EXERCISES IN CONTRACTS INCLUDING CPA EXAMINATION QUESTIONS TRUE OR FALSE 1. Obligations Obligation s and contracts are identical. 2. The object of a contract of sale is its subject matter. 3. If a valid contract is novated to void contract, both contracts are considered void. 4. Without contract, a person cannot be liable to another. 5. Consummation of a contract is manifested by the offer and acceptance. 6. The statement of a false cause in contracts shall render them void, if it should not be proved that they were founded upon another cause which is true and lawful. 7. Annulment Annulment is available only to persons who are obliged principally or subsidiarily. It is not available to third persons. 8. If mistakes, fraud, inequitable conduct, or accident has prevented a meeting of the minds of the parties, the proper remedy is not reformation of the instrument but annulment of the contract. 9. The action or defense for the declaration of the inexistence of void contract does not prescribe. 10. Voidable 10. Voidable contracts contracts cannot cannot be ratified. ratified.
11. A 11. A contract contract which is the direct result of a previous illegal contract, is also void and inexistent. 12. An 12. An offer becomes effective even with even with the death of either party after acceptance after acceptance is conveyed. 13. When one party is insane and the other is an unemancipated minor, the contract is unenforceable. 14. Accidental 14. Accidental elements of a contract are those agreed upon by the parties, and cannot exist without being stipulated. 15. X advertised his lot for sale in a newspaper of general circulation. The advertisement states: “For sale: 500 sq. m. located at No. 3333 Buendia Avenue, Makati, Metro Manila. Price: P500,000.00. Term of payment: Cash only”. W accepted the offer by sending a letter lett er to X which the latter received. X can still back out from his offer because his advertisement is merely an invitation to make an offer.
FALSE TRUE FALSE. The novation is void, but the original contract subsists False. Sources of obligations are: 1) Law 2) Contracts FALSE? Maybe perfection ??? TRUE The cause is presumed to be valid and subsisting GENERALLY: TRUE, However, if third persons’ rights are prejudicially affected, they can assail the contract TRUE. Reformation is proper when there was meeting of the minds but the true intention of the parties is not shown on the contract TRUE FALSE. Only void contracts contracts cannot be ratified. Ratification may be express or tacit. When tacit, the reason for the voidability must have ceased, and the person who has the right to invoke ratification should execute an act which necessarily implies an intention to waive his right TRUE TRUE. In that they cannot give consent, TRUE TRUE
FALSE. By meeting the offer with his acceptance, there has been consent.
16. Unless it appears otherwise, business advertisement of things for sale are not definite offers, but mere invitations to make an offer. 17. The contracting parties may establish such stipulation, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. 18. Contacts must bind both contracting parties; their validity or compliance cannot be left to the will of one of them. 19. Contracts take effect only between the contracting parties.
TRUE
TRUE. Freedom to contract
TRUE. Principle of mutuality?
…FALSE?
…their heirs and assigns, unless the rights are intransmissible by nature, stipulation or law. 20. Consensual contracts are not perfected until the FALSE. This is characteristic of a delivery of the object of the obligation. REAL Contract 21. Real contracts are perfected by mere consent. FALSE. Consensual contracts 22. An offer becomes ineffective upon the death, TRUE civil interdiction, insanity, or insolvency of either party before acceptance is conveyed. 23. When the offer has allowed the offeree a certain Suggested answer: TRUE period to accept , the offer may be withdrawn at any time before acceptance, except when the FALSE. By communicating such option is founded upon a consideration, as withdrawal something paid or promised. 24. Acceptance made by letter or telegram does not TRUE bind the offerer except from the time it came to his knowledge. The contract, in such a case, is presumed to have been entered into in the place where the offer was made. 25. When the offerer has allowed the offeree a TRUE certain period to accept, the offer may be withdrawn at any time before acceptance by communicating such withdrawal, except when the option is found upon a consideration as something paid or promised. 26. Mutual promise to marry if orally entered into is FALSE. Unless to be performed for unenforceable. more than one year 27. The action for annulment on the ground of fraud FALSE. Four years from the shall be brought within four (4) years from the DISCOVERY of fraud or mistake. time of the perfection of contract. 28. Misrepresentation made is good faith is not TRUE fraudulent but may constitute error. 29. In order that fraud may make a contract TRUE voidable, it should be serious and should not have been employed by both contracting It must be the reason why the other parties. Incidental fraud only obliges the party entered into the contract. person employing it to pay damages. 1170. fraud in the performance of an obligation warrants damages 30. If one party was mistaken and the other acted REFORMATION IS CORRECT fraudulently or in such a way that the instrument ACTION, FALSE does not show their true intention, the former may ask for the annulment of the instrument. 31. The interpretation of obscure words or TRUE stipulations in a contract shall not favor the party who caused the obscurity. 32. Advertisement for bidders are simply invitations TRUE to make proposals, and the advertiser is not
bound to accept the highest or lowest bidder, unless the contrary appears. 33. Contracts entered into during a lucid interval are valid. Contracts agreed to in a state of drunkenness or during a hypnotic spell are binding. 34. In order that mistake may invalidate consent, it should refer to the substance of the thing which is the object of the contract, or to those conditions which have principally moved one or both parties to enter into the contract. 35. A threat to enforce one’s claim through competent authority, if the claim is just or legal, does not vitiate consent. 36. Violence or intimidation shall not annul be obligation, if it was employed by a third person who did not take part in the contract. 37. Failure to disclose facts, when there is a duty to reveal them, as when the parties are bound by confidential relations, constitutes fraud. 38. A mere expression of an opinion does not signify fraud, unless made by an expert and the other party has relied on the former’s special knowledge. 39. Contracts take effect only between the parties, their assigns and heirs, except in cases where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law. The heir is not liable beyond the value of the property her received from the decedent. 40. If one or both debts are voidable, the same may be compensated provided they are not yet avoided. 41. An agreement by its term that it be performed within a year from the making thereof is enforceable even if entered into orally. 42. An offer made through an agent is perfected from the time acceptance is communicated to the principal. 43. If the cause is not stated in the contract, it is presumed that it is unlawful. 44. When the real agreement of the parties stated in a contract is void, the parties can ask for reformation of the instruments. 45. By provision of the law on contracts, where the amount involved in the contract exceeds P500, it must appear in writing or in public instrument. A contracted a loan of P5,000 from B which is not reduced in public instrument or writing. B cannot recover the loan because the contract is not valid. 46. In the case of an illegal contract where there is a criminal offense, the parties cannot be prosecuted if they are both in pari-delicto. 47. Persons who are capable cannot allege the incapacity of those with whom they contracted. 48. The action for rescission is subsidiary; it cannot be instituted except when there is no other legal
TRUE. Binding meaning valid? Yes. Because they are voidable, i.e. valid until annulled. TRUE
TRUE
FALSE. It shall annul, even though made by person not a party to the contract TRUE
TRUE
TRUE
TRUE. VALID UNTIL ANNULLED
TRUE. Statute of Frauds only apply when it is to be performed for more than a year TRUE. As long as the acceptance of the principal is absolute FALSE. It is presumed valid and existing FALSE. There is nothing to reform if the real agreement is void Apparently this refers to 1358, which only requires a public instrument, or that the contract be in writing, FOR CONVENIENCE. This does not bar the validity of the contract, which B may have the contract be in writing. FALSE FALSE. They will both be prosecuted nonetheless. TRUE. TRUE. In contrast to annulment
means to obtain reparation for damages suffered. 49. Void contracts cannot be retified. Neither can the right to set up the defense of illegality be waived. 50. Delivery of the subject matter is necessary to the perfection of the contract of sales.
TRUE
False. It is a consensual contract, but ownership only passes by delivery, actual or constructive 51. Contracts entered into during a lucid interval are VALID. FALSE voidable. 52. There is intimidation when in order to wrest FALSE. This is violence consent, serious or irresistible force is employed. 53. Misrepresentation made in good faith is not TRUE fraudulent but may constitute error. 54. Cause is the essential or more proximate TRUE? purpose which the parties have in view of entering into the contract. 55. Contracts shall be obligatory, in whatever form TRUE. For solemn or formal they may have been entered into, provided all contracts the essential requisites for their validity are present. 56. When, there having been a meeting of the minds TRUE of the parties to a contract, their true intention is not expressed by reason of mistake, fraud, inequitable conduct or accident, one of the parties may ask for the reformation of the instrument. 57. Qualified acceptance is considered counter- TRUE, which effects no meeting of offer. the minds 58. Consent is the manifestation of the meeting of TRUE the offer and the acceptance upon the thing and the cause of the contract. 59. Acceptance made by letter or telegram does not TRUE bind the offerer except from the time it came to his knowledge. 60. Contracts agreed to in a state of drunkenness or TRUE. ALTHOUGH VOIDABLE, VALID during a hypnotic spell are valid. UNTIL ANNULLED 61. Dolo causante shall make a contract voidable. TRUE 62. Dolo incidente only obliges the person TRUE employing it to pay damages. OBLICON MULTIPLE CHOICE 1. These persons are bound by contracts: a. Contracting parties b. Assigns or Assign c. Heirs d. All of them 2. Who is liable for the loss of the subject matter by fortuitous event? a. Creditor b. Debtor c. Both creditor and debtor d. None of them 3. Contract that is made for a valuable consideration is: a. Onerous b. Gratuitous c. Onerous and gratuitous d. None of the them
D
D
A
4. A intimidated B to marry A’s daughter. After a year, B would like to file action for annulment but could not do so because A was around to intimidate him. The marriage contract is: a. Resicissible b. Voidable c. Void d. unenforceable 5. The following, except one, are the characteristics of void or inexistent contract. Which is the exception? a. The defense of illegality of the contract is available to third persons whose interests are not directly affected. b. They are not subject to ratification. c. The right to raise defense of illegality cannot be waived. d. The action or defense for declaration of their nullity or inexistence of the contract does not prescribe. 6. Example 1: G, guardian of W, sold W’s house valued at P50,000 for P37,500 or a lesion by onefourth of the value Example 2: S sold his house valued at P50,000 for only P10,000 because S did not know the true value of the house. a. Both contracts are rescissible. b. Only no. 1 is rescissible. c. No. 2 is voidable because there is an error or mistake. d. Both contracts are valid and enforceable. 7. When there is concurrence of offer and acceptance, there is: a. Payment b. Revocation c. Consent d. None of the above 8. Essential requisites of a contract: a. Consent b. Cause c. Subject d. All of them 9. A contract where both parties are incapable of giving consent is: a. Void b. Voidable c. Unenforceable d. rescissible 10. the stage of “conception” of a contract is: a. When the contract is fully executed. b. When the parties come to an agreement. c. When negotiations are in progress. d. When there is a meeting of the parties’ minds. 11. In order that fraud may make a contract voidable, a. It may be incidental but should have been employed by both parties.
B
A
D Even though there is lesion in no. 2, this is not one of the contracts listed rescissible by the code.
C
D
C
C Preparation: Conception generation Perfection (birth) Consummation (death termination) C
or
or
b. It should be serious and the parties must be in pari delicto. c. It should be serious and should not have been employed by both contracting parties. d. It may be incidental but both parties should not be in pari delicto. 12. Simulation of Contract – Absolute or relative. Relative when: a. Parties are not bound at all. b. The contract is void. c. The parties conceal their true agreement. d. None of the above. 13. Mr. Esguerra, a former government employee, suffered from severe paranoia and was confined in the mental hospital in 2001. After his release, he was placed under the guardianship of his wife to enable him to get his retirement pay. In 2004 he became a mining prospector and sold the mining claims. In 2007, he sued to annul the sale claiming that he was mentally incapacitated at the time of sale. The sale in question was: a. Illegal b. Void c. Voidable d. valid 14. Which of the following contracts is enforceable even if not executed in writing? a. Lease of personal property for 2 years. b. An agreement for the sale of immovables. c. Lease of immovables for a period longer that one year. d. A representation as to the credit of a third person. e. None of the above. 15. A contract where one of the parties is incapabale of giving consent is: a. Resicissible b. Voidable c. Void d. Unenforceable e. None of the above. 16. In three of the following defective contracts, ratification cleanses the defects. Which is the exception? a. Both parties are incapable of giving consent. b. Sale of immovable property or interest orally entered into. c. Sale of a piece of land thru an agent, the authority is oral. d. Contracts entered into by a person who has been given no authority. 17. In a contract, as written, D promises to pay C P10,000 on September 15, 2012. The consideration received by D is not stated in the contract. a. The contract is valid because the cause is always presumed to exist.
C
C Because his incapacity did not end? Or D, because by becoming a mining prospector he had become sane?
A. MUST BE OF REAL PROPERTY TO BE REQUIRED TO BE IN WRITING E Or B, because immoveables might not refer to real property?
B
C, sale itself is void.
A
b. The contract is valid so long as it is in writing. c. The contract is valid because cause is not essential to a contract. d. The contract is void because the cause is not stated. 18. S entered into a contract with B by threatening B because the threat is unjust and B that if B does not agree to make the contract, not legal? S will publish defamatory matter concerning B’s wife. a. The contract is valid because the defamatory matter to be published does not relate to B, the contracting party. b. The contract is voidable because such publication when carried out whether true or not will cause a serious harm to B and his wife. c. The contract is unenforceable but B is entitled to damages the moment the publication is made. d. Contract is void. 19. Example no. 1: D owes C P10,000 due on In no. 2 both debts are valid until December 25. C owes D P6,000 due on annulled, thus legal compensation December 25. D’s obligation is guaranteed by G. may take place Example no. 2: D owes C P10,000 payable on December 25. Later, D, through intimidation, was able to make C sign a promissory note stating that C is indebted to D for the same amount. In here, D cannot be required to pay C P10,000 because he (D) can set up compensation against C. a. Both examples are true. b. Both are false. c. Only no. 1 is true; No. 2 is false. d. Only no. 2 is true; No. 2 is false. 20. Valid until annulled unless there has been a ratification: a. Rescissible contract. b. Inexistent contract. c. Voidable contract. d. None of the above. 21. Contracts that cannot be sued upon unless ratified: a. Voidable b. Unenforceable c. Rescissible d. None of the above 22. Which of the following contract is voidable? a. Those whose object is outside the commerce of men. b. Those whose are absolutely fictitious. c. Those where one of the parties is incapacitated. d. Those which contemplate an impossible service. 23. The duty not to recover what has voluntarily been paid, although payment was no longer required: a. Natural obligation b. Moral obligation c. Civil obligation
D
C
B
C
A
d. None of the above 24. Which of the following contacts is voidable? a. Those where both parties are incapable of giving consent to a contract. b. Those undertaken in fraud of creditors when the latter cannot in any other manner collect the claims due them. c. Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud. d. Those whose object is outside the commerce of men. 25. Which of the following contract is rescissible? a. Those where one of the parties is incapable of giving consent to a contract. b. Those where both parties are incapable of giving consent to a contract. c. Those which are entered into by guardians whenever the wards whom they represent suffer a lesion of more than ¼ of the value of the object of the contract. d. Those which are absolutely simulated or fictitious. 26. Rescission of contract can take place in this case: a. When the things which are the object of the contract are legally in the possession of third persons who acted in good faith. b. When he who demands rescission can return whatever he may be obliged to restore. c. When the party seeking resolution can perform only as to part and rescind as to remainder. d. When the seller cannot return the installments paid to him by the buyer. 27. L entered into a contract of lease with X. T, the clerk of L, typed the document. Due to T’s negligence, the document made was that of sales instead of lease. a. The remedy is annulment. b. Parties may go to court for interpretation. c. Parties may enforce their right because it is enforceable. d. None of the above. 28. S owns an oil painting. Being in need of money, S sold the painting to B for P1,000. After the sale, S discovered that the painting was valuable and worth P5,000. a. S may rescind the contract on ground of lesion or inadequacy of cause. b. S may annul the contract on ground of fraud. c. S may annul the contract on ground of error. d. B is entitled to the benefit of the contract because it is valid and binding. 29. G was appointed guardian of S, the latter being 16 years old. S sold his parcel of land in writing to B valued at P100,000 for P75,000, suffering
C
C
B
D. the proper remedy is reformation of the instrument
D
D. SALE BY A MINOR!
lesion by ¼ of the value. What is the status of the contract? a. Rescissible b. Unenforceable c. Enforceable d. voidable 30. A appoints B to sell his land. Example No. 1: If the authority of B is oral and B sells the land in writing, the sale is valid. Example No. 2: If the authority of B is in writing and B sells the land orally, the sale is valid. Which of the following is correct? a. First example is false but second example is true. b. Both examples are true. c. Both examples are false. d. First example is true but second example is false. 31. Three of the following contracts are void. Which is the exception? a. Sale of animal suffering from contagious disease. b. Contract where the cause is immoral. c. Relatively simulated contract. d. Will pay you P10,000 “if I like”. 32. D forced C to lend him P10,000. The promissory note is in writing. a. The contract is rescissible because the contract is fraudulent. b. The contract is void. c. C cannot demand payment from D because the contract is unenforceable. d. Contract remains to be valid. 33. The stipulation in a contract to the effect that the debtor should remain as a servant in the house and in the service of her creditor so long as she had not paid her debt is void because it is: a. Contrary to good custom. b. Contrary to public policy. c. Contrary to law and morality. d. None of the above. 34. X, after the death of his father, sold his inheritance though its amount has not yet been determined to B, for a consideration of P50,000. a. The contract is valid only if the inheritance values at least equal or more than P50,000. b. The contract is rescissible. c. The contract is valid even though nothing remains of her inheritance to be turned over to B. d. Contract is void, future inheritance cannot be the object of sale. 35. One of the stipulations contained in the contract between M Company and its employees is that the company shall pay a bonus to employees of the company who shall continue its employment for at least 2 consecutive years, unless he quits or is discharged before the expiration of the
1 VOID 2 VALID A
C
D d
C
C
D
period of 2 years. X, an employee of the company, was discharged without just cause one week before the completion of the two-year period. a. X is not entitled to the bonus because his discharge was in accordance with the contract. b. X is not entitled to the bonus, because the employer’s right to terminate is superior than the right of the employee to be employed. c. X is entitled to the bonus whether the discharge is with or without cause. d. X is entitled to the bonus because the debtor company has voluntarily prevented the happening of the condition. 36. Which of the following is not a requisite for the validity of a contract? a. Consent. b. Object. c. Cause or consideration. d. Delivery of the thing. e. None of the above. 37. Before acceptance is conveyed, an offer becomes ineffective upon: a. Death. b. Civil interdiction. c. Insanity. d. Insolvency of either party. e. All of the above. 38. Example 1: S sold to B in a private instrument his land. Later, B wanted to have the sale registered, but registration requires a public instrument. In here, B may compel S to execute the needed public instrument. Example 2: S sold to B orally his specific land. After B paid S the price of the sale, he wanted to register the land in his name but he needed a public instrument of sale. In here, B may compel S to execute the needed public instrument. a. Both examples are false. b. Only No.1 is true. c. Only No.2 is true. d. Both examples are true. 39. X alleged that Y promised to give X one hectare of land. This is in consideration of X’s meritorious service to Y. Y pleads in defense that since the promise was not writing, it is unenforceable under the Statue of Frauds. Decide. a. The promise is unenforceable because it is not in writing. b. The Statue of Frauds is applied because X has rendered services already. c. The Statue of Frauds is inapplicable here, because the promise to give the land is not a sale of real property. d. The Statue of Frauds can apply to partially executed contract. 40. An incidental element of a contract:
D. except in real contracts
E
D. both contracts are valid, (2) the sale is valid, no unenforceable because it is already consummated, no longer executory
C the statute of frauds requires sale of real property, or interest therein, be in writing…
B
a. Implied warranty in sale. b. Payment of interest in a loan. c. Delivery of the object in contract of pledge. d. All of the above. 41. Statue of Frauds is applicable to: a. Partially executed contract. b. Oral contract of loan when the amount involved is less than P500. c. Contract not to be performed within a year from making thereof. d. All of the above. 42. By provision of law, which of the following contracts is not required to appear in a public document? a. Acts and contracts which have for their object the creation, transmission, modification or extinguishment of real rights over immovable property. b. The cession, repudiation or renunciation of hereditary rights. c. The power to administer property. d. Sale of immovable property. e. None of the above. 43. Which of the following instruments is not subject to reformation? a. Simple donations inter vivos wherein no condition is imposed. b. Wills. c. When the real agreement is void. d. All of the above. 44. Which is the most defective contract? a. Rescissible contract. b. Voidable contract. c. Unenforceable contract. d. Void contract. 45. Which of the following may not be made the object of a contract? a. All things which are not outside the commerce of men. b. All rights which are transmissible. c. All services which are not contrary to law. d. Impossible things or services. e. None of the above. 46. An obligation which cannot be enforced by court action, but which is binding on the party who makes it in conscience and according to natural justice is called: a. Civil obligation. b. Natural obligation. c. Pure obligation. d. Simple obligation. 47. D is indebted to C in the sum of P10,000. For the purposes of avoiding the claims of C, D donated all his properties worth the same amount to X. a. The contract is absolutely simulated. b. The contract is rescissible. c. The contract is merely voidable. d. The contract is void.
C
E. a, b, c requires a public instrument only for CONVENIENCE, d under the statute of frauds requires an agreement to sell immoveable property, for all we know, the sale may have already been executed D
D
D
D
B
C. badges of fraud B rescissible if C has no other means?
48. In three of the following, the transaction is void. Which is the exception? a. Oral contract of partnership the capital is P3,000 or more. b. Contracts in writing contemplating impossible services. c. Authority of the agent orally made in sale of immovable property. d. Oral contract of partnership whenever immovable property is contributed. 49. This kind of defective contract refers to that contract which is validly agreed upon because all the essential elements exist, but courts can nullify it when there is damage or prejudice to one of the parties or to a third person. Its enforcement would cause injustice by reason of some external facts. a. Voidable contract. b. Void or Inexistent Contract. c. Rescissible Contract. d. Unenforceable Contract. 50. S and B orally agreed that S would sell and B would buy S’s radio for P400, two years from the date of the agreement. At the end of the twoyear period, S refused to deliver the radio although B was willing to pay. a. B can compel S to deliver because B is willing to pay the price. b. The contract falls under the Statue of Frauds, therefore unenforceable. c. No Statue of Frauds because the price is less than P500. d. The object is movable, oral contract is enforceable. 51. A sold his land to B. Although the sale was made orally, B still paid A the agreed price. Later, B wanted to have the sale registered but he needed a public instrument. What can B do? a. B may compel A to execute the public instrument because the contract is valid. b. B cannot compel A to return the price because the contract is not enforceable. c. B may only sue A to return the price because no one may enrich himself at the expense of another. d. B may occupy and use A’s land as a buyer in good faith. 52. Contract which has no effect at all and cannot be ratified is a/an: a. Unenforceable contract. b. Void contract. c. Voidable. d. All of them. 53. If mistake, fraud, inequitable conduct, or accident has prevented a meeting of the minds of the parties to contract, the proper remedy is: a. Sue for specific performance of the contract. b. Ratify the contract. c. Annulment of the contract. d. Reformation of the contract.
A
C
B
A
B
C
54. S, a minor, owns a specific property valued at A P50,000. B, capacitated, by means of fraud induced S to sell his property to him (B) for P100,000 which S did so. The contract is in writing. a. The contract is binding from the start. b. The contract remains unenforceable because if falls under the Statue of Frauds. c. The contract is rescissible because the ward suffered lesion by more than onefourth of the value. d. The contract is void. 55. In order that a stipulation in favor of a third D person in a contract would be valid and binding upon parties thereto, three of the requisites are mentioned in the following enumeration. Which among them is not requisite? a. There must be a stipulation in favor of a third person. b. The contracting parties must have clearly and deliberately conferred a favor upon that third person. c. The third person communicated his acceptance to the obligor before its revocation. d. That there must be an existing agency between either of the contracting parties and the third person. 56.D is indebted to C for P10,000. For the A purpose of defrauding C, D sold his only parcel of land to X valued at P10,000. X had no knowledge of the intention of D. a. The contract between D and X is binding. b. The contract is voidable because D is in bad faith. c. The right of C is to rescind the contract because the transaction is fraudulent. d. The contract between D and X is rescissible. 57. D owes C P500. However, C’s right has already D prescribed. Notwithstanding the knowledge of this fact, D paid the amount. Realizing this mistake, D wants to recover the amount he paid. a. D can be made to recover on ground of mistake. b. D can be made to recover on the ground that his obligation is not legally enforceable. c. D can be made to recover because this will enrich C at the expense of D. d. D cannot recover. 58. A obtained a loan from B for P1,500 with interest C at 14% per annum, the payment of which was secured by guarantor C. After maturity of the loan, D without the knowledge of A paid B, P1,400 and thereupon B signed a receipt and gave it to D, of this tenor. “Received from D P1,400 in full payment of A’s obligation in may favor”. (Sgd.) B.
a. D can recover from A P1,500 because the whole obligation of A to B has been extinguished. b. D can recover from A P1,500 because the balance of P100 is considered extinguished by partial remission. c. D can recover from A P1,400 because that was presumably the extent to which A was benefited. d. D cannot recover from A because he paid without the knowledge of A. 59. The duty not to recover what has voluntarily A been paid although payment was no longer required. a. Natural obligation b. Moral obligation c. Civil obligation d. None of the above. 60. Contract with a false cause is B a. Voidable. b. Void. c. Unenforceable. d. All of the above. 61. Which of the following contracts is unenforceable D unless ratified? a. Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers. b. Contracts infringing the Statute of Frauds. c. Those where both parties are incapable of giving consent to a contract. d. All of the above 62. Which of the following contracts is required to be E in writing to be enforceable? a. An agreement that by its terms is not to be performed within a year from the making thereof. b. A special promise to answer for the debt, default or miscarriage of another. c. An agreement made is consideration of marriage, other than a mutual promise to marry. d. Sales of goods, chattels or things in action at a price not less than P500. e. All of the above. 63. Example no. 1: D obliged himself to give C B P10,000. However, the day before the obligation falls due, D’s apartment was completely gutted by accidental fire. There is no question that the money was also razed by fire. The obligation of D is totally extinguished because of fortuitous event. Example no. 2: D obliged himself to pay C P10,000 with 6% interest. On the due date, D tendered P10,000 with a promise to pay the P600 interest the day after. If C refused to accept, he can be
compelled to do so because the obligation is divisible. a. Both are true. b. Both are false. c. No. 1 is true; No. 2 is false. d. No. 1 is false; No. 2 is true. 64.Example no. 1: D for P10,000 mortgaged his land to C. C, instead of a deed of mortgage, executed a deed of sale and let D sign his name. D’s right to go to court and ask for annulment. Example no. 2: D obliged himself to give object no. 1 or object no. 2 to C. In here, both objects are due. a. Both are true. b. Both are false. c. No. 1 is true; No. 2 is false. d. No. 1 is false; No. 2 is true. 65.Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. Which of the following constitutes a definite offer? a. An offer made through an agent. b. Business advertisement of things for sale. c. Advertisement for bidders. d. All of the above. 66. On July 15, 2012, X entered into a contract with Y. On February 10, 2013, X discovered that fraud was committed at the time he entered into the contract, a fraud that vitiated his consent. The action for annulment shall be brought: a. Within three years from the time of the fraud. b. Within four years from February 10, 2013. c. Within four years from he time A entered into the contract. d. On February 10, 2013. 67. S was forced by X to sign a contract with B for the sale of a specific property for P10,000. C, a creditor of S, is prejudiced by the contract. What can S do? a. S may ask for annulment of the contract. b. S may ask for rescission of the contract. c. S may ask C to declare the contract avoided. d. S may ask for reformation of the contract. 68. Example no. 1: The husband, by intimidation, was able to obtain the consent of his wife, with regard to the sale of a piece of land belonging to the wife for P1 million. The contract is voidable because there was intimidation. Example No. 2: In the above example, the right of the wife is to go to court and file a motion for annulment within four(4) years from the time intimidation ceased.
B
D
B
A C may ask for the annulment of the contract, because his rights are prejudiced, even though he is not principally or subsidiarily bound by the contract
B, the sale between the husband and the wife is VOID
a. Both are true. b. Both are false. c. No. 1 is true; No. 2 is false. d. No. 1 is false; No.2 is true. 69. A contract where both parties are incapable of giving consent is: a. Rescissible. b. Voidable. c. Unenforceable. d. Void. e. None of the above. 70. Three of the following contracts are void. Which is the exception? a. Those whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy. b. Those which are absolutely simulated or fictitious. c. Those which cause or object did not exist at the time of the transaction. d. Those where both parties are incapable of giving consent to a contract. 71. Which of the following contracts is void? a. Those which 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 expressly prohibited or declared void by law. e. All of the above. 72. S makes an offer to B on January 1, 2012. B makes known his acceptance through a letter sent on January 2, and received by S on January 10. Meantime, on January 5, S becomes insane. a. The contract is voidable because one party is insane. b. There is already a meeting of minds, the contract is perfected. c. The contract is not binding because there is no meeting of minds. d. None of the above. 73. In the preceding number, if S is perfectly sane but only an unemancipated minor at the time the acceptance is communicated to him then, a. There is no meeting of minds between the parties, unless ratified by the guardian of S. b. The contract is not binding because one party is incapacitated. c. The contract is binding between the parties. d. None of the above. 74. D owes C P10,000. But the debt soon prescribed. Later X, against the consent of D, pays C P10,000. a. X can recover from D P10,000 because the latter was enriched at the expense of X.
C
D
E
C
C
C, X cannot recover from D, but he can recover from C. Undue payment. If D pays C, however, D has no right to recover
b. X has no right. c. X cannot recover from D what he pays C. d. Both D and C are liable to X. 75. In a contract of sale executed by S and B, it appears S sold his motor vehicle to B and B bought it for P10,000. It turned out however, S has three motor vehicles. Galant valued at P80,000: Hi-Ace van valued at P70,000; and a Jeep valued at P60,000. Which of the following is correct? a. The contract shall be reformed because there was mistake. b. The parties can ask for interpretation because the word motor vehicle is ambiguous. c. The parties can ask for annulment of the contract. d. There is no contract. 76. Which is the least defective contract? a. Rescissible contract. b. Voidable contract. c. Unenforceable contract. d. Void contract. 77. Which of the following contract is not rescissible? a. Those which are entered into by guardians whenever the wards whom they represent suffer a lesion of more than ¼ of the value of the object of the contract. b. Those executed in representation of an absentee, if the latter suffer a lesion of more than ¼ of the value of the object of the contract. c. Those where one of the parties is incapable of giving consent to a contract. d. Those undertaken in fraud of creditors when the latter cannot in any other manner collect the claims due them. e. 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. 78. X Company bought out a competitor, Y, with a stipulation that Y should thereafter not engage in any business in the Philippines without the consent of X Company. a. The stipulation is not valid because the parties, as a rule, have no absolute freedom to stipulate terms and conditions in a contract. b. The stipulation is not valid because this is against public policy. c. The stipulation is valid, only it will create a monopoly in trade. d. The stipulation if ratified is valid. 79. Reluctantly and against her good sense and judgment, Rosemarie entered into a contract for the delivery of 5 tables to Corazon for a price of P15,000. Contact is: a. void
D. There is no meeting of the minds here
A
C
B
D
b. Voidable c. Unenforceable d. Valid 80. Which of the following contact is enforceable A even if not reduced in writing? a. Contract executed by one of the parties in a contract. b. Representation as to the credit of a third person. c. Lease of immovable for a period longer that one year d. Agreement for the sale of immovable property. 81. Which of the following contract is not valid? D a. Mutual promise to marry entered into orally. b. Sale of immovable property orally entered into. c. One of the parties in a contract is incapable of giving consent. d. None of the above.
