THE LAW ON OBLIGATIONS AND CONTRACTS - FINALS 1

I. IDENTIFICATION (25 pts.)

1. The juridical relation arises when a thing is received without any right and the thing
delivered by mistake.
2. An accessory undertaking to assume greater liability in case of breach. It is attached to
an obligation in order to ensure performance.
3. Delivery and transmission of ownership of a thing by the debtor to the creditor as an
accepted equivalent of the performance of the obligation.
4. Right pertaining to person over a specific thing, without a passive subject individually
determined against whom such right may be personally enforced.
5. An obligation where the debtor is required to fulfill only one of the several prestations to
extinguish the obligation.
6. From a day certain give rise to the obligation.
7. Solidarity on the part of the debtors.
8. One where a concurrence of several creditors, or of several debtors, or of several
creditors and debtors, by virtue of which, each of the creditors has a right to demand,
and each of the debtors is bound to render compliance with his proportionate part of the
prestation which constitute the object of the obligation.
9. A right pertaining to a person to demand from another, as a definite passive subject, the
fulfillment of a prestation to give, to do or not to do. A right enforceable only against a
definite person or group of persons.
10. The juridical tie which binds the parties to the obligation.
11. Additions to or improvement upon a thing, either naturally or artificially.
12. An occurrence or happening which could not be foreseen or even if foreseen, is
inevitable; absolutely independent of human intervention; act of God.
13. Exist as part of the contract even if the parties do not provide for them, because the law,
as suppletory to the contract, creates them.
14. Failure or neglect, for an unreasonable and unexplained length of time to do that which,
by exercising due diligence, could or should have been done earlier; it is negligence or
omission to assert a right within reasonable time warranting a presumption that the
party entitled to assert it either has abandoned it or declined to assert it
15. When a person takes improper advantage of his power over the will of another,
depriving the latter of a reasonable freedom of choice.
16. 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, or upon the person or
property of his spouse, descendants or ascendants, to give his consent.
17. Those which lack individuality and are not regulated by special provisions of law.
18. The contracting parties may establish such stipulations, clauses, terms and conditions
as they may deem convenient, provided they are not contrary to law, morals, good
customs, public order, or public policy.
19. Condition or state by virtue of which an admission or representation is rendered
conclusive upon the person making it and cannot be denied or disposed as against the
person relying thereon.
20. A preparatory contract in which one party grants to the other, for a fixed period, the
option to decide whether or not to enter into a principal contract.
21. Inadvertent and excusable disregard of a circumstance material to the contract.
22. Contracts are perfected by mere consent and from that moment, the parties are bound
not only to the fulfillment of what has been expressly stipulated but also to all
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consequences which, according to their nature, may be in keeping with good faith,
usage and law, (art.1315) except real contracts, such as deposit, pledge and
commodatum, are not perfected until the delivery of the object of the obligation.
23. Simple loan; contract whereby one of the parties delivers to another, money or other
consumable thing
24. It is one where a party gives something to another because of some service or benefit
given or rendered by the latter to the former, where such service or benefit was not due
as a legal obligation. The consideration of one is greater than the other’s.
25. Contracting for or receiving interest in excess of the amount allowed by law for the loan
or use of money.
II. MULTIPLE CHOICE (15 pts.)
1. Whenever in an obligation a period is designated, it is presumed to have been
established for the benefit of:
a. Both debtor and creditor
b. The creditor
c. The debtor
d. The third party
2. An act of liberality whereby a creditor condones the obligation of the debtor.
a. Confusion
b. Compensation
c. Remission
d. Novation
3. When the thing deteriorates pending the fulfillment of the suspensive condition without
the fault of the debtor, the impairment is;
a. To be borne by the party who caused the deterioration.
b. To be borne partly by the debtor and partly by the creditor
c. To be borne by the debtor
d. To be borne by the creditor
4. The taking back of an offer by the offeror is
a. revocation
b. rejection
c. cancellation
d. consideration
5. Alex persuaded his grandmother, Clara, to sell him her car for $1,000. They both knew
the car was worth much more than that. However, Clara did not need the car anymore
and loved her grandson, so she agreed to sell him the car. The next day Clara found out
that Alex was planning to sell the car to a friend for $6,000. Clara can avoid the contract
because of:
a. duress
b. fraud
c. undue influence
d. mistake
6. A legal means of enforcing a right or correcting a wrong is a(n)
a. breach
b. remedy
c. avoidance
d. beneficiary
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7. A minor who claims to be over the age of majority commits

a. fraud
b. misrepresentation
c. extortion
d. larceny
8. 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.
9. When contracts eventually end, they are said to be
a. rejected
b. avoided
c. discharged
d. unenforceable
10. Illegal agreements are
a. voidable
b. void
c. limited
d. enforceable
11. Charging more than the maximum legal interest rate is
a. fraud
b. usury
c. extortion
d. price-fixing
12. Overcoming a person’s will through force is
a. fraud
b. duress
c. extortion
d. ratification
13. 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
14. If a valid offer is met with a valid acceptance, the result is
a. misrepresentation
b. genuine agreement
c. legality
d. capacity
15. People sometimes enter into _________________ contracts without saying a word.
a. voidable
b. express
c. unenforceable
d. implied
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III. TRUE OR FALSE (25 pts.)

1. The donation by a person of his organ which will take upon his death is valid.
2. Reformation is a remedy availed of to express the real intent of the parties to a contract
whether oral or written.
3. Rescission cannot be availed of in the case of a last will and testament.
4. A contract is rendered voidable although a party gave his consent because of a
reasonable and well-grounded fear of imminent and grave evil upon the property of his
descendant.
5. A party who employed violence, intimidation, undue influence, or fraud, or who caused
mistake may bring an action to annul the contract on any such ground.
6. A contract which is the direct result of a previous illegal contract is also void and
inexistent.
7. The defense of illegality of contracts is not available to 3rd persons whose interests are
not directly affected.
8. In case of a divisible contract, if the illegal terms can be separated from the legal ones,
the latter may be enforced.
9. When the agreement is not illegal per se but is merely prohibited, and the prohibition by
law is designed for the protection of the plaintiff, he may, if public policy is enhanced,
recover what he has paid or delivered.
10. A party may recover, if public interest will be sub served, money or property delivered
by him for an illegal purpose, provided that he repudiates the contract before the
purpose has been accomplished.
11. If an illegal contract constitutes a criminal offense and both parties are guilty, both shall
be criminally prosecuted but they may keep the object of the contract.
12. The action or defense for the declaration of the inexistence or nullity of a contract does
not prescribed.
13. The right to set up defense or illegality of a contract may be waived.
14. Unenforceable contracts cannot be assailed by the 3rd persons.
15. Contracts that are required to be in writing under the Statute of Frauds may be enforced
if benefits have been accepted under them.
16. As a general rule, the debtor incurs in delay if he does not perform his obligation on the
date it is due.
17. If the obligation consists in the delivery of a determinate thing, the debtor who incurs in
delay shall not be responsible for loss due for future fraud is valid.
18. A waiver of an action for future fraud is valid.
19. If an obligation to give an indeterminate thing, the loss or destruction of anything of the
same kind will extinguish the obligation if the cause of the loss is a fortuitous event.
20. Acts of men such as armed robbery or piracy are considered fortuitous events if they
occur independently of the debtor’s will.
21. As a general rule, rights acquired in virtue of an obligation are not transmissible.
22. An obligation subject to a resolutory condition is demandable at once.
23. An obligation which is subject to a suspensive condition that is potestative on the part of
debtor at the same time, is valid.
24. The action or defense for the declaration of the inexistence or nullity of a contract does
not prescribed.
25. The right to set up defense or illegality of a contract may be waived.
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IV. ENUMERATION (15 pts.)

a. Demand by the creditor shall not be necessary in order that delay may exist in these
situations (5 pts.)
b. Requisites of fortuitous event (4 pts.)
c. List and define the six essential elements of a contract. (6pts.)

V. DIFFERENTIATION (20 pts.)

a. Difference between Delicts and Quasi –Delicts.
b. Difference between Fraud and Negligence.
c. Difference between Accessions and Accessories.
d. Difference between Resolution and Rescission