7/19/2018 Quiz | iCPA

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https://www.icpa.ph/review/session/824335 1/4
7/19/2018 Quiz | iCPA

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Result
You correctly answered 7 out of 10 questions with an accuracy of 70.0%.

You gained 90 experience points!

Question #1
S offers to B 100 radio sets for P50,000 payable in 30 days with 10% interest per annum. B cables S to advise
that he accepts provided the interest is reduced 5%. If S and B are both merchants and there is no further
communication between them relating to the terms, then
The contract is perfected with B's reduced interest rate becoming part of the agreement.
B has made a counter offer
None of the answers are correct.
The contract is formed incorporating only the terms of S.
Regulatory Framework for Business Transactions - Contract of Sales (Average)

Question #2

Which phrase most accurately completes the statement. Any third person who induces another to violate his
contract
shall be liable for damages to the other contracting party. shall not be liable for damages to the other
contracting party. shall be liable for damages only if he is a party to the same contract. shall not be liable
for damages if the parties are in pari delicto
Regulatory Framework for Business Transactions - Contract of Sales (Average)

Question #3

Amador obtained a loan of P300,000 from Basilio payable on March 25, 2016. As security for the payment of
his loan, Amador constituted a mortgage on his residential house and lot in Basilios favor. Cacho, a good friend
of Amador, guaranteed and obligated himself to pay Basilio, in case Amador fails to pay his loan at maturity.
If Amador fails to pay Basilio his loan on March 25, 2016, can Basilio compel Cacho to pay?
Yes, Basilio can compel Cacho to pay because the nature of Cachos undertaking indicates that he has bound
himself solidarily with Amador. Yes, Basilio can compel Cacho who bound himself to unconditionally pay
in case Amador fails to pay; thus the benefit of excussion will not apply. No, Basilio cannot compel Cacho to
pay because Basilio has not exhausted the available remedies against Amador. No, Basilio cannot compel
Cacho to pay because as guarantor, Cacho can invoke the principle of excussion, all the assets of Basilio must
first be exhausted.
Regulatory Framework for Business Transactions - Contract of Sales (Average)

Question #4

Reformation is not the proper remedy if

There was mistake, fraud, inequitable conduct or accident which prevented the meeting of the minds of the
contracting parties. One party was mistaken and the other acted fraudulently or inequitable in such a way
that the instrument does not show their true intention. The mutual mistake of the parties causes the failure of
the instrument to disclose their real agreement. The true intention of the contracting parties is not expressed
in the instrument purporting to embody the agreement by reason of mistake, fraud, inequitable conduct or
accident.
https://www.icpa.ph/review/session/824335 2/4
7/19/2018 Quiz | iCPA

Solution:
Legal documents, such as contracts, deeds, mortgages, and trusts, are all proper subjects for reformation. Since
the original intent of the parties must control, however, a totally new agreement cannot be created through
reformation. The court, in the exercise of its Equity powers to do justice, will reform a document only in the
event that Fraud or mutual mistake occurred in its execution. Reformation is a remedy that is granted at the
discretion of the court only where the facts and circumstances of a particular case warrant it. It will not be
granted where an entirely new agreement would result between the parties or where unwarranted hardships
would be imposed upon them. Only an individual who has acted in Good Faith can apply to the court to have an
instrument reformed. Reformation is not available as a remedy to correct every minor error, such as
typographical errors; rather, it is granted where there has been a mutual mistake that substantially affects the
parties' rights and obligations. The mistake must have been in existence at the time the instrument was drawn up.
A mistake in the description of land and its boundaries ordinarily justifies reformation of an agreement where
the purchaser and seller intended that all the seller's property be sold to the purchaser. In addition, a Mistake of
Law by which both parties to the instrument have incorrectly comprehended the legal effect of the facts and the
document might also result in reformation.
Regulatory Framework for Business Transactions - Contract of Sales (Average)

Question #5
Amador obtained a loan of P300,000 from Basilio payable on March 25, 2016. As security for the payment of
his loan, Amador constituted a mortgage on his residential house and lot in Basilios favor. Cacho, a good friend
of Amador, guaranteed and obligated himself to pay Basilio, in case Amador fails to pay his loan at maturity.
If Amador sells his residential house and lot to Diego, can Basilio foreclose the real estate mortgage?
No, Basilio cannot foreclose the real estate mortgage. The sale confers ownership on the buyer, Diego, who
must therefore consent. Yes, Basilio can foreclose the real estate mortgage because real estate mortgage
creates a real right that attaches to the property. Yes, Basilio can foreclose the real estate mortgage. It is
binding upon Diego as the mortgage is embodied in a public instrument. No, Basilio cannot foreclose the
real estate mortgage. To deprive the new owner of ownership and possession is unjust and inequitable.
Regulatory Framework for Business Transactions - Contract of Sales (Average)

Question #6

A, B, C and D are solidary debtors of X in the amount of P800,000. X then made a demand from A but collected
only P600,000 because he (X) was remitting As share (P200,000). How much can A recover from B, C and D?
P266,667 each from B, C and D Answer not given P200,000 each from B, C and D P150,000
each from B, C and D
Regulatory Framework for Business Transactions - Contract of Sales (Average)

Question #7
Reformation is not the property remedy if
one party was mistaken and the other acted fraudulently or inequitably in such a way that the instrument
does not show their true intention. the mutual mistake of the parties causes failure of the instrument to
disclose their real agreement. the true intention of the contracting parties is not expressed in the instrument
purporting to embody the agreement by reason of mistake, fraud, inequitable conduct or accident. there was
a mistake, fraud, inequitable conduct or accident which prevented the meeting of the minds of the contracting
parties.
Regulatory Framework for Business Transactions - Contract of Sales (Average)

Question #8
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7/19/2018 Quiz | iCPA

Payment by cession as distinguished from dation in payment

The effect is to release the debtor for the net proceeds of the things ceded or assigned. The property is
alienated by the debtor to the creditor in satisfaction of a debt in money. The debtor is not necessarily in a
state of financial difficulty. What is delivered by the debtor is merely a thing to be considered as the
equivalent of the performance of the obligation
Regulatory Framework for Business Transactions - Contract of Sales (Average)

Question #9
Three of the following are conditional sales. Which is the exception?
Sale subject to a contingency
Sale with a right to repurchase
Sale of expectancy
Sale of vain hope
Regulatory Framework for Business Transactions - Contract of Sales (Average)

Question #10

Andy, Besta and Cutie are solidary liable to Yolly for P900,000 but Andys consent had been obtained by
intimidation. If Yolly sue Andy, Besta or Cutie:
C is not liable because he can use a defense that the consent of Andy was obtained by intimidation and
therefore voidable Andy is not liable because as to him it is a complete defense. B is liable for P900,000
because he has no available defense since fraud was applied to Andy not to him. Andy is liable for P900,000
minus his own share of P300,000 leaving a balance of P600,000 since their liability is solidary.
Regulatory Framework for Business Transactions - Contract of Sales (Average)
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https://www.icpa.ph/review/session/824335 4/4