Rescissible contracts

501. Is one that was entered into legally by the contracting parties but has resulted in
economic damage to one of the parties or an outside party?

a) Voidable contracts
b) Rescissible contracts
c) Unenforceable contracts
d) Void contracts

502. Which essential element is missing in a rescissible contract?

a) Consent
b) Object
c) Cause
d) None of the above.

503. What is the injury suffered by one who did not receive the equivalent value of what was
bargained for?
a) Interest
b) Penalty
c) Lesion
d) Prescription

504. An example of a rescissible contract is one which is entered into by guardians whenever
the wards whom they represent suffer lesion by of the value of the things which are the
object thereof.
a) One-fourth
b) More than one-fourth
c) Less than one-fourth
d) Three fourths

505. The action to claim rescission must be commenced within?

a) Four years
b) Four months
c) Five years
d) One year

506. Example No. 1: Donation by an insolvent debtor.

Example No. 2: Sale of shares of stocks in violation of preemptive right.
a) Voidable; Rescissible
b) Rescissible; voidable
c) No. 1 is rescissible; while No.2 is unenforceable
d) Both are rescissible

507.On September 1, CY, A entered into a contract with B whereby A sells to B 5,000 sacks of
sugar tobe delivered on the 15th and to be paid in full on the 30th. There was no agreement
for rescissionbased on prepayment. A did not deliver on the 15th
but on the 30th, he was willing and offering to deliver but B did not make payment on said
date and so A did not like it and refused to make delivery. Which is incorrect?
e) A cannot rescind the contract for nonpayment of the price
f) A cannot refuse to deliver the goods
g) B is not entitled to recover damages
h) A can rescind the contract for nonpayment of the price since B is at fault.

508.1st statement: Rescission of contracts and rescission or resolution of reciprocal

obligation are the same
2nd statement: Prescription does not affect unauthorized contracts.
a. True, True
b. False, True
c. False, False
d. True, False

509. Rescission of contract can take place in this case

a. When the thing which is the object of the contract is legally in the possession of a third
person who acted in bad faith
b. When he who demands rescission can return whatever he may be obliged to restore
c. When the party seeking resolution can perform only as to part and as to remainder
d. When the seller cannot return the installments paid to him by the buyer

510. Which of the following are rescissible contracts?

a) Those who made by guardians when their wards suffer lesion by more than 1/4 of the
value of the things which are the object thereof.
b) Those where one of the parties is incapable of giving consent to contract.
c) Those do not comply with Statute of Frauds.
d) Those which are absolutely simulated or fictitious.

511. A contract of sale made by d of his only lot to X in order to defraud C, his creditor. X was
not aware of the fraudulent intention of D when he sold the lot to him. A contract of sale
made by D to X of jewelry which C is trying to recover in a court case he filed agaist D was
not aware that the jewelry was the subject of litigation between C and D. which contract/s
is/are rescissible?
a) I only
b) II only
c) Both
d) Neither

512. Which of the following is/are valid contracts?

I. Voidable
II. Unenforceable
III. Inexistent
IV. Rescissible

a) I,II,III
b) I,II,IV
c) II,III,IV
d) I,III,IV

513. Just like voidable and unenforceable contracts, rescissible may also be ratified.
a) True
b) False
514. Both annulmemt and rescission are available not only to the contracting parties but
also to third persons whose interests are affected?
a) True
b) False

515. Annulment and rescission can be prevented by ratification

a) True
b) False

516. When the thing deteriorates with the debtor’s fault, the creditor may choose one of the
following:
a) Mutual restitution
b) Rescission of the obligation with indemnity for damages
c) Suffer the deterioration of the thing
d) Institute an action for negligence

517. The taking back of an offer by the offeror is

a) Revocation
b) Rejection
c) Cancellation
d) Consideration

518. A contract that contains a promise of both parties is

a) Implied
b) Bilateral
c) Unilateral
d) Express

519. A valid contract must contain at least four of the six elements of a contract.
a. True
b. False

520. A(n) ________________ occurs when one party to a contract does not do what he or
she agreed to do.
a. Breach
b. Fraud
c. Consideration
d. Ratification

521. If a valid offer is met with a valid acceptance, the result is

a. Misrepresentation
b. Genuine agreement
c. Legality
d. Capacity

522. People sometimes enter into _________________ contracts without saying a word.
a. Voidable
b. Express
c. Unenforceable
d. Implied

523. The offeree’s refusal, or ______________, of an offer ends that offer.

a. Rejection
b. Revocation
c. Implication
d. Expression

524. An offer must be definite, communicated to the offeree, and ____________________.

a. Signed
b. Implied
c. Seriously intended
d. Timely

525. When a bilateral mistake is made, neither party may avoid the contract.
a. True
b. False

526. . A deliberate deception to secure unfair or unlawful gain is

a. Misrepresentation
b. Libel
c. Unilateral mistake
d. Fraud

527. Overcoming a person’s will through force is

a. Fraud
b. Duress
c. Extortion
d. Ratification

528. A minor has the right to avoid a contract.

a. True
b. False

529. A legal means of enforcing a right or correcting a wrong is a(n)

a. Breach
b. Remedy
c. Avoidance
d. Beneficiary

530. A minor who claims to be over the age of majority commits

a. Fraud
b. Misrepresentation
c. Extortion
d. Larceny

531. A minor would be held responsible for the fair value of which of the following?
a. Athletic shoes
b. CDs
c. Medical care
d. Video games

532. After reaching the age of majority, a person may _________________________ a

contract made during minority by using, selling, or keeping the item, or by making payments.
a. Confirm
b. Disaffirm
c. Sign
d. Ratify

533. A promise to do something that is already under a legal obligation to do that same thing
is not consideration.
a. True
b. False

534. A promise to give money in exchange for something that has already been done is
binding.
a. True
b. False

535. Consideration in a contract means that:

a. A person has the mental capacity to enter into a contract.
b. The two parties deal with the contract in a polite manner.
c. The contract is legal and fully valid.
d. Something of value is being exchanged by the two parties.

536. For consideration to be present in a contract, the two parties must pay the market
value of the goods. For example, if one party is selling a car to another party, the car must be
priced as it would at a dealership. a. True
c. False

537. A court’s award that reimburses a buyer for reasonable expenses when the seller has
breached a contract is __________________ damages.
a. Incidental
b. Actual
c. Real
d. Illusory

538. . If both parties to an illegal agreement are equally at fault, the court will aid both
parties equally.
a. True
b. False

539. When contracts eventually end, they are said to be

a. Rejected
b. Avoided
c. Discharged
d. Unenforceable

540. Illegal agreements are

a. Voidable
b. Void
c. Limited
d. Enforceable

541. Charging more than the maximum legal interest rate is

a. Fraud
b. Usury
c. Extortion
d. price-fixing

542. Competitors who sell a particular product or service at an agreed price are engaged in
a. price-fixing
b. Restraint of trade
c. Usury
d. a restrictive covenant

543. A promise not to compete is

a. price-fixing
b. restraint of trade
c. Usury
d. a restrictive covenant

544. The destruction of the subject matter of a contract discharges that contract.
a. True
b. False

545. The destruction of the subject matter of a contract discharges that contract.
a. True
b. False

546. As long as all terms have been carried out properly and completely, the contract is
discharged by _______________. (This is the most common way contracts are discharged.)
a. Agreement
b. Avoidance
c. Performance
d. Exaction

547. Damages agreed upon by the parties when they first enter into a contract are called
a. Actual damages
b. Incidental damages
c. Anticipatory damages
d. Liquidated damages

548. Express contract means a contract made by

a) words either spoken or written.
b) documents.
c) both words and documents
d) all of the above.

549. Contracts classified on the basis of performance are

a) executed contracts.
b) executory contracts.
c) partly executed or partly executory contracts.
d) all of the above.

550. Contracts classified on the basis of performance are

a) executed contracts.
b) executory contracts.
c) partly executed or partly executory contracts.
d) all of the above.

551. A contract in which, under the terms of a contract, nothing remains to be done by
either party is known as
a) executed contract.
b) executory contract.
c) unilateral contract.
d) none of the above.

552. An implied contract is one which comes into existence on account of

a) conduct of the parties.
b) non-availability of a paper for writing.
c) inability of the parties to write or speak.
d) directions given by a court.

553. A promised to marry B. Later on B died. This contract of marriage

a) becomes void.
b) is void from very beginning.
c) is valid.
d) is illegal now.

554. A promised to marry B. Later on B died. This contract of marriage

a) becomes void.
b) is void from very beginning.
c) is valid.
d) is illegal now.

555. According to enforceability, the contracts may be classified as

a) valid contracts.
b) void contracts.
c) voidable contracts.
d) all of the above.

556. An offer and its acceptance is the basic requirement of an agreement and as per this
requirement an offer by one party
a) should be made to the other who is related to him.
b) may also be made to himself.
c) should be made to another who may or may not be related to him.
d) should be made to another before the Registrar.

557. All illegal agreements are void; but all void agreements are not illegal.
a) True
b) Partly true
c) False
d) None of the above

558. Where a particular type of contract is required by law to be in writing and registered, it
must comply with the necessary formalities as to writing, registration and attestation.
Otherwise, such a contract is
a) void contract.
b) illegal agreement.
c) valid contract.
d) unenforceable contract.

559. Where the obligation in a contract is outstanding on the part of both parties, it is called
a) void contract.
b) illegal agreement.
c) unilateral contract.
d) bilateral contract.

560. An agreement is
a) enforceable by law if it meets the requirements of the law of the land.
b) enforceable by law if any one party to it wants.
c) enforceable against the law.
d) enforceable by law if it is made by competent parties.

561. …………….. is a one-sided contract in which only one party has to perform his promise or
obligation?
a) Void contract
b) Illegal agreement
c) Unilateral contract
d) Bilateral contract

562. S offers to sell his CAR to B for P100,000. B asks him if he would accept P80, 000. Which
of the following is correct?
a. Because of ambiguity, both offers are terminated by operation of law.
b. B’s response is a counter-offer effectively terminating the P100, 000 offer and instigating
an offer for P80, 000.
c. B’s response is a rejection of the P100, 000 offer, and there is no offer for P80, 000
because it is too indefinite
d. B’s response is a mere inquiry, the P100, 000 offer by S is still in force

563. By this principle, the validity and efficacy of the contract cannot be left to the will of
one of the contracting parties.
a. Relativity of contract
b. Mutuality of contract
c. Obligatoriness of contract
d. Freedom of contract

564. This principle means that contracts take effect only upon the contracting parties, their
assigns or successors-in-interest
a) Relativity of contract
b) Mutuality of contract
c) Obligatoriness of contract
d) Freedom of contract

565. B forced S to sell him (B) a masterpiece painting for P1M.Subsequently, B sold it to X for
P 2M, a good faith purchaser. S is entitled to
a. Rescind the contract with B plus damages
b. Recover the painting from X but no damages
c. Recover damages from B
d. Annul the contract plus damages

566. Which of the following is correct?

a. An action to enforce judicially a natural obligation prescribes in 4 years
b. An action for annulment of contract is imprescriptible
c. An action to declare contract void is not subject to prescription
d. An action for rescission of contract prescribes in five (5) years counted from the execution
of the contract

567. The following contracts should observe the Statute of Frauds, except:
a. Guaranty
b. Lease of personal property longer than one year
c. Representation as to the credit of a third person
d. Lease of real property longer than one year

568. An “invitation to bid”, B proposes the following: “I will buy the property for P10, 000 if
the bid of any other offerrors or bidders shall be considered the best terms of amount and
conditions, I am to equal that offer”.
a. The offer is speculative, because it cannot be considered as against another offer which is
certain
b. The offer is considered a counter offer
c. This is a continuing offer which is very certain C The advertiser is not bound to accept the
higher bidder

569. . In the preceding question, which of the following statements is correct?

a. If there is no more offer made, the contract is perfected on the offer of B because he will
be considered as the highest bidder
b. However, if another bidder, X, bidder P15, 000, he will be considered as the highest bidder
and the contract is perfected
c. In letter (b), if X increases his bid for P20, 000, and no more bids equals his bid, the
contract is perfected for P20, 000
d. The advertiser is not bound to accept the higher bidder

570. On July 15, 2014, X entered into a contract with Y. On February 10, 2015, X discovered
that fraud was committed at the time he entered. Remedy of X is to annul when?
a. Within three years from the time of the fraud
b. Within four years from February 10, 2015
c. Within four years from the time A entered into the contract
d. On February 10, 2015

571. Consent is manifested by the meeting of the offer and the acceptance upon the thing
and the cause which are to constitute the contract. Which of the following constitutes a
definite offer?
a. An offer made through an agent
b. Business advertisement of things for sale
c. Advertisement for bidders
d. All of the above

572. Example No. 1: The husband, by intimidation, was able to obtain the consent of his
wife, with regards to the sale of a piece of land to him belonging to the wife for P1 million.
The contract is voidable because there was intimidation. Example No. 2: In the above
example, the right of the wife is to go to court and file a motion for annulment within four
(4) years from the time intimidation ceased.
a. Both are true
b. No. 1 is true; No. 2 is false
c. Both are false
d. No. 1 is false; No. 2 is true

573. An agreement in restraint of trade.

a. Perfectly valid
b. Unenforceable
c. Voidable
d. Void

574. Rescission of contract can take place in this case:

a. When the things, which are the object of the contract, are legally in the possession of
third persons who acted in good faith.
b. When he demands rescission can return whatever he may be obliged to restore.
c. When the party seeking resolution can perform only as to part and rescind as to
remainder.
d. When the seller cannot return the installment paid to him by the buyer.

575. Which of the following contracts is required to be in writing to be enforceable? a. An

agreement that by its terms is not to be performed within a year from the making thereof.
b. A special promise to answer for the debt, default or miscarriage of another.
c. An agreement made in consideration of marriage, other than a mutual promise to marry.
d. All of the above.

576. S makes an offer to B on January 1, 2014. B makes known his acceptance in a letter sent
on January 2, and received by S on January 10. Meantime, on January 5, S becomes insane.
a. The contract is voidable because one party is insane
b. There is already a meeting of minds, the contract is perfected
c. The contract is not binding because there is no meeting of minds
d. Contract is unenforceable.

577. In the preceding number S is perfectly sane but only an unemancipated minor of the
time the acceptance is communicated to him.
a. There is no meeting of minds between the parties, unless ratified by the guardian of S.
b. The contract is not binding because the party is incapacitated
c. The contract is binding between the parties (but voidable)
d. Contract is valid.

578. In a contract, as written, D promises to pay C P10, 000 on September 15, 2014. The
consideration received by D is not stated in the contract. Decide.
a. The contract is valid because the cause is always presumed to exist.
b. The contract is valid so long as it in writing
c. The contract is valid because cause is not essential to a contract
d. The contract is void because the cause is not stated.

579. The stage of “conception” of a contract is:

a. When the contract is fully executed
b. When the parties come to an agreement
c. When negotiations are in progress
d. When there is a meeting of the parties’ minds.

580. Which of the following contracts is rescissible?

a. Those where one of the parties is incapable of giving consent to a contract
b. Those where both parties are incapable of giving consent to a contract
c. Those which are entered into by guardians whenever the wards whom they represent
suffer a lesion of more than ¼ of the value of the object of the contract.
d. Those which are absolutely simulated or fictitious.

581. Contracts that cannot be sued upon unless ratified:

a. Voidable
b. Rescissible
c. Unenforceable
d. Void

582. Contract that is made for a valuable consideration is:

a. Onerous
b. Onerous and Gratuitous
c. Gratuitous
d. Aleatory

583. Who is liable for the loss of subject matter by fortuitous event?
a. Creditor
b. Both creditor and debtor
c. Debtor
d. None of them

584. These persons are bound by contracts:

a. Contracting parties
b. Heirs
c. Assigns or Assign
d. All of them

585. L entered into a contract of lease with X. T, the clerk of L, typed the document. Due to
T’s negligence, the document made was that of sale instead of lease.
a. The remedy is annulment
b. Parties may go to court for interpretation
c. Parties may enforce their right because it is enforceable
d. Remedy is reformation

586. Which of the following can be considered as feature of the void contract?
a. Subject to ratification
b. They exist
c. Action or defense for nullity is subject to prescription
d. It is imprescriptible as a defense

587. Statement No.1: The interpretation of obscure words or stipulation in a contract shall
not favor the party who caused the obscurity.
 Statement No. 2: Gross inadequacy of the price does not affect the validity of contracts
unless it can be shown that there was fraud, force or violence, error or mistake, undue
influence, or threat or intimidation attending the execution thereof.
a. Both are true
b. No.1 is true; No. 2 is false
c. Both are false
d. No.1 is false; No. 2 is true

588. S entered into a contract with B by threatening B that if B does not agree to make the
contract, S would publish defamatory matter concerning B’s wife.
a. The contract is valid because the defamatory matter to be published does not relate to B,
the contracting party.
b. The contract is voidable because such publication when carried out whether true or not
will cause serious harm to B and his wife
c. The contract is unenforceable but B is entitled to damages the moment the publication is
made.
d. Contract is void

589. Statement No.1: If the cause is not stated in the contract it is presumed that it is
unlawful.
Statement No. 2: The action for rescission is subsidiary; it cannot be instituted except when
there is no other legal means to obtain reparation for damages suffered.
a. Both are true
b. No.1 is true; No. 2 is false
c. Both are false
d. No.1 is false; No. 2 is true

590. Because of the intimidation employed by X, a third person, S sold his car to B. This
contract is:
a. Void
b. Unenforceable
c. Voidable
d. Rescissible

591. B called C by the telephone to guaranty the debt of D to C. The contract between B and
C is:
a. Unenforceable
b. Rescissible
c. Voidable
d. Annullable

592. An obligation which cannot be enforced by court action, but which is binding on the
party who makes it in conscience and according to natural justice is called
a. Civil obligation
b. Pure obligation
c. Natural obligation
d. Simple obligation

593. Contract which has no effect at all and cannot be ratified is a/an:
a. Unenforceable
b. Voidable
c. Void contract
d. All of them

594. Statute of Frauds is applicable to

a. Partially executed
b. Oral contract of loan when the amount involved is less than P500
c. Contract not to be performed within a year from the making thereof
d. All of the above.

595. An incidental element of a contract

a. Implied warranty
b. Payment of interest in a loan
c. Delivery of the object in contract of pledge
d. All of the above

596. Statement No. 1: A threat to enforce one’s claim through competent authority, if the
claim is just or legal does not vitiate consent.
Statement No.2: Contracts entered into during a lucid interval are valid. Contracts agreed
into a state of drunkenness or during a hypnotic spell are binding.
a. Both are true
b. No.1 is true; No. 2 is false
c. Both are false
d. No.1 is false; No. 2 is true

597. In three of the following defective contracts, ratification cleanses the defects. Which is
the exception?
a. Both parties are incapable of giving consent
b. Sale of immovable property or interest orally entered into
c. Sale of piece of land thru an agent the authority is oral
d. Contracts entered into by a person who has been given no authority

598. Valid until annulled unless there has been ratification

a. Rescissible contract
b. Voidable contract
c. Inexistence contract
d. None of the above

599. In a contract of sale executed by S and B, it appears S sold his motor vehicle to B and B
bought it for P10, 000. It turned out however, S has three motor vehicles. Gallant valued
P80, 000: Hi-Ace van valued P70, 000; and a Jeep valued P60, 000. Which of the following is
correct as remedy?
a. The contract shall be reformed because there was mistake
b. The parties can ask for interpretation because the word Motor vehicle is ambiguous.
c. The parties can ask for annulment of the contract
d. There is no contract.

600. S was forced by X to sign a contract with B for the sale of specific property for P10, 000.
C a creditor of X is prejudiced by the contract. What can S do?
a. S may ask for annulment of the contract
b. S may ask for rescission of the contract
c. S may ask C to declare the contract avoided
d. C may ask for the annulment of the contract.