Obligations, Contracts & Intellectual Property Law

1. When two persons in their own right are creditors and debtors of each other
a. Confusion b. Compensation c. Novation d. Condonation
2. This is not necessary in order that compensation may prosper
a. That the two debts are both due
b. That the two debts be liquidated and demandable
c. That the be a retention or controversy commenced by third persons and communicated in due
time to the debtor
d. Both debts consists in a sum of money, or if the things due are consumable, they be of the same
kind, and also of the same quality if the latter has been stated
3. The substitution or change of an obligation by another, which extinguishes or modifies the first
a. Confusion b. Compensation c. Novation d. Consignation
4. Novation which changes the object or the principal condition of the obligation
a. Real b. Personal c. Mixed d. Partial
5. Expromission, delegacion or subrogating a third person in the right of the creditor
a. Real b. Personal c. Mixed d. Partial
6. Novation which changes the object and parties of the obligation
a. Real b. Personal c. Mixed d. Partial
7. Substitution of debtor where the initiative comes from a third person
a. Delegacion b. Expromission c. Subrogation d. Novation
8. Substitution of a debtor where the initiative comes from the debtor
a. Delegacion b. Expromission c. Subrogation d. Novation
9. The transfer to a third person of all the rights appertaining to the creditor
a. Delegacion b. Expromission c. Subrogation d. Novation
10. Legal subrogation is presumed in the following. Which is not correct?
a. When a third person, not interested in the obligation, pays with the approval of the creditor
b. When a creditor pays another creditor who preferred, even without the debtor’s knowledge
c. When a third person, not interested in the obligation, pays with the express or tacit approval of
the debtor
d. When, even without the knowledge of the debtor, a person interested in the fulfillment of the
obligation pays, without prejudice to the effects of confusion as the latter’s share.
11. A owes B P10,000 with C as a guarantor, A paid P4,000 leaving P6,000 unpaid balance. D without
knowledge of A, paid B the sum of P10,000. As a result of this payment.
a. The obligation is not extinguished as the payment is without the consent of A.
b. The obligation is extinguished but D cannot recover from A instead he should go after the
guarantor.
c. Thee obligation is extinguished but D can recover only P6,000 from A and if A cannot pay, D
should demand payment from C.
d. The obligation is extinguished, but D cannot recover P10,000 but only P6,000 from A and if A
cannot pay, he cannot go after C.
12. A has two creditors, B and C. B is a mortgage creditor for P20,000, and C is an ordinary creditor for
P10,000. C paid A’s debt of P20,000 to B.
1st statement If C’s payment is with A’s knowledge, C will subrogated in the rights of B.
2nd statement If C’s payment is without A’s knowledge, C will not be subrogated in the rights of B.
a. True, true b. True, false c. False, true d. False, false
13. I. In delegacion, the insolvency of the new debtor will not revive the original debtor’s obligation
II. In expromission, the insolvency of the new debtor may at times revive the original debtor’s obligation
a. True, true b. True, false c. False, true d. False, false
14. A deposited with B 100 cavans of palay at P10,000. A however, is indebted to B for P10,000 which is
already due. When A is withdrawing the palay. B refuses to deliver, claiming compensation. Is B correct?
a. Yes, both obligations are due
b. Yes, considering that the value of the palay is equal to the amount of A’s obligation
c. No, because there was no stipulation allowing compensation
d. No, because B’s obligation arose from a contract of deposit
15. A bought a car from B, a minor, for P100,000. One week later, A discovered that B was a minor at the
time of sale so he filed a complaint in court to annul the sale. Will the action prosper?
a. Yes, B being a minor is incapacitated to enter into a contract
 b. No, the right to annul the sale is given to B
c. Yes, B cannot file the action to annul the sale because he is a minor
d. No, unless there is lesion of more than of the value of the property
16. B borrowed from C P. 2M payable in one year. When C was in the province, C's 17 year old son borrowed
P. 1M from B for his school tuition fee and allowance. However the son spent it instead nightclubbing.
When the debt fell due, B tendered payment only for P. 1M claiming compensation on the P. 1M
borrowed by C's son. Is there legal compensation?
a. There is, because it gave the P. 1M to C's son for the latter's tuition and support.
b. There is none because the son of C did not spend the money for the tuition fee and allowance for
support.
c. There is, because of quasi-contract that obliges C to pay B for giving support to his son.
d. There is none, because C is not the principal debtor of B and B is not the principal creditor of C.
17. As a rule, if one party is incapable of giving consent the contract is voidable. But when B, a minor bought
some kilos of rice and other necessaries from S, the contract is:
a. Rescissible b. Unenforceable c. Voidable d. Valid
18. D is indebted to C in the sum of P200,000 due on January 27, 2011. To secure the payment of his
obligation, D mortgaged his land to C. On due date D did not pay his debt. Without C's knowledge D has
a car which he sold to B in order to hide of from C. B had knowledge of such intention of D when he
agreed to the sale. Decide.
a. The contract between D and B is rescissible
b. The contract is merely voidable
c. The contract is valid
d. The contract is unenforceable
19. X entered into a written contract with Y for the sale of his car at the price of P210,000.00. Subsequently,
F told X that the purchase price is very low as it can command a price of at least P250,000.00. X wanted
to increase the purchase price of his car to P250,000.00. This cannot be done by X because of what
principle of contract?
a. Freedom or liberty of contract
b. Mutuality of contract
c. Relativity of contract
d. Consensuality of contract
20. A and B entered into a verbal contract whereby A agreed to sell to B his only parcel of land for P1M, and
B agreed to but at the aforementioned price. B went to the bank, withdrew the necessary amount, and
returned to A for the consumption of the sale. A, however, had change his mind and refused to go
through with the sale. Can B compel A to accept the payment?
a. No, because the contract is void
b. No, the contract is unenforceable
c. Yes, because there was already a meeting of minds since sale is a consensual contract perfected by
mere consent
d. Yes, to prevent damage to B who was ready to pay as agreed upon
21. The bargaining point, that is, when negotiation is in progress
a. Consummation b. Conception c. Perfection d. Birth
22. The point where the parties have performed their respective obligations and the contract is terminated
a. Preparation b. Conception c. Perfection d. Consummation
23. The contract must bind both contracting parties
a. Consensuality of contract c. Mutuality of contract
b. Simplicity of contract d. Relativity of contract
24. Not a characteristic of contract
a. Consensuality of contract c. Mutuality of contract
b. Simplicity of contract d. Relativity of contract
25. Contracts are generally effective only between the parties, their assigns and their heirs
a. Consensuality of contract c. Mutuality of contract
b. Simplicity of contract d. Relativity of contract
26. When there is concurrence of offer and acceptance, there is
a. Payment b. Consignation c. Consent d. Tender of payment
27. They are the elements that are found in certain contracts and are presumed to exist unless set aside by
the parties
a. Accidental elements c. Artificial elements
 b. Natural elements d. Incidental elements
28. A delivered his car to B for the latter’s use for one week without any compensation. The cause of the
contract is
a. The car of A c. The period of one week
b. The generosity of A d. The delivery of the car
29. The principle that contracting parties may establish such stipulations, clauses, terms and conditions as
they may deem convenient, provided they are not contrary to law, moral, public policy and public order,
refer to the principle of
a. Liberty of contract c. Consensuality of contract
b. Relativity of contract d. Mutuality of contract

30. A delivered his bracelet to B for B’s necklace. No written agreement was signed by the parties. Which of
the following is appropriate description of the contract between A and B?
a. Onerous and bilateral c. Bilateral and innominate
b. Onerous and innominate d. Aleatory and nominate
31. The following instances will render an offer ineffective before acceptance is conveyed. Which one will
not? When one of the parties
a. Is civilly interdicted c. Becomes insane
b. Becomes insolvent d. Is placed under a hypnotic spell
32. An absolutely simulated or fictitious contract is
a. Void b. Voidable c. Rescissible d. Unenforceable
33. A contract where both contracting parties are incapable of giving consent is
a. Void b. Rescissible c. Unenforceable d. Voidable
34. The conception of a contract is when
a. There is meeting of the minds c. When the contract is executed
b. When negotiations are in progress d. When the parties come to an agreement
35. Contract which cannot be ratified
a. Rescissible b. Voidable c. Unenforceable d. Void
36. A is the guardian of B, a minor, B sold his land in writing to C valued at 1M for P.7M. The sale is
a. Rescissible b. Voidable c. Unenforceable d. Void
37. Not a requisite for the validity of a contract
a. Consent b. Object c. Cause d. Delivery
38. D forced C to sign a promissory note where C promises to pay D P100,000. The correct amount should
be P60,000. Which is correct?
a. The contract rescissible because there is lesion
b. The contract is unenforceable
c. D cannot demand payment from C because the contract is voidable
d. The contract is valid
39. If one party was mistaken and the other acted fraudulently or inequitably is such a way that the
instrument does not show their true intention, which one of the following is correct/
a. The former may ask for reformation
b. The latter may ask reformation
c. Either the former or the latter may ask for reformation
d. The former may ask for annulment

40. Although validly agreed upon, courts can nullify this contract because of damage to one of the parties or
to a third person and its enforcement may cause injustice by reasons of some externals facts
a. Rescissible contracts c. Unenforceable contracts
b. Voidable contracts d. Void contract
41. If mistake, fraud, accident or inequitable conduct has prevented a meeting of the minds of the parties to
a contract, the proper remedy is
a. Ratify the contract c. Annulment of the contract
b. Ask for specific performance d. Reformation of the contract
42. A stipulation in favor of a third person
a. Stipulation pour aurtrui c. Assignment of credit
b. Interest rate d. Pactum commissorium

43. Acceptance of an offer made by letter or telegram shall bind the offeror. From the time the
 a. Offeree accepted the offer c. Acceptance came to knowledge of the offeror
b. Offeree sent his letter or telegram d. Offeror made the offer
44. A contract where consent is given through mistake , violence, intimidation, undue influence of fraud is
a. Rescissible b. Voidable c. Unenforceable d. Void
45. When in order to wrest consent, serious or irresistible employed, there is
a. Violence b. Mistake c. Intimidation d. Fraud
46. When one of the contracting parties is compelled by a reasonable and well-grounded fear of an
imminent and grave evil upon his person or property, upon or the person or property of his spouse,
descendants or ascendants to give his consent, there is
a. Violence b. Mistake c. Intimidation d. Undue influence
47. When through insidious words or machinations of one of the contracting parties, the other is induced to
enter into contract which, without them he would not have agreed, there is
a. Fraud b. Mistake c. Intimidation d. Undue influence
48. The process of intentionally deceiving others by producing the appearance of a contract that really does
not exist
a. Absolute simulation b. Relative simulation c. Fraud d. Misrepresentation
49. The process of intentionally deceiving others by producing the appearance of a contract which is
different from the true agreement
a. Absolute simulation b. Relative simulation c. Fraud d. Misrepresentation

50. Statement No. 1: In novation by expromission, there can be a revival of the obligation if the new
debtor turns out to be insolvent, and such insolvency is of public knowledge.
Statement No. 2: A debtor paying a natural obligation to and in favor of a creditor by mistake can still
recover the same from the latter.

a. Both statements are true

b. Both statements are false
c. Statement No. 1 is false while statement no. 2 is true
d. Statement no. 1 is true while statement no. 2 is false

51. Three of the following instances will render an offer ineffective before acceptance is conveyed.
Which one will not?
a. Civil interdiction of either party c. Insanity of either party
b. Insolvency of either party d. Intoxication of either party

52. Payment made to a third person is valid to extinguish the obligation of the debtor to the creditor in
the following cases, except:
a. After payment to the creditor, the third person acquires the creditor’s right.
b. When the creditor ratifies the payment to the third person.
c. When through the creditor’s conduct, the debtor was led to believe that the third person
had authority to receive payment.
d. When the third person is subrogated to the rights of the creditor.

53. N, R and J solidarily bound themselves to deliver to S a Honda motorcycle valued at P 60,000. The
obligation was not fulfilled through the fault of J. Thereupon, S filed an action in court against N and
the court awarded P 72,000 to S representing the value of the motorcycle plus damages. Which of
the following situation is valid?
a. If N pays S the P 72,000, N can collect R and J P 24,000 each
b. S has to collect P 24,000 each from N, R and J to satisfy the court’s award of P 72,000
c. N can refuse to pay the penalty because it should be charged against J, the guilty party
d. If S succeeds in collecting the P 72,000 from N, N in turn can collect from R P 20,000 and
from J P 32,000
54. An obligation where various prestations are due but the performance of all of them is required in order to
extinguish the obligation is known as:
a. Alternative obligation c. Conjunctive obligation
b. Facultative obligation d. Simple obligation

55. Which of the following contacts is rescissible?

a. Contracts entered into during a hypnotic spell
b. Contracts entered into in a state of drunkenness
c. Contracts entered into to defraud creditors when the latter cannot collect the claims due them
d. Contracts where both parties are incapable of giving consent

56. A, B, C and D, joint debtors, are obliged to give V, W, X, Y and Z, solidary creditors, P 20,000.00
a. V may collect from B P 20,000 c. V may collect from B P 5,000
b. V may collect from B P 4,000 d. V may collect from B P 1,000

57. A statutory grant which confers to an inventor or his legal successor, in return for the disclosure of the
invention to the public, the right for a limited period of time to exclude others from making, using, selling or
importing the invention within the territory of the country that grants it
a. copyright b. patent c. trademark d. infringement

58. Any visible sign capable of distinguishing the goods or services of an enterprise..
a. copyright b. patent c. trademark d. infringement

59. A right over literary and artistic works which are original intellectual creations in the literary and artistic
domain protected from the moment of creation.
a. copyright b. patent c. trademark d. infringement

60. All of them below are non-patentable except one. What is it?

a. Discoveries, scientific theories and mathematical methods c. Industrial design

b . Aesthetic creations d. Methods for treatment of the human or Animal body