BAM242 – REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS PART 1

2ND PERIODIC – 1ST QUIZ

Name: Year & Section:

TRUE OR FALSE: Write FALSE if the statement is TRUE but write TRUE is the statement is FALSE.
_______1. An assignment of a credit, right or action shall produce no effect as am third person, unless it
appears in a public instrument.
_______2. A gratuitous assignment is In essence a donation; however, it need In comply with the
formalities of a donation.
_______3. The debtor who, before having knowledge of the assignment, pays h creditor shall be
released from the obligation.
_______4. The assignment of a credit excludes all the accessory rights such as guaranty, mortgage,
pledge or preference.
_______5. Only notice to the debtor of the assignment of credit is required. His consent is not required.
_______6. The vendor in good faith shall be responsible for the existence and legality of the credit at the
time of the sale, unless it should have been sold is doubtful; but not for the solvency of the debtor.
_______7. The contract of sale is perfected at the moment there is a meeting of minds upon the thing
which is the object of the contract and upon the price.
_______8. Assignment of credits and other incorporeal rights are perfected also at the moment there is
a meeting of minds.
_______9. The limits of the agent's authority shall be considered exceeded should it have been
performed in a manner more advantageous to the principal than that specified by him.
_______10. If an agent acts in his own name, the principal has no right of action against the persons
with whom the agent has contracted; neither have such persons against the principal.
_______11. The authority of the agent to act emanates from the powers granted to him by his principal;
his act is the act of the principal if done beyond the scope of the authority.
_______12. As long as the agent acts beyond the scope of the authority given by his principal, the
actions of the former shall bind the latter.
_______13. In an agency, the principal retains ownership and control over the property and the agent
merely acts on the principal’s behalf and under h” instructions in furtherance of the objectives for which
the agency was established.
_______14. The contract is clearly a sale if the parties intended that the delivery of the property will
effect a relinquishment of title, control and ownership in such a way that the recipient may do with the
property as he pleases.
_______15. An agent's authority to file suit cannot be inferred from his authority to collect or receive
payments.
_______16. The authority to exercise special powers must be duly established by evidence, even though
it need not be in writing.
_______17. In a contract of sale, the object is property.
_______18. In assignment of credit, the object is credit, incorporeal rights or rights of action.
_______19. The power to collect and receive payments on behalf of the principal is an ordinary act of
administration covered by the general powers of an agent.
_______20. A duly appointed agent has no power to exercise any act of strict dominion on behalf of the
principal unless authorized by a special power of attorney.

MULTIPLE CHOICES: Choose the letter of the correct answer.

1. I. An assignment of a credit, right or action shall produce no effect as am third person, unless it
appears in a public instrument.
II. A gratuitous assignment is In essence a donation; however, it need In comply with the formalities of
a donation.

1
BAM242 – REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS PART 1
2ND PERIODIC – 1ST QUIZ

A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

2. l. The debtor who, before having knowledge of the assignment, pays h creditor shall be released from
the obligation.
II. The assignment of a credit excludes all the accessory rights such as guaranty, mortgage, pledge or
preference.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

3. I. Only notice to the debtor of the assignment of credit is required. His consent is not required.
II. The vendor in good faith shall be responsible for the existence and legality of the credit at the time
of the sale, unless it should have been sold is doubtful; but not for the solvency of the debtor.
A. Only I Is true
B. Only II is true
C. Both are true
D. Both are false

4. Is an agreement by virtue of which the owner of a credit , known as the assignor, by a legal cause,
such as sale, dacion en pago, exchange or donation, and without the consent of the debtor, transfers his
credit and accessory rights toanother, known as the assignee, who acquires the power to enforce it to
the same extent as the assignor could enforce it against the debtor.
A. Barter
B. Waiver of Rights
C. Assignment of Rights
D. Stipulation pour atruie

5. I. The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is
the object of the contract and upon the price.
II. Assignment of credits and other incorporeal rights are perfected also at the moment there is a
meeting of minds.
A. I is True
B. II is True
C. Both are True
D. Both are False

6. One of the following is not a warranty of the assignor of credit?

A. The existence of the credit at the time of assignment
B. The legality of the credit at the time of the assignment unless the assignor sold it as doubtful

2
BAM242 – REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS PART 1
2ND PERIODIC – 1ST QUIZ

C. If expressly stipulated or unless the insolvency was prior to the sale and of common knowledge, the
solvency of the debtor
D. The solvency of the debtor regardless of stipulation

7. I. In case the assignor in good faith should have made himself responsible for the solvency of the
debtor, and the contracting parties should not have agreed upon the duration of the liability, it shall last
for one year only, from the time of the assignment if the period has not expired".
II. One who sells an inheritance without enumerating the things of which it is composed, shall only be
answerable for his character as an heir.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

8.. When a credit or other incorporeal right in litigation is sold, the debtor shall have a right to extinguish
it by reimbursing the assignee for
A. the price
B. the judicial costs
C. the interest on the price
D. Damages

9. I. The power to foreclose is not an ordinary agency that contemplates exclusively the representation
of the principal by the agent but is primarily an authority conferred upon the mortgagee for the latter's
own protection.
II. A special power to compromise authorizes submission to arbitration.
A. Only I is true
B. Only 11 is true
C. Both are true
D. Both are false

10. I. The authority of the agent to act emanates from the powers granted to him by his principal; his act
is the act of the principal if done beyond the scope of the authority.
II. As long as the agent acts beyond the scope of the authority given by his principal, the actions of the
former shall bind the latter.
A. Only 1 is true
B. Only II is true
C. Both are true
D. Both are false

11. I. The limits of the agent's authority shall be considered exceeded should it have been performed in
a manner more advantageous to the principal than that specified by him.
II. If an agent acts in his own name, the principal has no right of action against the persons with whom
the agent has contracted; neither have such persons against the principal.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

3
BAM242 – REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS PART 1
2ND PERIODIC – 1ST QUIZ

12. Special powers of attorney are necessary in the following cases, except:
A. To enter into any contract by which the ownership of an immovable transmitted or acquired either
gratuitously or for a valuable consideration
B. To make gifts, except customary ones for charity or those made to employees in the business
managed by the agent
C. To loan or borrow money, unless the latter act be urgent and indispensable for the preservation of
the things which are under administration.
D. To lease any real property to another person for one year

13. Special powers of attorney are necessary in the following cases, except:
A. To bind the principal to render some service without compensation
B. To bind the principal in a contract of partnership
C. To obligate the principal as a guarantor or surety
D. To create or convey real rights over personal property

14. Special powers of attorney are necessary in the following cases, except:
A. To create or convey real rights over immovable property
B. To accept or repudiate an inheritance
C. To ratify or recognize obligations contracted before the agency
D. Any other act of administration

15. I. In a contract of sale, the object is property.

II. In assignment of credit, the object is credit, incorporeal rights or rights of action.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

16. I. In a contract of sale, it need not appear in a public instrument to affect third person.
II. In assignment of credit, it must appear in a public instrument to produce effect as against third
person. In case the assignment involves real property, the instrument is recoded in the Registry of
Property.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

17. Includes any bill of lading, dock warrant, "quedan," or warehouse receipt0r order for the delivery of
goods, or any other document used in the ordina course of business in the sale or transfer of goods, as
proof of the possessi0n or control of the goods, or authorizing or purporting to authorize the possessor
of the document to transfer or receive, either by endorsemem0r by delivery, goods represented by such
document.
A. Document of title of goods
B. Document of negotiable instrument
C. Document of title of things

4
BAM242 – REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS PART 1
2ND PERIODIC – 1ST QUIZ

D. Document of non-negotiable instrument

18. I. Even if a document is titled as a general power of attorney, the requirement of a special power of
attorney is met if there is a clear mandate from the principal specifically authorizing the performance of
the act.
II. The special power of attorney can be included in the general power wilt" it is specified therein the act
or transaction for which the special power is required.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

19. l. The power to borrow money is one of those cases where corporate office" as agents of the
corporation need a special power of attorney.
ll. As a general rule, a contract of agency may be oral.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

20. I. If the special authority is not written, then it must be duly established by evidence.
II. A special power of attorney is necessary to lease any real property to another person for more than
one year.
A. Only I is true
B. Only ii is true
C. Both are true
D. Both are false

21. I. The authority to bind a principal as a guarantor or surety is one of those powers which requires a
general power of attorney,
II. A duly appointed agent has no power to exercise any act of strict dominion on behalf of the principal
unless authorized by a general power of attorney.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

22. l. A special power to sell includes the power to mortgage.

ll. Special power to mortgage includes the power to sell.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

23. I. The power to foreclose is not an ordinary agency that contemplates exclusively the representation
of the principal by the agent but is primarily an authority conferred upon the mortgagee for the latter's
own protection.

5
BAM242 – REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS PART 1
2ND PERIODIC – 1ST QUIZ

II. A special power to compromise authorizes submission to arbitration.

A. Only I is true
B. Only 11 is true
C. Both are true
D. Both are false

24. l. The power to collect and receive payments on behalf of the principal is an ordinary act of
administration covered by the general powers of an agent.
II. A duly appointed agent has no power to exercise any act of strict dominion on behalf of the
principal unless authorized by a special power of attorney.
A. Only I is true
B. Only 11 is true
C. Both are true
D. Both are false

25. I. An agent's authority to file suit cannot be inferred from his authority to collect or receive
payments.
II. The authority to exercise special powers must be duly established by evidence, even though it need
not be in writing.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

26. I. In a contract of sale, the object is property.

II. In assignment of credit, the object is credit, incorporeal rights or rights of action.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

27. I. In a contract of sale, it need not appear in a public instrument to affect third person.
II. In assignment of credit, it must appear in a public instrument to produce effect as against third
person. In case the assignment involves real property, the instrument is recoded in the Registry of
Property.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

28. Includes any bill of lading, dock warrant, "quedan," or warehouse receipt0r order for the delivery of
goods, or any other document used in the ordina course of business in the sale or transfer of goods, as
proof of the possessi0n or control of the goods, or authorizing or purporting to authorize the possessor
of the document to transfer or receive, either by endorsemem0r by delivery, goods represented by such
document.

6
BAM242 – REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS PART 1
2ND PERIODIC – 1ST QUIZ

A. Document of title of goods

B. Document of negotiable instrument
C. Document of title of things
D. Document of non-negotiable instrument

29. Includes all chattels personal but not things in action or money of legal tender in the Philippines.
A. Things
B. Fungible goods
C. Goods
D. Consumable goods

30. Means goods identified and agreed upon at the time a contract of sale is made.
A. Generic goods
B. Specific goods
C. Indeterminate goods
D. Quality of goods

31. A person who either has ceased to pay his debts I the ordinary course of business or cannot pay his
debts as they become due.
A. Bankrupt
B. Solvent
C. Debtor
D. Insolvent

32. When goods are in a such state that the buyer would, under the contract, be bound to take delivery
of them.
A. Deliverable state
B. Perishable state
C. Fungible goods
D. Non-fungible goods

33. A person binds himself to render some service or to do something representation or on behalf of
another with the consent or authority of the latter.
A. Agency
B. Pledge
C. Mutuum
D. Commodatum

*. The elements of a contract of agency are the following, except:

A. Consent of the parties to establish the relationship.
B. The object is the execution of a juridical act in relation to a third person.
C. The agent acts as a representative for himself.
D. The agent acts within the scope of his authority.

34. Y with general powers of administration given to him by P in writing, sold two parcels of land, one
for less than the price appearing in the inventory prepared by P and the other for double the price that
appeared in an aforesaid inventory. Which is correct?

7
BAM242 – REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS PART 1
2ND PERIODIC – 1ST QUIZ

A. Both contracts are binding upon P.

B. The sale for double the price appearing in the inventory is binding upon P.
C. Both contracts cannot be enforced against the P.
D. The sale for less than the price appearing in the inventory is binding upon P.

35. One whom the agent represents and from whom he derives authority.
A. Principal
B. Agent
C. Attorney in fact
D. None of the above

36. One who acts for and represents the principal.

A. Principal
B. Agent
C. Mandante
D. None of the above

37. The following are distinction between a sale and an agency:

I. In an agency, the principal retains ownership and control over the property and the agent merely acts
on the principal’s behalf and under h” instructions in furtherance of the objectives for which the agency
was established.
II. The contract is clearly a sale if the parties intended that the delivery of the property will effect a
relinquishment of title, control and ownership in such a way that the recipient may do with the property
as he pleases.
A. Only I is true
B. Only I l is true
C. Both are true
D. Both are false

38. I. The power to foreclose is not an ordinary agency that contemplates exclusively the representation
of the principal by the agent but is primarily an authority conferred upon the mortgagee for the latter's
own protection.
II. A special power to compromise authorizes submission to arbitration.
A. Only I is true
B. Only 11 is true
C. Both are true
D. Both are false

39. I. The authority of the agent to act emanates from the powers granted to him by his principal; his act
is the act of the principal if done beyond the scope of the authority.
II. As long as the agent acts beyond the scope of the authority given by his principal, the actions of the
former shall bind the latter.
A. Only 1 is true
B. Only II is true
C. Both are true
D. Both are false

8
BAM242 – REGULATORY FRAMEWORK AND LEGAL ISSUES IN BUSINESS PART 1
2ND PERIODIC – 1ST QUIZ

40. I. The limits of the agent's authority shall be considered exceeded should it have been performed in
a manner more advantageous to the principal than that specified by him.
II. If an agent acts in his own name, the principal has no right of action against the persons with whom
the agent has contracted; neither have such persons against the principal.
A. Only I is true
B. Only II is true
C. Both are true
D. Both are false

ENUMERATE THE FOLLOWING.

Give me the essential elements of agency.

Give me at least 6 transactions that requires SPA.