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susmessQuiz - Law on contracts -~ PART I

er1 a contract purporting to be sale shall be constnued as mortgage.

ny- . . ,

First statement is true; second is false

sb

I' D, fearing that his creditor C, would go after his only pared of land no satisfy

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A

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A

Sale of chattels orally entered into for a price not less than five hundred pesos-

c B could accomplish his criminal. Decide:

payment he made to B because nt wasa void contract which does

b.

c. the crime was not

1. Statements:In case of doubt .In annulment of contracts, there 5ha1|vig be mutual restitution of both parties thereof.a. First statement is false, second is true c. Both are trueb. Both are false d.

2. Statements: .

Just luke voidable and unenforceable contracts, rescissible contracts may also be ratified.In case of fraud or mistake, the action for annulment must be made within four years from

the commission of the vice of consent.a. Both statements are true c. First is tnue, second is falseb. Both are false d. First is false; second is true

3. his claim for

payment of D's debt, sold his said land to X who did not know of D's intention. Decide:

a. C can ask for annulment of the sale as this is voidable contract.

b. c may ask for damages against X since he was damaged by the sale.c. C can file an action for rescission of the sale.

. d. c cannot ask for the rescission of the sale.

4. Mutual error as to the legal affed of an agree when the purpose of the parties is frustrated

may result in the reformation of the instrument. .

Mutual mistake of the panies and the instrument does not express the true agreement willmake the contract voidable.a. Both statements are false c. First is true, second is false.b. Both are true. d. First is false; second is true.

5. A without authority from B sold the latter's car in the name of the latter. The contract is

therefore:a. Rescissible c. unenforceableb. voiaaue d. void

6. A threatened B with an administrative charge for immorality if the latter does not marry herbecause she is already pregnant with their child. Fearing that she may do so, B married her.The contract of marriage is therefore voidable because of threat. A simple mistake of

account may give rise to the annulment of the contract because of mistake.a. First statement is false; second is true c. Both are true

b. Both are false d. First is true; second is false

7. A appointed B to sell his land:If the authority of B is oral and the sale is in public instrument, the sale is void.-If the authority of B is in writing and the sale is oral, the contract is unenforceable.

a. The first statement is false, c. Both are tnue

the second is true d. Both are falseb. The first is true; second is false

8. In threeof the following the contract is cleansed of its defect bv ratification. which is not so

fatlfleda. Contract where the creditor was damaged by the act of the debtor intended to defraud

him.b. Contract entered into by a person incapable of giving consent.

c.d. Lease of real property for more than one var orally entered into.

9. A gave B One Million pesos for the latter to kill C. Beforeintent to kill c, A changed his mind and demanded the return of the money from B.

a. A cannot recover the

not allow recovery by the guilty party.

A cannot recover the money because the contract is unenforceable.A can recover the money although the contract is void since

committed.No recovery and both A and B will ,prosecuted for their crime.d.

A


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o

Because A wants to sell has land to B but the latter does not want to buy the same, A forced

B to buy his land. The contract:

a. Not binding upon B since his consent waf, vmated .

b. It is unenforceable as against B but not against A.c. May be ratified expressly Or tacitly by A.

d. It is valid, binding and enforceable.

D borrowed a sum of money from C with G as guarantor. The loan is in wrrtln9 but the

guaranty is oral. D failed to pay C. who now is demandln9 payment from G? G be

compelled to nav'a. yes, because he is the guarantor obliged to pay in case the debtor defaults.

b. no, because the guaranty is void having been orally made.

c. No, because the guaranty is unenforceable against G, lt being oral.d. Yes, because the guaranty is enforceable, writing not needed.

YJ 12. January 2002.

the balance

10.

11. Can

A and B agreed on February 3, 2000 tlnat B wrl| construct the house of in rn

The contrad was orally entered into. B received a down payment from w1

payable afcer completion of Lhe houae. The contract. as:

a. voudabte because it not m pubhr instrument.b. Enforceable even If not in wntmq, havmg been raufued. .

. . n earc. unenforceable because lt rs not an wrrtnng and yet performance there ns after o e y

from perfectron .Void because rt as not in writmg as required bv law.d.

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13. A sold to B a fake Rolex watch on January 3, 2001. On January 13, 2001, 8 discovered that

the watch he bought from A waa an rmrtatron. The law provsdes that he can annul the sateas a vordable contract withm four years. Prescnotaon stans from:

a. January 3, 20o1 when the sale was perfectedb. The time of dehvery of the watch to B.c. The trme they fust talked about the sale of the watch.

d. January 13, 2001 when the fraud was drscovered by B.

C v14. A and B agreed on a contract of pledge. However, they entered unto a contract of mortgage

in the honest belief that the mortgage and oledge are the same. The snstrument may bereformed:a. No, the document cannot be reformed slnce the contract ls vold.b. no, it cannot be changed. They are bound by the document which speaks for itself,

c. yes, it can be reformed because it does not express the true agreement of the partues.d. Not, lt cannot be reformed because there was no meeting of mmds between the parties

and the remedy is annulment of contract.

D

I)

D

15. A and B entered into a contract of mortgage. However, as written the document states it is

a contract of sale with right of repurchase, the error due to the fault of the clerk/typist.

Hence'a. The contrad of sale must be annulled since it is voidable,

b. The instrument has to be enforced as is for it is the proof of the agreement between the

parties. ,

c. Because of the negligence of the parties ln signing without first reading the instrument,

they are bound by the contents of the same.d. The instrument may be reformed because lt does not express the true agreement of the

parties. g

16. S sold to B his parcel of land wonh one million pesos for only half a million pesos. Alter the

sale and realizing his damage, S is now seeking to set aside the sale. Decide:

a. The contract is voidable because of mistake of the seller.

b. It is rescissible because of the.lesi;mor damage suffered by S.

c. S has the right for an increase in the price to prevent unjust enrichment on the part of B.d. The sale is valid, binding and enforceable because as a rule lesion or inadequacy o cause

or price in a sale dow not invalidate a contract.

17. If the cause is not stated in the contract, lt is presumed that lt does not exist.

Lesion or inadequacy of Cause as a rule invalidates a contract.a. First statement is false, second is true.

b. First is true, second is false.

c. Both are true.

d. Both are false.


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a

inB married A's daughter against his will.

c.

d.

C/ 21. The following are characteristics of a void contract.

b.c.

d.

B

18. 8 borrowed a sum f.M0"Y from C with a cenain rate of interest. C now wants to increasedolngat8>"of interest without the consent of D. What principle m contracts prohibits C from

a. Autonomy of contracts d. Consensuality of contracts

b. Relativity of contracts e. Obligatory force and compliance inc. Mutuallty of contracts ood faith

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19. Three of the following contracts must be in writng to be valid. Which is the exception?

a. Contract of partnership where imrnovables are contributed.b. Contract of agency to sell the land of the principal.


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c.

d.

Flr'st as corred, second is uncorrect.

Second is corred, flrst as mcorrect.

ff 28.

The actuon for annulment of contrads shall be extunqulshed when the thang whlch ls 113object thereof ns lost thfougll fortultous event or faaud or fault of the Offff-o" who has a rug

to lnstltute the proceedlngs.a. Both statements are mcorrect.b. Both are correct.

Ratlflcation of a vo1dable or unenforceable contract must be made wlthln the prescruptwe

penod provlded for by the law. . _ . .Ratnncation cleanses a vonadable or unenforceable contract from all ILS defects from the

moment at was constitutw.a. Flrst statement ls false, second ns true.

b. Second is false, first if. true.

c. Both are false.

d. Both are true.

D 29. A sent B a Ietter wherem the former offered to sell Ms car to the latter for Php 1m. BQngnified h1s untention that he may huy the same. In A's letter, he gave B two weeks toraise the amount. After one week A :assed the pr|cE Lo php 1.5 M. Can B compel A to

accept the Php 1M frrst offered by A and deliver to him the car'

a. yes, smce there was already offer and acceptance

b. yes, because A cannot chanqe h1=; offer wIthout the consent of B.c. yes, becaune A cannot w1thdraw the offer wnhm uwo weeks as he as under estoppel.

d. No, because there was no apceptzance vet of the offer.

5, 30. A sold a parcel of iand to B by word of mouth and dehvered to the latter the TransferCertmcate of Tille of the land Can B compf~| A to execute the deed of sale of the land'

a.

b.

c.

d.

B cannot compel A to execute the deed of sale as the sale belng oral ss unenforceable.B cannot compel A because the sale ls vold be1nq oral.B can compel A because the COl'1!l'8(`1 ls enforceable due to the delwery of the TCT to

hum.

B can compel A because the sale is merely voldable and therefore enforceable, binding

until annulled;

5 31. Statement no. 1. As a rule contracts take effect only between the parties.

Statement no. 2. mere 1ncudentalbenezf1t of Me lhmi person vs enough for

stnpulationpou/ az/tn to exnst provided he accepts the same.

a.b.

c.

d.

9 32.

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a.

b.

c.

d.

. 33. Statement no. 1. i cg~*;;g8'f*\~f cause are vondabie because cause is presumed to exist

Statement no. 2. Offer must be atrsolute and acceptance must be cevtam before can there

be meeting of the mmds of panies

a.

b.

C.

d.

Flrst statement is false, whlle the second is true.

Both statements are true.Both statements are false

Flrst statement ns true while the second is false.

D 34. Statement no. 1. Contract of iease of a parcel of land forwntten otherwuse unenf9rceab!e,

Statement no. 2. Contract of sale of a parcel of 1 .. and must he n ubl l . r n othecw seunenforceable. I D sc nst ume r |

a term of one year must be

Flrst statement vs true, second statement ns true

Furst statement :S true whlle the second is false

Both statements are falseFlrst statement ls false whlle the second ns true

Three of the followmg may oblectf, of contracts, except:

Those thmgs wlthln the commerce of man.

Services whlch are not contrary to law, morals, good customs.

Intransm1sslble rights.

a.

b.

c.

d.

First statement s false while the second ls true.Both statements are true

Fvrst statement is true whsle the second ls false.

Both statements are false


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3 35.

A ss;

D 37.

vc.

d.

perfedion by mere consent

Blndmg on third persons

cf/

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A

3

0

D

D

D

A contract wh ' .ereln both contracbng pan' . ble of ivin consent a d et tifed

bv the guardian of either of the parties us: les are incapa Q Q n v ra l

a. Rescssbleb. Voidablec. Unenforceabled. VoidThree of the following contracts are void. which one is not'

a. Oral contract of partnership wherein more than php3,000.o0 has been contributed bv thepartners. i

b. Agent given oral authority to seil the land of the principal.

c. partnership contracts in private instrument wherein immovables have been contributed.

d. Oral contract of limited pannership.which one of the following constitutes fraud?

a. Misrepresentation made not in bad faith;b. misrepresentation by a third person and both panies mistaken.

c. Usual exaggerations in trade or dealer's/sale's talk .d. Failure to dsclose facts when there is a duty to reveal them as when the wma are

bounded by confidential rdations.

38. These are principles in contracts. Which is not?

a. Freedom or autonomy of contractsb. Relativity of contracts

39. which of the following constitutes an offer?

a. Business advertisements of things for sale.

b. Advertisements for biddelsc. An offer made through an agent . .d. Before acceptance is conveyed, either of the parties dies, civilly interdlcted, becomes

insane or insolvent

40. Statement no. 1. There is acceptance of the offer only after it has come to the knowledge of

the offerer.statement no. 2. Leslon or inadequacy of cause shall as a mle make a contract defective.

a. Both statements are true c. Both statements are falseb. Second statement is true; first is false d. First statement is true; second is false

41. Statement no. 1. If the cause is not stared in the contract it is presumed that it does not

exist and therefore the contract is void.

Statement no. 2. In order that a contract may be voidable, there must be damage.a. Both statements are false c. First statement is false, second is true

b. Both statements are true d. First statement is true; second is false

42. The action to annul a voidable contract is extinguished by:a. Novation c. Resclssion

b. Ratifiation d. Estoppel

43. Which of the following contracts is unenforceable?

a. One of the contracting parties is incapable of giving consent.

b. Contract of lease of a car for two years orally entered into.

c. Oral contract of sale of land.d. mortgage contract in private instrument.

44. Which of the following contracts is not void ab /hit/D?

a. Those whose object is outside the commer.

b. Those whose object did not exist at the time of transaction.

c. Those which contemplate an impossible sewe.

d. Those undertaken in fraud of creditors.

45. Contract which cannot be sued upon unless ratitied, thus it as if tney have no e1Tect yet:

a. Voidable c. Void

b. Resclssble d. Unenforceable /m248/fzk

Oral contract of sale of an immovable

authority by the principal.

Oral agreement to answer all the expenses for the wedding reception if A marries B.

46. Which of the following contracts is valid?

a. Oral contract of agency giving authority to an agent no sen the land of the principal.

b.

c. entered into bV an agent who was given oral.c.


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47.

f.

fl.

49.

50.

A sod to 8 a genome bottle of Fundador branov. rtowwm, utiorr rl8iw4:!'/ W" forrrmsubstntuled a fake, B now wants m annul the we. tm we;

a. The contract 1'; vold dt/ /mnothe-r|>fore at (au rf- annmierlb. The contract can be annulled SINFS sl 14 vfrrriabw r)1nfN fr-md.

c. The contract cannot be anmmed became ri 19 onlym;,:|y,|.., hawd. There 19 do/o /nc/dentsrherefnm rt ran hw mmnwr

G was appornted as the guardran of M who ownr. A faarrrt of land vatued ar PYTQIM, m wid

the land only for Php. 7M to B. The contract rs df'fevit~4~ bemu*r .'a. Unenforceable ~/mdabte

b. Res(:rs;sit>le _/0|/3

S was lntimidated by B to sell to the latter Mf,parrf-BUf land at a wr/ law ufwf (wr Me

credutor of S was thus damaged srnce theforrnernfa nOmmf mrfafi'-of foikafifrrg "ff" S.The remedy of S:

a. Rescrssron c.

b. Annulrnent d

which of the followmg contrads mum be rn wntmg ro bf- enforcaab!:7

a. Acts and contract for the r.re~auon, tran'-,mrssfon, rrvxirfrfown, mr,wf>hrrern4 of ful

rlghL3.

The cessron, repudoatron, renuncrataon of heredrtv fK]ht5s.

Contract of guaranty

Contract of partnershrp

51.

C.

52~

ruer/od lr/ the latter cm January 2,

2001. On January 4, 2001 B sell! a letter of acceptance ny mais, on Jan-:ary 3, 2001 9 w4

ln th1=, case:a. There was a perfeded sale because of the acceptance d the offer by 8 bdore he H86

knowledge of its withdrawal by S.b. There was perfected Qale because S was estouped from withdrawing ms offer m1899 B

had knowledge thereof before acceptance.

No sale took place because before accentance was conveyed, the offer had been

withdrawn.The offer was ineffective for lack of certainty as to the object.

Statements:An offer made by the principal is accepted lrom the time accevwnce is conveyed W him or

his agent.The object of a contract may be future things rncludrng future inheritance.a. Both statemente are true. h Weconrl rf, falw, nm is true.

a. Both are false. c. First is fahe, 411006 is true,

0

Therefore

A contract wh~|ch cs the dlr%t resun of a vord comraci 6 vornaole

If the object of the contract dad not exnst a1 the mmm hf the \fan 0on t 6 m.

rms may include sale future thmgs,a, First 9 true, second as false. Both are favf.

b. Furst 19 false, second rs lrue. h are true,c.

d.

D54. rw dhvry from A ami no

51 If the words of the contract are clear and Ieave no doubt oninterpretation of contracts may be proper.incase of gratustous contracts, doubts shall be resolved in favor

interest.a. The Nrst statement is false, second us true

b. The nrst statement is true, second is false

c. Both are lrued. Both are false

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Have 1{ fjerflmefi bv the mlm ae vfxd

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BUSINESS LAW

Quit - Law on Contracts - PART nAtty. M.S. Bonafe J

A

A

d. All of the abovee. none of the above

w*- e Cofftfact lacks one of the essentiai elements the contract is:

D. voidable

c, Resc1ssibie

2. The act or means by virtue Of which emcacy is given to a contract, which suffers from a vice ofcurahle nuiiity.

a. Ratificationb. Resolution

c. Rescission

is a remedy in 0uity by means of which a written instrument is made or constructed so as toexpress or conform to the real intention of the parties when some error or mistake has been

committed.

a. Ratifi8{i0n

b. Reformation

c, Rescission

d. All of the above

a. none of the above

p,

D 4.

1.

d. All of the abovee. none of the above

3.

Although contracts bind only contracting pams, their assigns and heirs, In the following instances

thlrd persons are bound thereby:

a. In case of otlpulation pour autrui fmb. In contracts creating real rights /J/2c. In contracts lntended to defraud the creditors /6/8

d. All of the above

none Of the above

0 5, A qualuned acceptance constitutes:a. An absolute acceptance

U. A meeting af the minds between the partiesc. cbunter offerd. AN of the above

e. None of the above

I

D 6. An offer becomes ineffective if, before acceptance is conveyed, either panies becomes: 162%a. Civeliy interdicted d. An of the above

b. Insane e. None of the above

c. Insoivent

p 7. A contract where consent is given through mistake, violence or intimidation is:a. Void d..b. Unenforceable e. None of the above

c. Rcscis5ibie

Vo|.4ab1/

A s,

A9, Contracvs entered into in a state of drunkenness or during hypnotic spell is:

a. v0|dab4e d. Rescissible

b, Vmd e. none of the abovec. unenforceable

1w, An offer made through an agent is accepted from the time acceptance is communicated to-

a. d. 'e. none of the above

The span of time wherein a person is in possession, temporarily, of all his mental faculties-a. Lucid lnlewal a. Reglementary period '

b. Optlon penod e. none of the abovec. prescrlptlve period

The principalb, The agentc. sloth the prlnclpal and the aqenr

The household member of the prindpal


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3 11. The essential or impeliing reason why the parties enter int8 a contract:a. Motsve d. Au of the above

b. cause e. None of the above

c. protit

9 12. The statement of a false cause in contracts shall render the contracts:a. voidable d. Rescssible

b. Vocd e. None of the above

c. unenforceable

A 13. If mistake, fraud or acczdent has prevented a meeting of the minds of the pames, the nrooerremedy IS:

a. Annulment

b. Reformahonc. Rescission

d. ResoutiQn

e. none of the above

Q14. The following contracts are valid:

a. Rescissible

b. Annullablec. unenforceable

d. A!! of the above


0 15. a contract entered into in the name of another by one who has no authority or legalrepresentation is:

a. vom

b. Rescissible

c. Annullable

d. unenforceablee. none of the above

4916. Business advertisements of the things for sale are:

a. Dennite offerb. Invitation to make an offer

c. Counter offer

d. Acceptance of the offere. none of the above

.P 17. The following is an examde of a real contract:a. Contract of pledge r b. Contract of oeposztc. Contract of commodatum

d. An of the abovee. none of the above

|

,4 18./4 In case of divnsible contract, if the iitegal terms can be separated from the legal ones, that thelatter can be enforced.

B. The defense of illegality of contracts as available to third persons whose interest are

affected.

direwy

a.

b.

Both are true

Both are false

C.

d.

First iS false.

Second is false

b.

c.

d./

8 19. A and B entered into an oral sale of the former's car for PIM which amount has been credited to

his bank account although the car has not yet been delivered to the latter. can B compel A tO

execute the deed of sale of the car?a. no, because the sale is unenforceable.b. yes, because it is enforceable.c. yes, if A used the money paid to him

d. no, because the sale is void.

(L 20. on January 20, 2002 A and B agreed verbally to fomw a partnership on January 25, 2004.

a. The contract is vod because future nr0perw can't be contributed to a universalpannership of all present properly-It is voidable if the panies marry each other before they form the partner5hip.unenforceable because it is not in writing.

Void because there is no public instrument of their agreement. "

21. A orally leased to B his car for a term of2 years. B has not taken possemon Of the car and A has

not received any rental. The contract is;

a. unenforceable c.b. Valid and binding u.

Rescissiblevoidable


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A 22. Based on the preceding number, if the objed were a house, the contract shall be:a. Unenforceabre c. Rescsssibte

b. Valid and binding d. voidable

A The contract is:C.

d.

Rescissvble

voidable

?> 24{@'~

MMI

23. If the object were a parcel of land.

a. Unenforceable

b. Valid and binding .

. 4 1 ' -1' ..~~ -L .ff I l8ei1g!'fhef888r4s'616

thereof the latter was able to tlnish high school. The contract is:

a. void c. Rescisssble

b. Unenforceable d. voidable

un the name of the latter and by virtue

3 25. wthout authority from A, B sold in B's name the land of A to X who was in good faith. Thecontract is:a. void because B was not the owner at the tme of the perfection of the sale.

b. Unenforceable, because B had no authority to sell A's land.

c. voidable, because of the fraud committed by B against A.

d. Valid sale provided 8 is owner upon delivery.

926. Based on the preceding no., rf the sale m A's name, the contract is:

a. void, because B was not the owner at the time of the perfection of the sale.

b. unenforceable, because B had no authority to sell A's land.

c. voidable, because of the fraud committed by B agasnst A.

d. valid sale provided B is owner upon dehvery.

F 27. If the doubts are cast upon the principal object of the contract in such a way that it canna beknown what may have been the intention or will of the panies. The contract shall be:

a. voidable due to lack of meeting of minds.

b. voidc. Interpreted for there is doubt.

d. Reformed to express the true intention of the parta.

14 28. A offered 20 Tamiya cars to B for P1,000.00 each. B answered by letter that he was willing topurchase not 20 but 30 pieces at said price of P1,000.00 each. ls the contract perfected?a. No, because there is qualined acceptance which constitutes an offer by the buyer.

b. yes, there is perfected sale because the number of pieces is only incidental matter in the sale.

c. yes, because the letter of acceptance was already sent by the offeree.

d. No, because there is no offer yet of A that is certain.

CD 29. Statements:

If one of the parties at the time of making the ff r. o e or acceptance wa I d msacontract is v0dable. s a rea y ne the

D

If before the acceptance is conveyed to the offerer, eithe of th mes .

contract isvo id , that is, the offer is noneffective. r e na nec insane, me

a. Both statements are incorrect. c. First is correct, second is inc

b. Both are correct. d. Saond is correct, mst is incorrect.

30. A, a minor sold to B a parcel of land fe9istered in his name misrepresenung to the latter that he

15 me

Having been mlsled as to the true age of A, B entered into the contract.is of legal age.

contract voldable

a. Its 0voadable because the seller is a person incapable of giving consent to a contract being a

b. It us voldable because of mistake on the pan of B he he

It is not voidable but rather vold because of lack :Yr conse T38" `E28' A "ps of legal age.IS ON y 3 Mlnof wlthout

d. It is not voidable because of the fraud ml .good falth. com treo bv the mlnor seller and the buyer being in

c.

p 31.bought the shares of stocks ar another

that negotiations were in progress no

A, a director of X

stockholder withoutenhance the value of the shares.

a.

b.

corporation, through an agent

reveahng to the seller stockholderThe sale ns defective contract being |

Vo`d,v0.


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Rescissable because of the damaqe eeuffered by the seller.

32. 8 the property he (A) expected to receive from his

It is completely valid contract because the seller is compulsory heir.

It is vcvidable sale If he fails to receave the property he expected to recesve from his father.

.A 33.

c.d. voldable due to the fraud concealment by A agalnst a fellow stockholder.

Whlll? his father was _.ull alive, A sold to

father. Is the contract defectlve?

a.b. It ls valld for there can be sale of future thlngs and what A sold ls future nr0pefw.

C.

d. It ls void for future inheritance cannot be sold. .A promlsed to glve B a car as reward after B has killed c. Later, after the kllllng, the contract was

changed to a lease of a bug house for a celtaln penod.

The contract of lease ls:a. Voldb. Unenforceable

c.

d.

voidabie

Rescussible

P 34. S orally sold to B a parcel of land for which the latter paid P1M. B now wants to register the saleso that he can have a Transfer Certificate of Title in his name. Decide. .a. S cannot be compelled to execute the public document of sale because the sale Is

unenforceable.b. S can be compelled to execute the public document of sale because the sale is enforceable.

c. The sale is void and therefore cannot be registered . .d. S cannot be compelled to execute the public document of sale because the sale is voidable.

C1-'

35. S orally leased to R his parcel of land for a term of two years. The contract is:

a. Resclsslble b. voldable c. Unenforceable d. Void

F fboth bemg refused.

>

9

f

36. A verbal agreement was made betwee A nd B whereby A agreed to sell and B agreed to buy A's

farm for P100,000.00. The price wasiizif Possession was not given nor was the deed delivered,

The contract ls:

a. Rescissible b. voldable c. unenforceable d. Void

37. A orally leased to B his car fro two years. No delivery of the car was made and no payment of the

rentals was given. A refuses to pay the rentals in advance as agreed upon.a. A may rightfully refuse because the contract ls unenforceable.b. A cannot refuse because the contract ls enforceable.

c. B cannot compel A to do something against the latter's will.

d. The contract ls reciprocal and therefore A cannot be compelled to pay because there was no

delivery of the car.

38. A borrowed money from B with c as guarantor. The contract of loan of P1M was not in writingwhile the guaranty was written. B now is demanding payment from c because A failed to pay. Is

C liable?a. C is liable because the guaranty is enforceable although the loan is void it being oral.

b. c is not liable because the accessory contract of guaranty ls void since the principal contract

of loan is void.c. c is liable because the guaranty ls enforceable.

d. c is not liable because the contract of loan is in amount exceeding P500.00 which must be in

writing to be enforceable.

39. A was having his house repaired bv B, who needed certain materials. So A told the storeowner,'Give B the materials. I shall be responsible. I shall stand good.' This was orally entered into.

a. The contract is unenforceable because A made an oral agreement to answer for the default oranother, that is, B.

b. The contract is enforceable because A did not make a special promise to.answer for the

default of another person .

c. The contract shall be enforceable if there is ratification by A.

u.. The contract shall be enforceable if it has been executed.

il 40. A and B mutually promised to marry each other. The promise being verbal and without witnesssto the promise, A did not marry B. B is now suing A for damages. Decide:

b, The contract is unenforceable, hence, A is not liable.

c. The contract is unenforceable because mutual promlse to marry is covered by the statute bf

Frauds.A is liable for damages even if the contract is unenforceable.

A may be liable for damages because mutual promise to marry is not covered by the Statute

of Frauds.

d.

e.


11/17

1> A and B, neighbors,

A week later B begun to erect a garage in violation or the agreement. A

The contract is u f Decide.making there0gnen orceable because It us not to be performed within one year from the

b

c. Ancontadve a third person to undo what has been done by B in violation of his obligation

o.d. A has the right to complain and enforce the contract because it is enforceable.

42. A and B orally agreed that A would sell and B would buy A's radio for P200.00 three years from

the date of the agreement.

although B was willing to pay. Is A bound to deliver the radio sold"a. A is obliged to deliver what he sold since it was an enforceable sale.b. A is obliged to deliver if B is ready to pay the price.c. A is not bound to ddiver because the sale ls unenforceable.

d. A is not bound because the sale is void.

orally agreed that from that day,tall after three years. ,complavns and B sets up the defense of the contract bemg unenforceable

a.

and it is oral. . . . . rd do.. B can be compelled to demolish the fence because he falled ln Ms obllgaton not

44

Q, 44.

U

41.

B would not erect a garage on his progeny

OAt the end of the three years, A refused to hand over the radio

43. A forced B to sei! to him (A) his ring. B sued for annulment, but A had already lost the ring thru

fortuitous event. Is A name for the loss?a. A as liable for the loss even it was due to fortuitous event because of his bad faith.

b. A is not liable because the loss was without his fault.c. A is liable to pay damages if he cannot replace the ring.

d. A is not liable because no one shall be responsible for the loss of a thing due to fortuitous

event.

A was forced by B to sign a contract. c, a creditor of A wants to annul the contract. Is c allowed

by law to do SQ?

a. no, because a third person cannot assail a void contract.b. yes, because the contract is voidable and C is damaged.

c. No, because a third person cannot assail a voidable contract.d. yes, a third person can annul a rescisslble contract.

45. To defraud his creditors, A sold his real property to B. B now seelG to register the sale. X, acreditor, seeks to prevent the registration on the ground that it is a resclsslble contract. Despite

X's objection may the land be registered in B's name'a. no, because the contract is rescissible and therefore without effect.

b. no, because the sale is voidable and after annulment is not binding.

c. yes, because the contract although voidable is valid and binding.d. yes, because the contract although rescissible is valid, binding and enforceable before

rescission.

A46. A made a donation to B. Later A contracted several debts. what A has left as assets are much less

than his present Iiabiimes. May the donation to B be rescinded' .

a. no, because the debts were incurred after the donation has been made.

b. no, nf A gave guaranty or security for his debts.

c. yes, because the donation is rescissibie being in fraud of creditors.

d. Yes, because A has become insolvent after the donation.

8

8

47. To defraud his creditor, A sold his property no B (who is in good faith). Later B sold the property to

C, who is in bad faith. May the creditor rescind the sale?

a. yes, because the third person C, is in bad faith.

b. No, because the third person B is in good faith.

c. no, because the contract is voidable and not rescissible.

d. yes, because the contract is rescissible.

48. To defraud his creditor, A sold his house to X. When however the creditor wanted to collect his

credit, somebody lent A enough money. Is the sale rescissible?

a. yes, because it was entered into fraud of creditors.b. no, because the creditor can coiled the credit due to him.

'c. No, because the btor Has become ln good faith when he was lent enough money no pay

his debts.d. yes, because the debtor was in bad faith when he sold his house to x.

Q 49. A oraliy sold to B a house at 16 Kiko St. malate, manila.the true number of the house and instead wrote on the contract "No. 18 IGko St. malate, Manila.


12/17

ReSA: The Review School of Accountancy

The remedy shall be:a. Annulment of a voidable contract because or mutual mratake.

b. Reformation of instrument because of lack of meetlng of minds.

c. Reformation of instrument because of mutual error. .d. Declaration of nuilrty of the contract because of the uncertainty of the intentIon as no the

object.

D

c

50. A loan for P800.00 was orally contracted. May the lender recover the sum lent?

a. no, because the contrad is unenforceable.

b. no, because the contract must be in writing to be valid.c. yes, if the debtor ratifles the loan.d. yes, because the contract ns enforceable.

51. When has father area but before the delivery of the Df0oertv no hum, a son sold his share of th

property inherited. Is the sale valid?

a. No, because future inheritance cannot be sold.

b. yes, because future inheritance can be the oblect of the contract.

c. yes, because what has been sold is present inheritance.d. no, because the son was not the owner due to lack of delivery to him.

52. Element without which there cannot be a contract ss:

a. Essential elementb. Natural element

c. Accidental element

d. An of the above


J>53. Contracts take efect only the parties, their assigns and heirs except where the rights and

obligations arising therefrom:a. Is not transmissible by their natureb. Is not transmissible bY stipulation of the namesc. Is not transmissible by provision of lawd. All of tne abovee. none of the above

d. An of the above


54. Where damagw is caused to either of the contracting M418 or to a third person the contract

may be: '

a. Annulled

b. Rescinded

c. Raunea

1 .*

_ END-


13/17

BUSINESS LAW ATTY. ms.BCNAFE, J

Quxz ON CONTRACTS - PART III

D

2.

3.

Must be in writing to be enforceable:a. Lease of land for 12 monthsb. Lease of car for 18 months

Which of the following ls not a requisite for the valldlty of a contract? .a. Consent b. Object c. Cause d. Dellvery

o owes c ps00. Nofwltzhstandlngthe knowledge f thusD pald the amount. Realizing this mistake, D wants to recover the amount he paid.

a. D can recover on the ground of mistakeb. D can recover because hls obllgatlon ls not enforceablec. D can recover otherwise C will be enriched at the expense of D

d. D cannot recover

D 4.

b.

C.

1.

c. Both a and b

d. none of a and b

D However, C's right has already prescribed.

Three of the following contracts are void. Which ls the exception? .a. Those who cause, object or purpose is contrary to law, morals, good custom, public order or public

policyThose which are absolutely simulated or fictitious .Those whose cause or object did not exist at the time of the transactionThose where both parties are incapable of giving consent to a contractd.

D 5. x, a former government employee, suffered from severe paranoia and was confined in the mental hospitaIn 2000. After his release he was placed under the guardianship of his wife to enable him to get hisretirement pay. In 2004 he became a mining prospector and sold some mining claims. In 2006, hewants to annul the sale claiming that he was not mentally capacitated at the time of sale. The sale inquestion was

a. Resclssible b. Void C. voidabbe d. Valid

D

Dd. All of them

D

6. which of the following is not presumed to be legal subrogation?a. when a creditor, pays another creditor who is preferredb. when a third person, not lnter8ted ln obligation, pays with the approval of the debtorc. when a third person interested ln the obligation pays even without the. approval of the debtord. none of them

7. Essential requisites of a contract:a. Consent b.

Which of the following Instruments is not subjed to reformation?a. Simple donations inter vivos wherein no condition is imposedb. willsc. when the agreement Is voidd. All of the above

9. valid, binding and enforceable until annulleda. Rescisslble contract b. void and ab initio contract

O

voidable contract d. Validable con

the defect. which

. *WJ65,9ll**'/a u Z`f2_]6*'3*Cause c. Subct

8.

(L c.

10. In three of the following defective contracts, ratification deanses as

exception? .a. Both parties are incapable of giving consentb. Sale of immovable propeny or Interest therein orally entered intoc. Sale ofpieoe of land thru an agent and the authority is orald. contracts entered into by a person who has been given no authority

11. S makes an offer to B on January 1, 2007. B makes knownand received by S on January 5. meantlme, on January 3, S became insanea.D.

c.d.

A his acceptance In a letter sent un January

The contract ls voidable because one party is insaneThere is already a meeting of minds, the contract is nerfecrecsThe contract is not bmding because there is no meeting of mindsThe contract is void the offer being ineffective.


14/17

12. Based on the samecommunicated to him.a.D.

C.

d.

facts except S ls sans . but only a minor at the time the acceptance as

There is no meeting of minds between the parties, therefore void.Tne contract isThe contract is binding between the partiesThe contract is unenforceabte.

not bmcilng because the party is incapacitated

C 13.a.b.c.d.

which of the following contract ls voidable? IThose whose object is outslde the commerce of men vo-1

Those whlch are absolutely llctlllousThose where one of the partles is incapacitatedThose whlch contemplate an lmposslble servlce. w/

14. The .stlpulation in a contract to the effect that the debtor should remam as a ervant In the house and in theservrce of her creditor so long af. sre hao r|ol pald her debt is void because it Is.a. Contrary to good custom c. Contrary to law and moralityb. Contrary to public policy d. Contrary to public order.

C 15. X, after thedetermined to B,

C.

O

6,

(1

death of his father, sold his inheritance though its amount has not yet beenfor a consideration of PS0,000.

a. The contrad is valid only lf the inheritance valued at least equal or more than P50,000b. The contract ls rescissible

The contract ls void lf nothing remains of the inheritance to be turned over to Bd. Contract ls void, future inheritance cannot be the object of sale

16. x alleged that Y promised to glve him one hectare of land. This ls ln consideration of X's meritoriousservices to Y. Y pleads ln defense that since the promise was not in writing, it is unenforceable under'

the statute of Frauds. Decide.a. The promise is unenforceable because it is not ln writingb. The Statute of Frauds is applied because A has rendered servicesc. The Statute of Frauds is inapplicable here, because the promise to give the land ls not a sale

of real propertyd. The statute of Frauds can apply to partially executed contract

17. statement no. I: In voidable contracts, there ls no need to ratify the same before they can beconsidered validTIn unenforceable contracts, however ratification is mandatory before they can beconsidered enforceable. TStatement No 2: "There ls undue influence if insidious words or machinations was employed by a paon the other just to obtain the lattef's consent, without which the latter would not have entered .into tcontractt.a. Both are true

b. Both are false

c. No.1 is true while no.2 is falsed. No.1 is false while no.2 is true

0 18.

C

c.d.

Three of the following are void contracts. which ls the exception?a. Contracts where the cause is immoralb. contracts to prevent a known supporter of a political rival from vaing for his candidate for a

valuable considerationContracts with valld consideration but with unlawful motives

Absolutely simulated contracts

0 19. Statute of Frauds is appiicable toa. executed contractb. oral contract of loan 'c. contract not to be performed within a year from the making thereof

mutual promise to marry.d.

c4 20. Which of the following is correct?a. An action to enforce judicially a natural obligatlon prescrlbes In 4 yearsb. An action for annulment of contract is lmprescrlptiblec. An action to declare a contract vold is not subject to prescriptiond. *\3n8;>" for resclsslon of contract prescnbes ln five (5) years counted from the ex ion of the

O21. 8 frauduientiy ammces S to sen to him (B) a masterpiece paunu fn p1

for P120,000, a good faith purchasr. "Q r 00,000.

Subs8qu6|'\ly,BsoidR(

a.D.

s is entitled toAnnul the contract with B plus damagesRecover the painting from x but no damages

Recover damages from BAnnu# the contract between B andx


15/17

a 22_

b.

Which uma followl contracts is not rescossible?a. Those whlch 8"9 entered lnto by guardlans whenever the wams. whom they represent surfer a

lesson of more than 'A of the value of the object of the contract. l . n more than 'A of theThose executeo in representation of an absentee, af the latter suffer a 8510

value of the object of the mmm

d, Those undertaken in fraud of credltors when the latter canno

due them

c.

23. when there is concurrence of offer and acceptance, there ls:a. ConceptionConsummation b. c. Consent d. Consideration

C/

b.

25.

C,

24. wmch of the following contracts is voldable? cra. Those where both parties are incapable of giving consent to a C0(1[

Those undertaken in fraud a creditors when me latfer cannot tn any

colect the ctaims due them . . flue or c. Those where the consent is vitiated by mistake, violence, bntimidatron, undue M nce

fraudd. Those whose object is outside the commerce of men

d.

Which of the following contracts is resclssible?a. Those where one of the parties ls incapable of giving consent to a contract

b. Those where both parties are incapable of giving consent to a contract

Those which are entered into by guardians whenever the wards whom theyrepresent suffer a lesion of more than 'A of the value of the object of the contract

Those which are absolutely simulated or Hctitious.

c.

1>

9 27. L entered into a contract of mortgage with X. T, the clerk of L, typed the docummt.neghgence, the document made was that of sale instead of mortgage .Due to T's

a.b.C.

d.

The remedy is annulmentParties may go to court fur interpretationparties may enforce their right because it is enforceableReformauon of instrument is proper

28.

C/

AThese persons are bound by contracts, except;a. Third persons o. Assigns c. Heirs d. parties

D

26. which of the following can be considered as a feature of a void contract?a. Subjed to ratmcationb. It existsc. Action or defense of nulltty is subject to prscriptlon

d. Novation cannot apply

29. Liable for the loss of the subject matter by fortuitous event:a. Creditor c. Both creditor and debtor b. Debtor d. none of them

8

c. P80,000 because it as too

30. S offers to sell his house to B for P 100 000. B asks him lf h -. I e ld acce Pfollowlng is correct? wou pt 80,000. whuch of the

a. Because of ambiguity, both offers are terminated by operation of lawb. B's es e is a co n r-o ff ' . ' . .ps0foogf u te ffer e ectlvely termnnatmg the P 100,000 offer and 1nst|gating anofferfo

B's response is a rejection of the P 100,000 offer, and th s no

indefinite to be an offer. ere | offer for

B's response is a mere inquiry, the P 100,000 offer by S is still ln forced.

1731. Example no. 1: G, guardian of w, sold W's house valued at P50, ooo for P371 soo or a lesson by 'A of me

value.Example no. 2: S sold hls house valued at P50, 000 for only P10, 000 because 5 dia not know me true value(N the house.a. Bothcontracts are resdssible.b. Of*y no. 1 is resdssublec. no.2 is voidable because there ls an error or mlstake.a. 50:91 are valid and enforceable.


16/17

37. page

oompecimr, C Corporation,

The stipulation is defective but subject to ratihcation .

32. Bthereafznye bought out a with a stipulation that C Corporation should nota. 9398 In any business ln the phlllpplnes unless consented to and approved by B company,

b. We stipulation ls valld because the parties am free to enter lmo any stipulation, terms andsuch as this one.

We stipulation is unenforceable as there was no showing that the sale was done ln wrltlngThe stspulation is void because it ls wntrary to public policy.

c.d.

D33.

c.

d.

which of the following is not valid?a. mutual promise to marry entered into orally

Sale of immovable propeny orally entered into . nsentOne of the parties in a contract is incapable of QWIUQ co 's conse r Mortgagor of an immovable cannot alienate it w1thout the mortgagee n '

D 34.a.D.

C.

d.

D forced C to execute a promissory note.Contract is rescissible because the contract is fraudukt

The contract is void .C cannot demand payment from D because the contract ns unenforceable

Contract remains to be valid .

D 35. Example 1- S sold to B in a private instrument his land. Later, B wanted to have the sale reglstered; butreglstratlon requires a public instrumentz In here, B may compel S to execute the needed publicInstrument.Example 2- S sold to B orally hls land. After B pald S the price he wants to reglster the land ln his namebut he needed a public instrument of sale. In here B may compel S to execute the needed publicinstrument.

a. Botn examples are falseb. only the first ls true c. Only the second is trued. Both exampies are tme

1>

D

~@

d. Void

'

37. An agreement in restraint of trade or establishing monopoly is:a. Perfectly valld b. voidable c. unenforceable

38. Three of the following are resclsslble, which is not?a. Sale of property under litigation made by defendant without the. consent of plaintiff or authority of

the court.Those made to defraud aedltors when the latter have no other means to recover their claimsThose agreed upon ln representation of absentees, if the absentee s ffe lesion b m 4of the value of the property subject of the contract u rs y ore than 1/4Contract of sale and the price is unusually inadequate resulting to lesiond.

p debtor for P3.000, will work as a servant of M wlthout pay until she couldunder this premise, which

because this is equivalent to involuntary

D creation, madmcauon or

b.c.d.

p would be valid and binding upon the pawes tnemw

36. In a contract of sale executed by S and B, it appears s sold his motor vehicle to B for P50,000. It turnedout however, s has three motor vehicles. Gallant valued P80,000: Hi-Ace van valued P70,000, and a Jeepvalued P60,000. which of the following is correct?a. The contract shall be reformed because there was mistakeb. The parties can ask for interpretation because the word Motor vehicle is ambiguous.c. The panies can ask for annulment of the contractd. There ls no contract.

b.c.

39. S and M agreed ln print that S,llnd money with which to pay her debt. S failed to comply with her obligation,of the following statements ls correct?a. The agreement to work as a servant is void because it ls immoral.b. To act as a servant without pay is unconstitutional

servitude

c. The agreement to work without pay since written ls enforceable.d. The contract to work without pay as a servant until the debt is paid is vold.

40. Which of the following contracts ls not required to appear in a public document?a. Acts and contracts which have for their objectthe transmission

extlngulshment of real rights over immovable propeny.The cesslon, repudlatlon or renundation of hereditary rightsThe power to administer propertySale ol' immovable propeny

41. In order that a stipulation in favor of a thlrd personthe following are the requlsltes, except; . '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.

The third person communicated his acceptance to the obligor before its revocation.That there must be an existing agency between either of the contracting parties and the third.

person.

c.d.


17/17

Page5

42. Statement NQ_J,:Incldente entitles the person against whom It was employed the rtght to seek

U1 Dolose annulment of the contract.

5ta.tement..,hL0._7.; A stapulation

a. Both are true

b. Both are false

u KLU1 ls an exception to the rule on relativity of contracts.

c. No. 1 is true, no. 2 ls false

d. No. I ls false; No. 2 is true

~1>

D

D

43. E1

Oblicon Text

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