would fix the price a week later. At the agreed time, X named the price P10,000. V agreed. Was the sale perfected? A. No, because the price was left to the discretion of one of the contracting parties B. No, because at the time of sale the price was not fixed C. Yes, because the price fixed by one of the parties was accepted by the other D. Yes, because there was agreement that X would fix the price 39. Not an implied warranty in a contract of sale sale A. B. C. D.

Right to sell the thing at the time of perfection of the contract Reasonably fit for the purpose they are acquired Merchantable in quality Free from charges or encumbrances not declared or known to the buyer

40. After the death of C, A, C’s son, sold his inheritance though its amount has not yet been determined to B for a consideration of P1,000,000. Which is correct? A. The contract is valid if the value of inheritance inhe ritance is at least equal to P1,000 ,000 B. The contract is valid even though the inheritance to be turned over to B is less than P1M C. The contract is void as future inheritance cannot be the object of sale D. The contract is unenforceable









A. C cannot be considered as the owner because the original seller (X) is not the real owner. B. P may recover the fountain pen from C without reimbursement because he is the legal owner. C. C became the owner because he purchased the pen from a merchant store D. C became the owner regardless of whether the seller is a store for pens or not because C bought it in good faith. 42. When goods are delivered to the buyer on “sale or return” for for period of seven days, ownership of the goods passes to the buyer bu yer A. B. C. D.

Upon perfection of the contract Upon acceptance by the buyer of the offer of the seller Upon expiration of seven days Upon delivery of the goods

43. Quasi-traditio is equivalent to A. B. C. D.

Traditio longa manu Traditio brevi manu Traditio constitutum possessorium Execution of a public instrument

44. Vi imported radios from Taiwan and asked for 220 volts radios. The radios arrived clearly clearly labeled 220 volts and Vi sold them to the public as such. Later the customer complained that the radios have been mislabeled by the manufacturer and that they were good only for 110 volts. As a consequence A. B. C. D.

Vi is liable to the vendees for any hidden defects even though he is not aware. Vi is not liable because he is in good faith Vi is not liable under the principle of “caveat “ caveat emptor” or let the buyer bu yer beware The vendees may hold the manufacturer liable but not Vi because Vi specifically asked for 220 volts

45. If the redemption redemption is to be made by the seller, seller, one of the following need not be given to the Buyer A. B. C. D.

Expenses of the contract Interest on the price of the sale Necessary expenses on the thing sold Price of the sale

46. Not an element of the sellers sellers right of stoppage in transit







C. Yes, but A must give another car to B because of the principle “genus nunquam peruit” or generic thing never perishes D. Yes, because the principle pr inciple “res perit domino” or the thing perishes with the owner. 48. A, B and C are co-owners of an undivided parcel of land, A sold sold his 1/ 3 interest interest to B absolutely. Which is correct? A. C may exercise his right of redemption of the interest sold by A to B B. C cannot exercise the right of redemption because the sale was made in favor of a co-owner C. The sale made by A to B is void because it was not made in favor of a stranger D. C may redeem only 1 /2 of the interest sold by A to B 49. Using the preceding number, suppose, instead instead of selling his interest to B, A sold it to D, who can exercise the right of redemption? A. B. C. D.

Both B and C B but not C C but not B A, B and C

50. Which of the following cannot be the object of a contract of sale? A. B. C. D.

Sale of credit Young animal not yet conceived at the time of perfection Land which the seller expects to buy Future inheritance

51. A offered for sale to B 20 cavans of wagwag rice and fixed the price per cavan at P10 over the price offered at Z’s store in Cainta Market. The price is A. B. C. D.

Not certain because the price at Cainta Market is not stated Certain because it has got reference to another thing which is certain Certain because there is a price ceiling for p rice of land Not certain so court may fix the price

52. X sold his motor vehicle vehicle to V who bought it for for P200,000. It turned out however, that that X has 2 motor vehicles: Toyota valued at P230,000 and Lancer valued at P220,000. Which is correct? A. There is no contract of sale between X and V B. The parties may ask for interpretation or reformation C. The parties can ask for annulment of the contract







pointing at the mango trees. For legal purposes, X has fulfilled her obligation to deliver the mango fruits to V by A. B. C. D.

Traditio longa manu Traditio brevi manu Traditio constitutum possessorium Execution of a public instrument

55. X sold her specific car to V for P200,00 payable in 5 equal installments. X delivered the car to V but a mortgage was constituted co nstituted on the car to answer for the unpaid un paid installments. V paid the first 2 installments but failed to pay the last 3 installments. X foreclosed the mortgaged property and sold it at public auction for P100,000. Which is correct? A. B. C. D.

X can recover from V the balance of P20,000 even if there is no stipulation to that effect X can recover from V the balance of P20,000 if there is stipulation to that effect X cannot recover the deficiency deficienc y except if there is stipulation to that effect X cannot recover the deficiency even if there is stipulation to the contrary

56. Ownership of the thing sold is A. B. C. D.

Retained by the seller in “sale or return Transferred to the buyer upon constructive or actual delivery of the thing sold Acquired by the buyer upon perfection of the contract Transferred to the buyer upon acceptance of the price

57. X sold his horse to Y for P40,000. No payment has yet yet been made and the sales document does not provide the date of delivery. Before delivery and payment the horse gave birth to a baby horse, which is correct? A. B. C. D.

Y is entitled to the baby horse which was born after the perfection of the contract X is entitled to the fruit (baby horse) as Y has not paid the price yet X is entitled to the (baby horse) because it was born before his obligation to deliver arises Y should pay additional amount for the baby horse to be entitled to it

58. A contract of sale is in the stage of conception when A. B. C. D.

There is meeting of the minds Negotiations are in progress The parties come to an agreement The contract is perfect

59. A seller sold to to a buyer a piece of jewelry at a price of P25,000. The contract provides that the buyer will pay the seller cash, P20,000 P 20,000 and for the balance, balan ce, the buyer will give the seller







61. X leased to V a 5 Freezer Freezer for two years years at a lease rental fee of P1,000 per month and signed an option in favor of V to buy the freezers at the end of the term of the lease at P50,000. All rental fee paid are to be considered as partial payment of the sale. After 12 months V was able to pay the rental fee for 9 months and was in arrears for three months. X terminated the lease contract and repossessed the freezers. The co nsequence of the transaction is A. B. C. D.

X can collect the rental fees for three months which are in arrears. X can collect the rental fees for the unexpired 12 months of the lease contract. When X took possession of the generator, he has no further action against V X in terminating the lease and repossessing the gen erator is obliged to refund the 9 months rental fee, paid by V even if there is a stipulation to the contrary. con trary.

62. X sold his car to Z for P60,000. No date was fixed fixed for the performance of the obligation of the seller and the buyer. The obligation of X is A. B. C. D.

To deliver the car immediately because the sale is a perfected contract To deliver the car only after Z writes to X demanding the delivery of the car. To deliver the car only after Z pays the P60,000 To rescind the contract because there is no time fixed for the delivery

63. I. The vendor need not be the owner at the time the sale is perfected. It is sufficient that he is the owner at the time the thing sold is delivered. II. The sale of a vain hope or expectancy is voidable. A. B. C. D.

First statement is true, second statement is false. First statement is false, second statement is true. Both statements are true. Both statements are false

64. I. There may be a contract of sale sale of goods, whose acquisition by the seller depends upon a contingency which may or may not happen. II. If the consideration of the contract consists partly in money and partly in another thing, it shall be considered a barter if the value of o f the thing given as a part of the consideration exceeds the amount of the money or its equivalent. A. B. C. D.


65. I. If the price is grossly inadequate, the sale is void.







A. B. C. D.


67. I. Should the vendee’s failure failure to pay, cover two or more installments, the vendor may foreclose the chattel mortgage on the thing sold but he shall have no further action against the purchaser to recover any unpaid balance of the price, except if there is an agreement to the contrary. II. Sale is a consensual contract, therefore delivery or pa yment is not essential for perfection. A. B. C. D.


68. I. The ownership of the thing thing sold shall be transferred to the vendee upon perfection of the contract. II. An unaccepted unilateral promise to buy bu y or to sell a determinate thing for a price certain is binding upon the promissory. A. B. C. D.


69. I. The husband and the wife cannot sell property to each other, as a rule. II. The sale of a piece of land or interest therein when made thru an agent is void unless the agent’s authority is in writing even if the sale itself is in s public instrument and has been registered. A. B. C. D.


70. I. The expenses for the execution and registration registration of the sale shall be borne by the vendee, unless there is a stipulation to the contrary. II. If the same thing should have been sold to different vendees the ownership shall be









B. First statement is false, second statement is true. C. Both statements are true. D. Both statements are false 72. I. If the animal sold should die within three three (3) days after its purchase, the vendor shall shall be liable to the vendee. II. The fixing of the price can never neve r be left to the discretion on one of the contracting parties. However, if the price fixed by one of the parties is accepted by b y the other, the sale is perfected. A. B. C. D.


73. I. Option money is considered as part of the purchase price while earnest money is not. II. The Maceda Law refers to the sale of personal p ersonal property by installments while the Recto Law refers to the sale of real property by installments. A. B. C. D.


74. I. If two or more animals are sold together, together, whether for lump sum or for a separate price for for each of them, the redhibitory defect of one shall give rise to the redhibition redhib ition of the others. II. There is no warranty against hidden defects of animals sold at fairs or at public auctions or of livestock sold as condemned. A. First statement is true, second statement is false. B. First statement is false, second statement is true.







D. Both statements are false 77. I. Unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof by installment. II. In case of doubt, a contract purporting to be an equitable mortgage shall be construed as a sale with a right to repurchase. A. B. C. D.


78. I. The creditors of the vendor cannot make use of the right of redemption against the vendee, until they have exhausted the property of the vendor. II. Sale is a real contract because delivery is n ecessary to transfer ownership to the buyer. A. B. C. D.

First statement is true, second statement is false. First statement is false, second statement is true. Both statements are true. Both statements are false -end of quiz-

Law on Sales Testbank_QUIZZERS_ANS.docx

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