Chuchu

Republic of the Philippines
SULTAN KUDARAT STATE UNIVERSITY

College of Business Administration and Hospitality Management
Department of Accountancy
Tacurong City Campus, Sultan Kudarat
Midterm Examination
Law on Obligation and Contracts
Name Course/Year/Section: Score:
Instructions: Write all your answers in the test questionnaire. Use only blue/black inked pen. Erasures are
considered wrong. Please follow instructions carefully.
I. True or False. Write true if the statement is correct, otherwise write false.
TRUE 1. A joint creditor cannot act in representation of the others.

2. When an obligation is joint, damages resulting from breach of the obligation will be borne by the debtor who
caused the same.
3. In a joint indivisible obligation, delivery must be made to all joint creditors.
4. Common carriers are bound by law to observe extraordinary diligence.
FALSE 5. A tenant buys the house he is renting is an example of traditioconstitutumpossessorium.
6. Mora accipiendi is the delay of the parties in a reciprocal obligation.
7. Fraud is the absence of due care required by the nature of the obligation.
8. Any waiver of an action for future fraud is voidable.
TRUE 9. A potestative condition depends upon the will of one of the contracting parties.
FALSE 10. In a divisible contract, the whole contract is made unenforceable by the illegality of some terms.
TRUE 11. In a solidary obligation, payment made by any of the solidary debtors extinguishes the obligation.
FALSE 12. In a joint indivisible obligation, “joint” refers to active subject.
TRUE 13. An obligation is solidary when the nature of the obligation requires solidarity.
14. “Future knowledge of a past event” is a condition.
FALSE 15. In a facultative obligation, if it is impossible to give the substitute, another substitute is given.
II. Multiple Choice. Encircle the letter of the best answer.
1. It is the juridical relation resulting from lawful, voluntary, and unilateral acts by virtue of which the parties
become bound to each other to the end that no one shall be unjustly enriched or benefited at the expense of
another.
a. Agreement c. Contracts
b. Vinculum juris d. Quasi-Contracts
2. This takes place when something is received when there is no right to demand it, and it was unduly delivered
thru mistake.
a. SolutioIndebiti c. Vinculum juris
b. NegotiorumGestio d. Prestation
3. This happened when the creditor make a demand and the obligor fails to deliver the thing.
a. Negligence c. Mora accipiendi
b. Mora solvendi d. Compensatiomorae
4. Demand is not necessary to incur delay when:
a. Creditor refuses the performance without just cause.
b. The debtor is guilty of non-performance.
c. Time is the controlling motive
d. If the obligation bears interest
5. In what instance may we consider that there is no delay?
a. In civil obligations c. In obligation arising from crime
b. In positive obligation d. In natural obligation
6. It causes the extinguishment or loss of rights already acquired upon the fulfillment of the condition, that is, the
happening of the event which constitutes the condition. In other words, the fulfillment of which will extinguish an
obligation (or right) already existing.
a. Condition subsequent c. facultative condition
b. Suspensive d. positive condition
7. When the thing deteriorates with the debtor’s fault, the creditor may choose one of the following:
a. Mutual restitution
b. Rescission (cancellation) of the obligation with indemnity for damages
c. Suffer the deterioration of the thing
d. Institute an action for negligence.
8. It is a future and certain event upon the arrival of which the obligation (or right) subject to it either arises or is
terminated.
a. Fortuitous events c. Period
b. Condition d. Date and time
9. When the debtor binds himself to pay when his means permit him to do so, the obligation is:
a. Conditional b. Pure
c. Simple d. With a Period
10. If the obligation of the debtor is "I will pay you my debt after I have arrived from abroad," this is
a. Unenforceable c. Void
b. With a Period d. Conditional
11. "A sells to B his lot and house in the city if A decides to transfer and live in the countryside" is an example of:
a. Mixed Condition c. Casual Condition
b. Potestative Condition d. Resolutory Condition
12. A contract is in the stage of conception when:
a. There is meeting of the minds. c. The parties come to an agreement.
b. Negotiations are in progress. d. The contract is perfected.
13. If the obligor binds himself to perform his obligation as soon as "he shall have obtained a loan" from a certain
bank, this obligation is:
a. With a Term c. Suspensive
b. Conditional d. Resolutory
14. Delay in the giving or delivering of a thing
a. Mora solvendi ex re c. Mora accipiende ex re
b. Mora solvendi ex persona d. Mora accipiende ex persona
15. Which of the following statements is false?
a. Obligations to give definite things and those that are not susceptible of partial performance
shall be deemed divisible.
b. Execution of a certain number of days of work shall be divisible.
c. Accomplishment of work by metrical units are divisible
d. An obligation to pay a certain amount in ten annual installments is divisible.
16. A promised to give B his bag or sunglasses or belt on B’s 18 th birthday. Before B’s 18th birthday, all the things got
lost due to A’s fault.
a. The obligation is extinguished.
b. A and B should agree on another object to replace the lost ones.
c. B has a right to demand the value of the last thing lost plus damages.
d. A should pay B the value of all the objects that got lost due to A’s fault.
17. A obliged himself to pay B P5,000 on or before September 20, 2015. Which statement is false?
a. A can pay B before September 20, 2015.
b. B cannot demand payment before September 20, 2015.
c. The period is for the benefit of the debtor.
d. The period is for the benefit of the creditor.
18. “Period” agreed to by the parties.
a. Legal c. Definite
b. Conventional d. Judicial
19. “I will support you until you die.”
a. Subject to suspensive condition c. With a suspensive period
b. Subject to resolutory condition d. With a resolutory period
20. “I will give you free board and lodging if you do not engage yourself in prostitution.”
a. Condition void; obligation valid c. Condition void; obligation void
b. Condition valid; obligation void d. Condition valid; obligation valid
21. “I will pay you if I decide to sell the house in which I live.”
a. Condition void; obligation valid c. Condition void; obligation void
b. Condition valid; obligation void d. Condition valid; obligation valid
22. If the suspensive condition does not happen,
a. The obligation is deemed to have existed until the uncertainty of the happening of the condition has been
determined.
b. The obligation subsists.
c. It is as if the conditional obligation never existed.
d. The suspensive condition is void.
23. Absence of due care required by the nature of the obligation.
a. Fraud c. Delay
b. Negligence d. Contravention of tenor
24. Damages to vindicate the right that has been violated.
a. Actual c. Nominal
b. Moral d. Temperate
25. Demand by the obligee is not necessary in order that delay may exist
a. When the obligation or law expressly declares.
b. When time is of the essence.
c. When the obligor has rendered I beyond his power to perform.
d. All of the above.
26. In an obligation to give where the object is designated merely by its class or genus without any physical
segregation from all others of the same class, the thing is said to be
a. Certain c. Specific
b. Determinate d. Indeterminate
27. Parties may stipulate another standard of care other than the diligence of a good father of a family; no stipulation
can be made waiving the
a. Extraordinary diligence
b. Minimal diligence
c. Diligence of a good father of a family
d. Diligence depending on the condition of the thing.
28. Creditor has a personal right to the fruits of the thing from the time
a. The obligation to deliver it arises. c. The obligation is constituted.
b. The thing has been delivered to him. d. The agreement if perfected.
29. Obligation consists in doing or not doing something.
a. Unilateral c. Real
b. Bilateral d. Personal
30. Obligee has a right to enforce the obligation against the obligor in a court of justice.
a. Civil obligations c. Moral obligation
b. Natural obligations d. State obligations
III. Explain and state briefly the rule or reason of your answers.
1. On the due date, X could not pay Y his obligation in the amount of P150,000. However, X owns a car worth
P90,000 and Y is indebted to him for P20,000. Before the due date of the obligation, X sold his land worth
P80,000 to Z. What rights can Y exercise?
 See Art. 1177 example (de Leon)
2. A is obliged to give B his only car on August 20,2015. A did not deliver the car on August 20. On August 27, an
earthquake destroyed the building where the car was; the car was completely destroyed while parked inside. Is A
still liable to B?
 Yes. See Art. 1169
XXX End of Examination XXX
Prepared by:
ARIANNE JOY A. PURAZO, CPA, MPA

DINDO O. QUITOR, CPA
DOROTEO O. DONGUINES, CPA
Noted by:
ROBERT A. DEMAFILES, CPA, MBA, CAT
LAW ON OBLIGATIONS AND CONTRACTS

TEST BANK
INTRODUCTION
1. The kind of obligation defined in Article 1156 of the Civil Code is called:
a. Natural obligation
b. Civil obligation
c. Moral obligation
d. Parental obligation
2. An obligation exclusively based on positive law and enforceable in court:

a. civil obligation
b. natural obligation
c. moral obligation
d. mixed obligation
3. If a creditor’s right of action to collect based on a written contract has prescribed after 10 years from the time
the action has accrued, the civil obligation of the debtor is converted into:
a. civil obligation
c. moral obligation
d. mixed obligation
4. The definition of obligation emphasized the obligation of the obligor or debtor and implies the correlative
right of the oblige or creditor to:
a. sign the contract
b. demand the performance of the act or conduct
c. rescind the contract
d. honor his recirprocal obligation
5. It is an essential element of obligation which is the efficient cause established by the various sources of
obligations:
a. vinculum juris or juridical tie
b. juridical capacity
c. prestation, object or conduct
d. active and passive subjects
6. In an agreement between the seller and the buyer whereby the former will buy from the latter a specific thing
for P1,000, what is the efficient cause or juridical tie:
a. to give the specific thing
b. to pay the price
c. agreement
d. purchase of the specific thing
7. Obligations governed primarily by the agreement of the parties:

a. Those arising from law
b. Those arising from quasi-contracts
c. Those arising from contracts
d. Those arising from quasi-delicts
8. The following are essential elements of a valid object or prestation, except:

a. must be determinate or specific or at least determinable
b. must be physically or legally possible
c. must have an economic value or be capable of pecuniary estimation or possible equivalent in money
d. none of the above
9. Form is a requisite only of obligations:
a. arising from law

b. arising from quasi-contracts
c. arising from solemn contracts (e.g. donation)
d. arising from quasi-delict
10. The obligee is also called:

a. Active subject
b. Juridical tie
c. Prestation
d. Passive subject
11. The creditor is also called:

a. Active subject
b. Juridical tie
c. Prestation
d. Passive subject
12. This is not an element of a civil obligation:

a. Parties
b. Juridical tie
c. Prestation
d. All of the above are elements of civil obligation
13. This is the reason for the existence of the obligation

a. Active subject
b. Juridical tie
c. Prestation
d. Passive subject
14. This will NOT result to a civil obligation:

a. Riding a jeepney
b. Excess in the change given by a saleslady
c. Break up between boyfriend and girlfriend
d. Stealing something
15. This will result to a civil obligation:

a. Failure to return a borrowed item from a friend
b. Not liking the food ordered in a fast food chain because of its taste
c. Failure to follow parent’s command to help in the household chores
d. Refusal to share notes with a classmate
16. Quasi-contracts are those legal relations that:

a. Are agreed upon by both parties
b. Result from an illegal act
c. Requires payment to avoid being benefited at the expense of another
d. Result from fault or negligence
17. Quasi-delicts are those legal relations that:

d. Result from fault or negligence, there being no pre-existing contract between the parties
18. Obligation derived from this source of obligations is not presumed and must expressly provided by the Civil
Code or special laws in order to be demandable:
a. law or ex lege
b. contract or ex contractu
c. quasi-contract or quasi-contractu
d. act or omission punishable by law or ex delito or ex malficio
19. Obligations arising from this source of obligations have the force of law between the contracting parties and
should be complied with in good faith:
a. law or ex lege
20. A source of obligation, which is a legal fiction of legal relation resulting from lawful, unilateral and voluntary
act where there is no existing contract:
a. law or ex lege
21. It is an extra-contractual obligation where an officious manager voluntarily takes over an abandoned or
neglected property or business without authority of the owner:
a. negotiorumgestio
b. solution indebiti
c. quantum meruit
d. res ipsaloquitor
22. As a general rule, every person criminally liable for a felony is:
a. likewise liable for exemplary damages
b. also civilly liable
c. generally not civilly liable
d. discharged from payment of civil liability
23. In case of material damage or injury, the liability of a convicted person includes:
a. restitution
b. reparation
c. indemnification
d. all of the above
24. It is an act or omission which causes damage to another, there being fault or negligence and there being
no pre-existing contractual relation between the parties:
a. contract
b. quasi-contract
c. crime
d. quasi-delict
25. A source of obligation where it is not the act or omission which gives rise to the obligation, but the want of
care required from the circumstances:
a. contract
b. quasi-contract
c. crime
d. quasi-delict
NATURE AND EFFECT OF OBLIGATIONS
26. A person who is obliged to give something is:

a. Required to take care of the thing he will deliver diligently at all times
b. Required to take care of the thing he will deliver diligently if the thing is determinate only
c. Is not required to do something at all
d. Liable for damages if the thing is lost all the time
27. D and C agreed that prior to the delivery of D’s dog Blackie, D should keep it in the dog house, feed it four
times a day, give it a bath five times a week and make it stroll every morning for at least one hour. D should
therefore, take care of Blackie:
a. With ordinary care
b. According to law
c. According to stipulation
d. With proper diligence of a good father of the family
ART. 1163. EVERY PERSON OBLIGED TO GIVE SOMETHINg IS ALSO OBLIGED TO TAKE CARE OF IT
WITH THE PROPER DILIGENCE OF A GOOD FATHER OF A FAMILY UNLESS THE LAW OR THE
STIPULAITON OF THE PARTIES REQUIRES ANOTHER STANDARD OF CARE.
28. This is a determinate thing:

a. A kilo of “dinorado” rice
b. A pet dog Labrador
c. Ballpen you are using right now
d. Mobile phone Samsung Galaxy
29. The following are the rights available to a creditor in obligations to give a determinate thing:
a. To compel specific performance
b. To recover damages in case of breach.
c. Acquires personal right to the fruits of the thing from the time the obligation to deliver arises
d. All of the above
30. The following are the rights available to a creditor in obligations to give a generic thing:
a. To ask for performance of the obligation.
b. To ask that the obligation be complied with at the expense of the debtor.
d. Only letter (a) and (b)
31. If the debtor is already delayed:

a. He is liable for damages even if the thing was lost due to fortuitous event
b. He is not liable for damages if the thing was lost due to fortuitous event
c. He is not liable for damages all the times
d. He is liable for damages all the times
32. It the obligation is to give a mobile phone and there was no agreement:
a. The debtor should also give the mobile phone charger
b. The debtor is not obliged to give the mobile phone charger
c. The debtor should only give the mobile phone charger if it was asked from him
d. The debtor should not only give the mobile phone charger but also the headphone and other
accessories, if any
33. The creditor in an obligation to do has the right to:

a. Ask the debtor to perform the obligation
b. Ask the debtor who fails to perform the shall obligation to pay the person who executed the obligation
c. Ask the debtor who contrived the tenor of the obligation or have done the work poorly to pay
d. All of the above
34. Delay occurs when:

a. The date of payment arrive
b. The creditor demand for the fulfillment of the obligation
c. Anytime
d. The day after the date of payment agreed upon
35. A and B entered into a contract stating that A shall pay B P100,000.00 on or before Christmas Day of 2018
without need of demand. Supposing that after Christmas 2018, A has not yet paid B and that B has yet to
make any demand from A to pay. In this case:
a. A is no longer liable to pay B P100,000

b. A is still liable to pay B P100,000
c. A is liable to pay B damages only
d. A is liable to pay B P100,000 plus damages
36. This will not result to liability for damages:
a. Fraud
b. Delay
c. Performance not according to what was agreed upon
d. All of the above will result to liability for damages
KINDS OF OBLIGATIONS
37. The following are primary classes of obligations except:
a. pure and conditional

b. alternative and facultative
c. real and personal
d. joint and solidary
38. An obligation that does not depend on any condition is called

a. Facultative
b. Alternative
c. Resolutory
d. Pure
39. This is demandable at once:
a. Obligation that is based on a suspensive condition

b. Obligation that is based on a resolutory condition
c. Obligation with a period
d. Joint obligation
40. These kinds of obligations are demandable at once except:
a. Pure obligation
b. Obligations which contains a resoutory condition
c. Facultative Obligations
d. None of the above
41. A got a loan worth P100,000.00 from B. A binds himself to pay B when his financial condition would allow
him to do so. A’s obligation to pay B in this case is:
a. An example of a pure obligation

b. An example of an obligation with a potestative condition
c. An example of an obligation with a period
d. An example of an obligation with a resolutory condition
42. This is void:
a. Suspensive condition
b. Facultative condition
c. Unilateral condition
d. Potestative condition
43. An event that is both future and uncertain upon which the existence or extinguishment of an obligation is
made to depend is called:
a. Fortuitous event
b. Condition
c. Period
d. Day certain
44. A past event may be considered a condition:
a. False since a condition must be something that will happen in the future
b. False since an event that has happened in the past cannot be condition
c. True only if that past event is unknown to both parties
d. True even if the past event is known to one party as long as it is still unknown to the other party
45. A and B had an agreement where A is obliged to give something to B. The obligation is based on C
passing the CPA Board Exam. In this case:
a. A’s obligation is based on a casual condition and is valid
b. A’s obligation is based on a potestative condition and is not valid
c. A’s obligation is based on a mixed condition and is not valid
d. A’s obligation is based on a casual condition and is not valid
46. Obligations based on this condition is annulled:
a. Impossible condition
b. Condition contrary to good customs or public policy
c. Condition that is prohibited by law
d. All of the above
47. If A binds himself to give B P1,000 if B will cause harm to C, the:
a. Obligation is void
b. Obligation becomes demandable at once
c. The obligation is subject to impossible condition
49. An obligation where only one of the parties is bound to fulfill a prestation:
a. Personal
b. Divisible
c. Unilateral
d. Joint
50. Obligations arising from the same cause where each party is a debtor and a creditor of the other:
a. Solidary
b. Pure
c. Alternative
d. Reciprocal
51. This is when the debtor is bound by different prestations:

a. Alternative obligation
b. Facultative obligation
c. Joint obligation
d. Solidary obligation
52. This is when the debtors answer only for their part:
a. Joint obligation
b. Solidary obligation
c. Facultative obligation
d. Alternative obligation
53. Juan and Maria had an agreement that Juan will give his car to Maria if she will graduate cum laude in April
2012. In her last semester, Maria got a failing grade that makes her ineligible for graduation in April 2012. In
this case:
a. Juan should take care of the car until April 2012 for Maria since the obligation is to deliver a
determinate thing
b. Juan may sell his car to Pedro without waiting for April 2012
c. Juan may be forced to deliver to Maria the car only after graduation
d. Juan may be forced to give the car to Maria since the car is considered owned by Maria at the time of their
agreement
Art. 1184. The condition that some event happen at a determinate time shall extinguish the obligation as soon
as the time expires or if it has become indubitable that the event will not take place.
54. A obliged to give B P100,000 if B’s favorite basketball team will not win the championship. The legal
consequence of this agreement is:
a. A should pay B P100,000 if the basketball team loses the championship

b. A should pay B even before another team wins championship if the team was eliminated from the finals
c. A should pay B the moment it becomes evident that the team will not win the championship for whatever
reason
d. All of the above
55. There is constructive fulfillment of a condition when:
a. The obligor voluntarily prevents the fulfillment of a suspensive condition or condition precedent
b. The obligor voluntarily prevents the fulfillment of a resolutory condition or condition subsequent
c. There is impossible condition
Art. 1186. The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment.
56. Mario borrowed the laptop of Trixie. The agreement was for Mario to return the laptop to Trixie next
Monday. Unfortunately, a fire that occurred on Sunday gutted Mario’s house. Mario was not able to save the
laptop of Trixie because the fire was so sudden. In this case:
a. Mario should pay the value of the laptop to Trixie but without interest
b. Mario should pay the value of the laptop to Trixie subject to interest
c. Mario should pay the value of the laptop to Trixie and damages because there are important files in
the said laptop belonging to Trixie
d. Mario is not liable to pay Trixie
57. Joey is indebted to Maricel in the amount of P10,000.00. Maricel gave Joey the option to just give to her his
used cellphone amounting to P5,000.00 instead of paying the amount of his indebtedness. Joey has yet to
make up his mind what to give to Maria when he negligently lost his cellphone. In this case:
a. Joey is liable to Maricel of damages because he was negligent

b. Joey is not liable to Maricel of damages even if he was negligent
c. Joey is no longer liable to pay Maricle his debt amounting to P10,000.00
d. Joey is only liable to Maria in the amount of P5,000.00
58. A promised to deliver his car with plate number XXX111 to B on the condition that B will graduate with
honors. The legal effect of such agreement is:
a. A is relieved from the obligation if the car was lost due to fortuitous event before B’s graduation.
b. A will be liable to B if the car was lost due to the fault of A.
c. A should pay for the repair of the car if the car was damaged due to A’s fault.
d. All of the above
59. A certain diamond ring owned by Mrs. Cruz was stolen the night before Mrs. Cruz deliver the same to Mrs.
Santos based on their agreement. In this case:
a. The diamond ring is considered lost
b. Mrs. Cruz is liable to pay Mrs. Santos damages
c. Mrs. Cruz is still liable to deliver the diamond ring to Mrs. Cruz
d. All of the above
60. A promised to give his cellphone to B on condition that B will graduate with honors. The legal consequence
if the cellphone deteriorates would be:
a. A’s obligation is extinguished regardless whether A was at fault or not
b. B will bear the cost of the repair of the cellphone if the deterioration was not due to A’s fault
c. A cannot rescind the obligation regardless whether the deterioration is due to A’s fault or not
d. None of the above is correct
61. A is bound to give B his watch while B is bound to give A his dog. In case the dog dies:
a. A is still bound to give B his watch regardless whether B was at fault or not
b. A is no longer bound to give his watch to B
c. A is only bound to give B his watch only when B was not at fault
62. A is bound to pay B P100,000 on or before June 1, 2020. A believing that the obligation is due paid B the
entire amount. In this case:
a. A cannot recover from the amount.

b. A may recover from B the amount paid.
c. A may recover from B the entire amount with interest.
63. In an obligation with a period, the period is:
a. For the benefit of the debtor only

b. For the benefit of the creditor only
c. For the benefit of both the debtor and the creditor
64. The debtor shall lose his right to make use of the period when:
a. When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty or
security for the debt.
b. When he does not furnish to the creditor the guaranties or securities which he has promised.
c. When by his own acts he has impaired said guaranties or securities after their establishment, and when
through a fortuitous event they disappear, unless he immediately gives new ones equally satisfactory.
65. A is bound to give B any of the following,P10,000 in cash, his Labrador dog, or his cellphone. In this case:
a. A can compel B to accept part in cash and another dog.

b. A has the right to choose which one to deliver unless there was an agreement to the contrary.
c. B has the right to choose which on
c. B has the right to choose which one should A deliver unless there was an agreement to the contrary.
d. None of the above. *
66. Tito, Vic and Joey are liable to Jose jointly and severally in the amount of P30,000.00. In this case:
a. Jose can ask Tito to pay the entire amount

b. Jose cannot ask Tito to pay the entire amount
c. Jose should ask the three, Tito, Vic and Joey to pay if she wants to be paid the entire amount
d. Jose can ask his debtors to pay their respective share only
67. Pilo and Steph are solidarily obliged to give Minda a specific car worth P500,000.00. The car was lost
because of the fault of Steph. Hence, Minda asked them to pay the amount of P500,000.00. Pilo is ready to
pay his share but Steph cannot. In this case:
a. Minda can compel Pilo to pay the entire amount

b. Minda cannot compel Pilo to pay the entire amount
c. Pilo is relieved from his obligation because the car was lost due to Steph’s fault
d. The obligation to deliver the car was extinguished because Pilo had nothing to do with the loss
68. Ronnie hired Allan to forcibly get Ging’s necklace. They agreed that if Allan will fail in his mission, he
should pay Ronnie P5,000.00. In this case:
a. Allan can just pay P5,000 if he does not want to do the act of getting Ging’s necklace
b. Allan should pay Ronnie P5,000 is he fails to get Ging’s necklace
c. Allan can refuse to do what Ronnie asks him to do and also refuse to pay the P5,000
d. Allan cannot refuse to do what Ronnie asks him to do because of his contract with Ronnie
69. Chona wanted to buy a new cellphone. Her friend Regidor knew about it and wanted to impress Chona. So
he bought the exact model of the cellphone Chona wanted to buy. He did it without Chona’s consent. Unknown
to Regidor, Chona could have availed of 25% discount from a seller. In this case:
a. Chona should pay the entire amount to Regidor

b. Chona is only liable to pay 75% of the amount of the cellphone
c. Chona is only liable to pay 25% of the amount of the cellphone
d. Chona is not liable at all to Regidor
70. Troy is indebted to James in the amount of P50,000. As a security, Troy offered his diamond-embedded
ring that is coveted by Missy. Missy paid the loan of Troy to James thinking that Troy will default. She did it
without Troy’s consent. In this case:
a. Missy can get Troy’s ring if he cannot pay the P50,000

b. Missy cannot get Troy’s ring even if he fails to pay
c. Troy cannot be forced to pay Missy because she paid the loan without Troy’s consent
d. Troy is only liable to give Missy the ring
71. Joshua owed Katrina P100,000 subject to 10% interest (simple interest only). Joshua paid Katrina
P20,000. How much is not Joshua’s indebtedness?
a. P100,000
b. P90,000
c. P80,000
d. P20,000
73. A contract is:
a. A juridical necessity to perform an obligation for another person

b. An agreement wherein at least two persons agree that they will give or do something for the other
c. A choice to give, to do or not to do
d. A meeting of minds between two persons whereby one will pay a sum of money to the other person
74. The parties to a contract:
a. Are free to stipulate on the terms and conditions of the contract subject to certain limitation
b. Are free to stipulate on the terms and conditions of the contract without any limitation at all
c. Are not free to stipulate on the terms and conditions in all cases
d. Are not free to stipulate on the terms and conditions in certain cases
76. Contracts may be classified according to its importance or dependence on another contract as follows:
a. Onerous, gratuitous or remunerative contracts

b. Principal, accessory or preparatory contracts
c. Nominate or innominate contracts
d. Consensual, real or formal contracts
77. A contract wherein only one of the parties has an obligation is called:
a. Unilateral contract
b. Bilateral contract
c. Commutative contract
d. Aleatory contract
78. This is NOT generally required in order to make a contract valid:
a. Consent of the parties

b. Object of the contract
c. Cause of the contract
d. Specific form of the contract
79. The meeting of the offer and the acceptance is called:
a. Consent
b. Cause
c. Communication
d. Consideration
80. Consent in a contract means:
a. The offer of one of the parties

b. The acceptance of the offer subject to a certain condition
c. The offer of several options
d. The meeting of the offer and acceptance
81. Mario is trying to sell to Trixie his merchandise. He is offering his laptop to Trixie for P20,000.00. Trixie
asked Mario for a discount. Mario responded that he will ask his boss if he can lower the price. In this case:
a. The contract of sale is perfected

b. There is a contract of sale but it is unenforceable
c. There is no contact yet
d. Trixie should pay Mario the entire amount of P20,000.00
82. Tony offered to Paula his 20 moblie phones for P10,000.00 each. Paula answered that she is willing to buy
the cellphone, for the price but just 15 pieces. Is the contract perfected:
a. No, because there is a qualified acceptance which constitutes an offer by the buyer
b. Yes, because there perfected sale because the number of pieces is merely incidental and the items
are divisible and capable of partial delivery
c. Yes, because there was already acceptance
d. No, because the offer is not yet certain
83. A qualified acceptance constitutes:
a. Acceptance
b. Counter-offer
c. Meeting of the minds
d. All of the above
87. Contracts that are perfected by delivery of the object of the obligation is called:
a. Consensual contract
b. Real contract
c. Delivery contract
d. Obligatory contract
TEST I: DISCUSSIONS. Answer the following questions.

1. What are the essential requisites of an obligation? Give an example to illustrate them.
Answer: The essential requisites of an obligation (a) passive subject, (b) active subject, (c) object or
prestation and (d) juridical tie or legal tie.
Example:
Ana borrows money from Joanna, and they both agreed on the interest for the principal amount
for 5% a month until Ana paid her loan.
Here, Ana is the passive subject, Joanna is the active subject, the pr is the object or prestation and
the agreement is the juridical or legal tie.
2. Why are obligations under the Civil Code a juridical necessity? Explain.
Answer: Obligation is a juridical necessity because in case of non-compliance, the courts of justice may be
called upon by the aggrieved party to enforce its fulfilment or in default thereof, the economic value that
it represents.
3. What are the elements or requisites in order that a person may acquire a right of action in court
against another to enforce the performance of the latter’s obligation?
Answer: In order that one may claim to have a cause of action, the following elements must concur: (1) a
right in favour of the plaintiff by whatever means and under whatever law it arises or is created; (2) an
obligation on the part of the named defendant to respect or not to violate such right; and (3) an act or
omission on the part of such defendant in violation of the right of the plaintiff or constituting a breach of
the obligation of the defendant to the plaintiff for which the latter may maintain an action for recovery of
damages or other appropriate relief.
4. May a person incur obligations even without entering into any contract or voluntary agreement?
Explain.
Answer: Yes, because obligations do not only arise from contracts. They can be imposed by law, arise
from quasi-contracts, from crimes or acts or omissions punished by law and from quasi-delicts or torts.
5. Give the rules as to the liability of a person for loss or damage resulting from a fortuitous event.
Answer:
•When expressly specified by law
o The debtor is guilty of fraud, negligence, or delay, or contravention of the tenor of the obligation;
o The debtor has promised to deliver the same (specific) thing two or more persons who do not
have the same interest;
o The obligation to deliver a specific thing arises from a crime; and.
o The thing to be delivered by stipulation.
6. What rights are given by law to the creditor in case the debtor fails to comply with his obligation to
deliver a specific thing?
Answer: If the debtor fails to comply, the creditor has the right to have the obligation performed by
himself, or by another, unless personal considerations are involve, at the debtor's expense and to recover
damages.
7. What are included to be delivered in an obligation to give a definite thing? Explain them.
Answer: The obligation includes the delivery of all its accessions and accessories. Accessions are the
fruits of a thing or additions to or improvements upon a thing and accessories are things included with
the principal for the latter’s embellishment, better use, or completion of a thing.
8. Suppose the obligation of the debtor is to do something and he fails to do it or performs it in

contravention of the agreement, what are the remedies available to the creditor?
Answer: If the debtor performs contrary to terms, it may be ordered by court to undo the same at the
expense of the debtor
9. Can a debtor be put in delay and consequently, incur liability even without demand from creditor?
Explain.
Answer: No. If the creditor does not demand, then it is presumed that he is giving the debtor an extension
of time and the latter in not liable for damages.
10. May an action arising from fraud be waived? Explain.

Answer: If the creditor, with full knowledge of the fraud committed by the debtor, decides to waive his
right to indemnity, then it is considered asan act of forgiveness by the former to the latter. Waiver is void
only when it is a waiver of an action for future fraud.
LAW ON OBLIGATIONS AND CONTRACTS
TEST BANK
INTRODUCTION
1. The kind of obligation defined in Article 1156 of the Civil Code is called:
a. Natural obligation
b. Civil obligation
c. Moral obligation
d. Parental obligation
2. An obligation exclusively based on positive law and enforceable in court:

a. civil obligation
c. moral obligation
d. mixed obligation
3. If a creditor’s right of action to collect based on a written contract has prescribed after 10 years from the time
the action has accrued, the civil obligation of the debtor is converted into:
a. civil obligation
c. moral obligation
d. mixed obligation
4. The definition of obligation emphasized the obligation of the obligor or debtor and implies the correlative
right of the oblige or creditor to:
a. sign the contract
b. demand the performance of the act or conduct
c. rescind the contract
d. honor his recirprocal obligation
5. It is an essential element of obligation which is the efficient cause established by the various sources of
obligations:
a. vinculum juris or juridical tie
b. juridical capacity
c. prestation, object or conduct
d. active and passive subjects
6. In an agreement between the seller and the buyer whereby the former will buy from the latter a specific thing
for P1,000, what is the efficient cause or juridical tie:
a. to give the specific thing
b. to pay the price
c. agreement
d. purchase of the specific thing
7. Obligations governed primarily by the agreement of the parties:

a. Those arising from law
b. Those arising from quasi-contracts
c. Those arising from contracts
d. Those arising from quasi-delicts
8. The following are essential elements of a valid object or prestation, except:

a. must be determinate or specific or at least determinable
b. must be physically or legally possible
c. must have an economic value or be capable of pecuniary estimation or possible equivalent in money
d. none of the above
9. Form is a requisite only of obligation

a. arising from law
b. arising from quasi-contracts
c. arising from solemn contracts (e.g. donation)
d. arising from quasi-delict
10. The obligee is also called:

a. Active subject
b. Juridical tie
c. Prestation
d. Passive subject
11. The creditor is also called:
a. Active subject
b. Juridical tie
c. Prestation
d. Passive subject
12. This is not an element of a civil obligation:
a. Parties
b. Juridical tie
c. Prestation
d. All of the above are elements of civil obligation
13. This is the reason for the existence of the obligation
a. Active subject
b. Juridical tie
c. Prestation
d. Passive subject
14. This will NOT result to a civil obligation:
a. Riding a jeepney
b. Excess in the change given by a saleslady
c. Break up between boyfriend and girlfriend
d. Stealing something
15. This will result to a civil obligation:
a. Failure to return a borrowed item from a friend

b. Not liking the food ordered in a fast food chain because of its taste
c. Failure to follow parent’s command to help in the household chores
d. Refusal to share notes with a classmate
16. Quasi-contracts are those legal relations that:

d. Result from fault or negligence
17. Quasi-delicts are those legal relations that:

d. Result from fault or negligence, there being no pre-existing contract between the parties
18. Obligation derived from this source of obligations is not presumed and must expressly provided by the Civil
Code or special laws in order to be demandable:
a. law or ex lege
19. Obligations arising from this source of obligations have the force of law between the contracting parties and
should be complied with in good faith:
a. law or ex lege
20. A source of obligation, which is a legal fiction of legal relation resulting from lawful, unilateral and voluntary
act where there is no existing contract:
a. law or ex lege
21. It is an extra-contractual obligation where an officious manager voluntarily takes over an abandoned or
neglected property or business without authority of the owner:
a. negotiorum gestio
b. solution indebiti
c. quantum meruit
d. res ipsa loquitor
22. As a general rule, every person criminally liable for a felony is:
a. likewise liable for exemplary damages

b. also civilly liable
c. generally not civilly liable
d. discharged from payment of civil liability
23. In case of material damage or injury, the liability of a convicted person includes:
a. restitution
b. reparation
c. indemnification
d. all of the above
24. It is an act or omission which causes damage to another, there being fault or negligence and there being
no pre-existing contractual relation between the parties:
a. contract
b. quasi-contract
c. crime
d. quasi-delict
25. A source of obligation where it is not the act or omission which gives rise to the obligation, but the want of
care required from the circumstances:
a. contract
b. quasi-contract
c. crime
d. quasi-delict
NATURE AND EFFECT OF OBLIGATIONS
26. A person who is obliged to give something is:

a. Required to take care of the thing he will deliver diligently at all times
b. Required to take care of the thing he will deliver diligently if the thing is determinate only
c. Is not required to do something at all
d. Liable for damages if the thing is lost all the time
27. D and C agreed that prior to the delivery of D’s dog Blackie, D should keep it in the dog house, feed it four
times a day, give it a bath five times a week and make it stroll every morning for at least one hour. D should
therefore, take care of Blackie:
a. With ordinary care
b. According to law
c. According to stipulation
d. With proper diligence of a good father of the family
ART. 1163. EVERY PERSON OBLIGED TO GIVE SOMETHINg IS ALSO OBLIGED TO TAKE CARE OF IT
WITH THE PROPER DILIGENCE OF A GOOD FATHER OF A FAMILY UNLESS THE LAW OR THE
STIPULAITON OF THE PARTIES REQUIRES ANOTHER STANDARD OF CARE.
28. This is a determinate thing:

a. A kilo of “dinorado” rice
b. A pet dog Labrador
c. Ballpen you are using right now
d. Mobile phone Samsung Galaxy
29. The following are the rights available to a creditor in obligations to give a determinate thing:
a. To compel specific performance
b. To recover damages in case of breach.
d. All of the above
30. The following are the rights available to a creditor in obligations to give a generic thing:
a. To ask for performance of the obligation.
b. To ask that the obligation be complied with at the expense of the debtor.
d. Only letter (a) and (b)
Art. 1164. The creditor has a right to the fruits of the thing from the time the obligation to deliver it arises.
However, he shall acquire no real right over it until the same has been delivered to him.
Art. 1165. When what is to be delivered is a determinate thing, the creditor, in addition to the right granted him
by Article 1170, may compel the debtor to make the delivery.
If the thing is indeterminate or generic, he may ask that the obligation be complied with at the expense of the
debtor.
If the obligor delays, or has promised to deliver the same thing to two or more persons who do not have the
same interest, he shall be responsible for any fortuitous event until he has effected the delivery.
Art. 1166. The obligation to give a determinate thing includes that of delivering all its accessions and
accessories, even though they may not have been mentioned.
The following are the rights available to a creditor in obligations to give:
If it is a determinate thing:
a. To compel specific performance (ART. 1165)
b. To recover damages in case of breach. (ART. 1170)
c. Acquires personal right to the fruits of the thing from the time the obligation to deliver arises (ART. 1164)
d. Acquires real right over the thing once the thing has been delivered to him. (ART. 1164)
e. Rights over the accessories and accessions. (ART. 1166)
If it is a generic thing:
1. To ask for performance of the obligation. (ART. 1165)
2. To ask that the obligation be complied with at the expense of the debtor. (ART. 1165)
Duties of debtor in obligation to deliver a generic thing.
They are:
1. To deliver a thing which is of the quality intended by the parties taking into consideration the purpose of the
obligation and other circumstances (see Art. 1246.); and
2. To be liable for damages in case of fraud, negligence, or delay, in the performance of his obligation, or
contravention of the tenor thereof. (see Art. 1170.)
A determinate thing is one that is particularly designated or physically segregated from all others of the same
class. (Article 1460, Civil Code of the Philippines)
A generic thing is one whose determination is confined to that of its nature, to the genus to which it pertains
such asa horse, a chair.( De Leon vs. Soriano, 87 Phil. 196).
31. If the debtor is already delayed:
a. He is liable for damages even if the thing was lost due to fortuitous event
b. He is not liable for damages if the thing was lost due to fortuitous event
c. He is not liable for damages all the times
d. He is liable for damages all the times
Art. 1165. When what is to be delivered is a determinate thing, the creditor, in addition to the right granted him
by Article 1170, may compel the debtor to make the delivery.
If the thing is indeterminate or generic, he may ask that the obligation be complied with at the expense of the
debtor.
If the obligor delays, or has promised to deliver the same thing to two or more persons who do not have the
same interest, he shall be responsible for any fortuitous event until he has effected the delivery.
32. It the obligation is to give a mobile phone and there was no agreement:
a. The debtor should also give the mobile phone charger

b. The debtor is not obliged to give the mobile phone charger
c. The debtor should only give the mobile phone charger if it was asked from him
d. The debtor should not only give the mobile phone charger but also the headphone and other
accessories, if any
Art. 1166. The obligation to give a determinate thing includes that of delivering all its accessions and
accessories, even though they may not have been mentioned.
1) Accessions - fruits of, or additions to, or improvements upon, a thing (the principal), e.g., house or trees on a
land; rents of a building; aircon in a car; profits or dividends accruing from shares of stocks; etc.
(2) Accessories - things joined to, or included with, the principal thing for the latter’s embellishment, better use,
or completion, e.g., key of a house; frame of a picture; bracelet of a watch; machinery in a factory; bow of a
violin.
DIFFERENCE - Accessions are NOT NECESSARY to the principal thing. Accessory and the principal thing
MUST GO TOGETHER.
Both accessions and accessories can exist only in relation to the principal.
33. The creditor in an obligation to do has the right to:
a. Ask the debtor to perform the obligation

b. Ask the debtor who fails to perform the shall obligation to pay the person who executed the obligation
c. Ask the debtor who contrived the tenor of the obligation or have done the work poorly to pay
d. All of the above
Art. 1167. If a person obliged to do something fails to do it, the same shall be executed at his cost.
This same rule shall be observed if he does it in contravention of the tenor of the obligation. Furthermore, it
may be decreed that what has been poorly done be undone. (1098)
34. Delay occurs when:
a. The date of payment arrive

b. The creditor demand for the fulfillment of the obligation
c. Anytime
d. The day after the date of payment agreed upon
35. A and B entered into a contract stating that A shall pay B P100,000.00 on or before Christmas Day of 2018
without need of demand. Supposing that after Christmas 2018, A has not yet paid B and that B has yet to
make any demand from A to pay. In this case:
a. A is no longer liable to pay B P100,000
b. A is still liable to pay B P100,000
c. A is liable to pay B damages only
d. A is liable to pay B P100,000 plus damages
36. This will not result to liability for damages:
a. Fraud
b. Delay
c. Performance not according to what was agreed upon
d. All of the above will result to liability for damages
Art. 1169. Those obliged to deliver or to do something incur in delay from the time the obligee judicially or
extrajudicially demands from them the fulfillment of their obligation.
However, the demand by the creditor shall not be necessary in order that delay may exist:
(1) When the obligation or the law expressly so declare; or
(2) When from the nature and the circumstances of the obligation it appears that the designation of the time
when the thing is to be delivered or the service is to be rendered was a controlling motive for the establishment
of the contract; or
(3) When demand would be useless, as when the obligor has rendered it beyond his power to perform.
In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a
proper manner with what is incumbent upon him. From the moment one of the parties fulfills his obligation,
delay by the other begins.
Art. 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those
who in any manner contravene the tenor thereof, are liable for damages.
KINDS OF OBLIGATIONS
37. The following are primary classes of obligations except:
a. pure and conditional

b. alternative and facultative
c. real and personal
d. joint and solidary
38. An obligation that does not depend on any condition is called
a. Facultative
b. Alternative
c. Resolutory
d. Pure
39. This is demandable at once:
a. Obligation that is based on a suspensive condition

b. Obligation that is based on a resolutory condition
c. Obligation with a period
d. Joint obligation
40. These kinds of obligations are demandable at once except:
a. Pure obligation
b. Obligations which contains a resoutory condition
c. Facultative Obligations
Art. 1179. Every obligation whose performance does not depend upon a future or uncertain event, or upon a
past event unknown to the parties, is demandable at once.
Every obligation which contains a resolutory condition shall also be demandable, without prejudice to the
effects of the happening of the event.
41. A got a loan worth P100,000.00 from B. A binds himself to pay B when his financial condition would allow
him to do so. A’s obligation to pay B in this case is:
a. An example of a pure obligation
b. An example of an obligation with a potestative condition
c. An example of an obligation with a period
d. An example of an obligation with a resolutory condition
Art. 1180. When the debtor binds himself to pay when his means permit him to do so, the obligation shall be
deemed to be one with a period, subject to the provisions of Article 1197.
42. This is void:

a. Suspensive condition
b. Facultative condition
c. Unilateral condition
d. Potestative condition
43. An event that is both future and uncertain upon which the existence or extinguishment of an obligation is
made to depend is called:
a. Fortuitous event
b. Condition
c. Period
d. Day certain
44. A past event may be considered a condition:

a. False since a condition must be something that will happen in the future
b. False since an event that has happened in the past cannot be condition
c. True only if that past event is unknown to both parties
d. True even if the past event is known to one party as long as it is still unknown to the other party
45. A and B had an agreement where A is obliged to give something to B. The obligation is based on C
passing the CPA Board Exam. In this case:
a. A’s obligation is based on a casual condition and is valid

b. A’s obligation is based on a potestative condition and is not valid
c. A’s obligation is based on a mixed condition and is not valid
d. A’s obligation is based on a casual condition and is not valid
Art. 1181. In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those
already acquired, shall depend upon the happening of the event which constitutes the condition.
Art. 1182. When the fulfillment of the condition depends upon the sole will of the debtor, the conditional
obligation shall be void. If it depends upon chance or upon the will of a third person, the obligation shall take
effect in conformity with the provisions of this Code.
(i) Suspensive v. resolutory conditions:
Suspensive Condition– the happening of which gives rise to an obligation
Resolutory Condition – the happening of which extinguishes the obligation
(ii) Potestative, casual and mixed conditions:
Potestative condition – where the fulfillment depends upon one‘s will (either the debtor, creditor or a third
person)
Casual condition – when the fulfillment of the condition depends upon chance
Mixed condition – when the fulfillment of the condition depends partly upon the creditor and or a third party
(iii) Impossible conditions
Impossible Condition – that which is not capable of fulfillment because it is contrary to the law of nature or
contrary to law, morals, public order or public policy.
46. Obligations based on this condition is annulled:
a. Impossible condition
b. Condition contrary to good customs or public policy
c. Condition that is prohibited by law
d. All of the above
47. If A binds himself to give B P1,000 if B will cause harm to C, the:
48. If A binds himself to give B P1,000 if B will not cause harm to C, the:
Note – “will not cause harm” Negative impossible thing
Art. 1183. Impossible conditions, those contrary to good customs or public policy and those prohibited by law
shall annul the obligation which depends upon them. If the obligation is divisible, that part thereof which is not
affected by the impossible or unlawful condition shall be valid.
The condition not to do an impossible thing shall be considered as not having been agreed upon.
49. An obligation where only one of the parties is bound to fulfill a prestation:
a. Personal
b. Divisible
c. Unilateral
d. Joint
50. Obligations arising from the same cause where each party is a debtor and a creditor of the other:
a. Solidary
b. Pure
c. Alternative
d. Reciprocal
51. This is when the debtor is bound by different prestations:

a. Alternative obligation
b. Facultative obligation
c. Joint obligation
d. Solidary obligation
52. This is when the debtors answer only for their part:
a. Joint obligation
b. Solidary obligation
c. Facultative obligation
d. Alternative obligation
53. Juan and Maria had an agreement that Juan will give his car to Maria if she will graduate cum laude in April
2012. In her last semester, Maria got a failing grade that makes her ineligible for graduation in April 2012. In
this case:
a. Juan should take care of the car until April 2012 for Maria since the obligation is to deliver a
determinate thing
b. Juan may sell his car to Pedro without waiting for April 2012
c. Juan may be forced to deliver to Maria the car only after graduation
d. Juan may be forced to give the car to Maria since the car is considered owned by Maria at the time of their
agreement
Art. 1184. The condition that some event happen at a determinate time shall extinguish the obligation as soon
as the time expires or if it has become indubitable that the event will not take place.
54. A obliged to give B P100,000 if B’s favorite basketball team will not win the championship. The legal
consequence of this agreement is:
a. A should pay B P100,000 if the basketball team loses the championship

b. A should pay B even before another team wins championship if the team was eliminated from the finals
c. A should pay B the moment it becomes evident that the team will not win the championship for whatever
reason
d. All of the above
Art. 1185. The condition that some event will not happen at a determinate time shall render the obligation
effective from the moment the time indicated has elapsed, or if it has become evident that the event cannot
occur.
If no time has been fixed, the condition shall be deemed fulfilled at such time as may have probably been
contemplated, bearing in mind the nature of the obligation.
55. There is constructive fulfillment of a condition when:

a. The obligor voluntarily prevents the fulfillment of a suspensive condition or condition precedent
b. The obligor voluntarily prevents the fulfillment of a resolutory condition or condition subsequent
c. There is impossible condition
Art. 1186. The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment.
56. Mario borrowed the laptop of Trixie. The agreement was for Mario to return the laptop to Trixie next
Monday. Unfortunately, a fire that occurred on Sunday gutted Mario’s house. Mario was not able to save the
laptop of Trixie because the fire was so sudden. In this case:
a. Mario should pay the value of the laptop to Trixie but without interest
b. Mario should pay the value of the laptop to Trixie subject to interest
c. Mario should pay the value of the laptop to Trixie and damages because there are important files in
the said laptop belonging to Trixie
d. Mario is not liable to pay Trixie
57. Joey is indebted to Maricel in the amount of P10,000.00. Maricel gave Joey the option to just give to her his
used cellphone amounting to P5,000.00 instead of paying the amount of his indebtedness. Joey has yet to
make up his mind what to give to Maria when he negligently lost his cellphone. In this case:
a. Joey is liable to Maricel of damages because he was negligent

b. Joey is not liable to Maricel of damages even if he was negligent
c. Joey is no longer liable to pay Maricle his debt amounting to P10,000.00
d. Joey is only liable to Maria in the amount of P5,000.00
58. A promised to deliver his car with plate number XXX111 to B on the condition that B will graduate with
honors. The legal effect of such agreement is:
a. A is relieved from the obligation if the car was lost due to fortuitous event before B’s graduation.
b. A will be liable to B if the car was lost due to the fault of A.
c. A should pay for the repair of the car if the car was damaged due to A’s fault.
d. All of the above
59. A certain diamond ring owned by Mrs. Cruz was stolen the night before Mrs. Cruz deliver the same to Mrs.
Santos based on their agreement. In this case:
a. The diamond ring is considered lost
b. Mrs. Cruz is liable to pay Mrs. Santos damages
c. Mrs. Cruz is still liable to deliver the diamond ring to Mrs. Cruz
d. All of the above
60. A promised to give his cellphone to B on condition that B will graduate with honors. The legal consequence
if the cellphone deteriorates would be:
a. A’s obligation is extinguished regardless whether A was at fault or not
b. B will bear the cost of the repair of the cellphone if the deterioration was not due to A’s fault
c. A cannot rescind the obligation regardless whether the deterioration is due to A’s fault or not
Art. 1189. When the conditions have been imposed with the intention of suspending the efficacy of an
obligation to give, the following rules shall be observed in case of the improvement, loss or deterioration of the
thing during the pendency of the condition:
(1) If the thing is lost without the fault of the debtor, the obligation shall be extinguished;
(2) If the thing is lost through the fault of the debtor, he shall be obliged to pay damages; it is understood that
the thing is lost when it perishes, or goes out of commerce, or disappears in such a way that its existence is
unknown or it cannot be recovered;
(3) When the thing deteriorates without the fault of the debtor, the impairment is to be borne by the creditor;
(4) If it deteriorates through the fault of the debtor, the creditor may choose between the rescission of the
obligation and its fulfillment, with indemnity for damages in either case;
(5) If the thing is improved by its nature, or by time, the improvement shall inure to the benefit of the creditor;
(6) If it is improved at the expense of the debtor, he shall have no other right than that granted to the
usufructuary.
Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not
comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of
damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should
become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing, in
accordance with Articles 1385 and 1388 and the Mortgage Law. (1124)
Art. 1192. In case both parties have committed a breach of the obligation, the liability of the first infractor shall
be equitably tempered by the courts. If it cannot be determined which of the parties first violated the contract,
the same shall be deemed extinguished, and each shall bear his own damages.
62. A is bound to pay B P100,000 on or before June 1, 2020. A believing that the obligation is due paid B the
entire amount. In this case:
a. A cannot recover from the amount.

b. A may recover from B the amount paid.
c. A may recover from B the entire amount with interest.
d. None of the above.
Art. 1195. Anything paid or delivered before the arrival of the period, the obligor being unaware of the period or
believing that the obligation has become due and demandable, may be recovered, with the fruits and interests.
63. In an obligation with a period, the period is:
a. For the benefit of the debtor only

b. For the benefit of the creditor only
c. For the benefit of both the debtor and the creditor
Art. 1196. Whenever in an obligation a period is designated, it is presumed to have been established for the
benefit of both the creditor and the debtor, unless from the tenor of the same or other circumstances it should
appear that the period has been established in favor of one or of the other.
64. The debtor shall lose his right to make use of the period when:
a. When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty or
security for the debt.
b. When he does not furnish to the creditor the guaranties or securities which he has promised.
c. When by his own acts he has impaired said guaranties or securities after their establishment, and when
through a fortuitous event they disappear, unless he immediately gives new ones equally satisfactory.
Art. 1198. The debtor shall lose every right to make use of the period:
(1) When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty or
security for the debt;
(2) When he does not furnish to the creditor the guaranties or securities which he has promised;
(3) When by his own acts he has impaired said guaranties or securities after their establishment, and when
through a fortuitous event they disappear, unless he immediately gives new ones equally satisfactory;
(4) When the debtor violates any undertaking, in consideration of which the creditor agreed to the period;
(5) When the debtor attempts to abscond.
65. A is bound to give B any of the following,P10,000 in cash, his Labrador dog, or his cellphone. In this case:
a. A can compel B to accept part in cash and another dog.
b. A has the right to choose which one to deliver unless there was an agreement to the contrary.
c. B has the right to choose which on
c. B has the right to choose which one should A deliver unless there was an agreement to the contrary.
d. None of the above. *
Art. 1199. A person alternatively bound by different prestations shall completely perform one of them.
The creditor cannot be compelled to receive part of one and part of the other undertaking.
Art. 1200. The right of choice belongs to the debtor, unless it has been expressly granted to the creditor.
The debtor shall have no right to choose those prestations which are impossible, unlawful or which could not
have been the object of the obligation.
Art. 1201. The choice shall produce no effect except from the time it has been communicated.
66. Tito, Vic and Joey are liable to Jose jointly and severally in the amount of P30,000.00. In this case:
a. Jose can ask Tito to pay the entire amount

b. Jose cannot ask Tito to pay the entire amount
c. Jose should ask the three, Tito, Vic and Joey to pay if she wants to be paid the entire amount
d. Jose can ask his debtors to pay their respective share only
67. Pilo and Steph are solidarily obliged to give Minda a specific car worth P500,000.00. The car was lost
because of the fault of Steph. Hence, Minda asked them to pay the amount of P500,000.00. Pilo is ready to
pay his share but Steph cannot. In this case:
a. Minda can compel Pilo to pay the entire amount

b. Minda cannot compel Pilo to pay the entire amount
c. Pilo is relieved from his obligation because the car was lost due to Steph’s fault
d. The obligation to deliver the car was extinguished because Pilo had nothing to do with the loss
68. Ronnie hired Allan to forcibly get Ging’s necklace. They agreed that if Allan will fail in his mission, he
should pay Ronnie P5,000.00. In this case:
a. Allan can just pay P5,000 if he does not want to do the act of getting Ging’s necklace
b. Allan should pay Ronnie P5,000 is he fails to get Ging’s necklace
c. Allan can refuse to do what Ronnie asks him to do and also refuse to pay the P5,000
d. Allan cannot refuse to do what Ronnie asks him to do because of his contract with Ronnie
69. Chona wanted to buy a new cellphone. Her friend Regidor knew about it and wanted to impress Chona. So
he bought the exact model of the cellphone Chona wanted to buy. He did it without Chona’s consent. Unknown
to Regidor, Chona could have availed of 25% discount from a seller. In this case:
a. Chona should pay the entire amount to Regidor
b. Chona is only liable to pay 75% of the amount of the cellphone
c. Chona is only liable to pay 25% of the amount of the cellphone
d. Chona is not liable at all to Regidor
70. Troy is indebted to James in the amount of P50,000. As a security, Troy offered his diamond-embedded
ring that is coveted by Missy. Missy paid the loan of Troy to James thinking that Troy will default. She did it
without Troy’s consent. In this case:
a. Missy can get Troy’s ring if he cannot pay the P50,000

b. Missy cannot get Troy’s ring even if he fails to pay
c. Troy cannot be forced to pay Missy because she paid the loan without Troy’s consent
d. Troy is only liable to give Missy the ring
71. Joshua owed Katrina P100,000 subject to 10% interest (simple interest only). Joshua paid Katrina
P20,000. How much is not Joshua’s indebtedness?
a. P100,000
b. P90,000
c. P80,000
d. P20,000
72. Jose transacts in US Dollars. She was liable to pay US$ 10,000 to XYC Company. A law was later passed
declaring it illegal to pay in US Dollars or in any other foreign currency. In this case:
a. Jose is no longer liable to XYC Company because he is release from liability when payment in US Dollars
became legally impossible
b. Jose should still pay XYC Company US$ 10,000 because that was the contract
c. Jose should pay in Philippine Peso
d. Jose was never in debt to XYC Company because the contract was not in Philippine legal tender
73. A contract is:
a. A juridical necessity to perform an obligation for another person

b. An agreement wherein at least two persons agree that they will give or do something for the other
c. A choice to give, to do or not to do
d. A meeting of minds between two persons whereby one will pay a sum of money to the other person
Art. 1305. A contract is a meeting of minds between two persons whereby one binds himself, with respect to
the other, to give something or to render some service.
74. The parties to a contract:
a. Are free to stipulate on the terms and conditions of the contract subject to certain limitation
b. Are free to stipulate on the terms and conditions of the contract without any limitation at all
c. Are not free to stipulate on the terms and conditions in all cases
d. Are not free to stipulate on the terms and conditions in certain cases
75. An autocontract is:
a. A contract where two distinct persons enter into it

b. A contract were one person contracts with himself or herself
c. A contract where a party has already a prepared form of contract and the other party just have to take it or
leave it
d. A contract where only one of the parties has an obligation
76. Contracts may be classified according to its importance or dependence on another contract as follows:
a. Onerous, gratuitous or remunerative contracts

b. Principal, accessory or preparatory contracts
c. Nominate or innominate contracts
d. Consensual, real or formal contracts
77. A contract wherein only one of the parties has an obligation is called:
a. Unilateral contract
b. Bilateral contract
c. Commutative contract
d. Aleatory contract
Art. 1306. 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.
78. This is NOT generally required in order to make a contract valid:
a. Consent of the parties

b. Object of the contract
c. Cause of the contract
d. Specific form of the contract
Art. 1318. There is no contract unless the following requisites concur:
(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established.
79. The meeting of the offer and the acceptance is called:
a. Consent
b. Cause
c. Communication
d. Consideration
80. Consent in a contract means:
a. The offer of one of the parties

b. The acceptance of the offer subject to a certain condition
c. The offer of several options
d. The meeting of the offer and acceptance
81. Mario is trying to sell to Trixie his merchandise. He is offering his laptop to Trixie for P20,000.00. Trixie
asked Mario for a discount. Mario responded that he will ask his boss if he can lower the price. In this case:
a. The contract of sale is perfected

b. There is a contract of sale but it is unenforceable
c. There is no contact yet
d. Trixie should pay Mario the entire amount of P20,000.00
Art. 1319. Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause
which are to constitute the contract. The offer must be certain and the acceptance absolute. A qualified
acceptance constitutes a counter-offer.
Acceptance made by letter or telegram does not bind the offerer except from the time it came to his
knowledge. The contract, in such a case, is presumed to have been entered into in the place where the offer
was made.
82. Tony offered to Paula his 20 moblie phones for P10,000.00 each. Paula answered that she is willing to buy
the cellphone, for the price but just 15 pieces. Is the contract perfected:
a. No, because there is a qualified acceptance which constitutes an offer by the buyer
b. Yes, because there perfected sale because the number of pieces is merely incidental and the items are
divisible and capable of partial delivery
c. Yes, because there was already acceptance
d. No, because the offer is not yet certain
83. A qualified acceptance constitutes:
a. Acceptance
b. Counter-offer
c. Meeting of the minds
d. All of the above
Art. 1319. Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause
which are to constitute the contract. The offer must be certain and the acceptance absolute. A qualified
acceptance constitutes a counter-offer.
Acceptance made by letter or telegram does not bind the offerer except from the time it came to his
knowledge. The contract, in such a case, is presumed to have been entered into in the place where the offer
was made.
Art. 1320. An acceptance may be express or implied.
84. The principle that states that the contract is binding only between the parties is known as:
a. Relativity
b. Mutuality
c. Obligatory force
d. Freedom to stipulate
Art. 1308. The contract must bind both contracting parties; its validity or compliance cannot be left to the will of
one of them.
85. The principle that states that the contract takes effect only between their assigns and heirs is known as:
a. Relativity
b. Mutuality
c. Obligatory force
d. Freedom to stipulate
86. Allan borrowed money from XYZ Corporation. The loan was subject to an interest rate. XYZ Corporation
wants now to increase the interest rate without the consent of Allan. Allan, in this case, may protest such action
of XYZ Corporation by citing:
a. Principle of autonomy of contracts

b. Principle of mutuality of contracts
c. Principle of relativity of contracts
d. Principle that parties can stipulate as long as it is not contrary to law, morals, good customs, public policy,
and public order
Art. 1311. Contracts take effect only between the parties, their assigns and heirs, except in case where the
rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by
provision of law. The heir is not liable beyond the value of the property he received from the decedent.
If a contract should contain some stipulation in favor of a third person, he may demand its fulfillment provided
he communicated his acceptance to the obligor before its revocation. A mere incidental benefit or interest of a
person is not sufficient. The contracting parties must have clearly and deliberately conferred a favor upon a
third person.
87. Contracts that are perfected by delivery of the object of the obligation is called:
a. Consensual contract
b. Real contract
c. Delivery contract
d. Obligatory contract
Art. 1316. Real contracts, such as deposit, pledge and Commodatum, are not perfected until the delivery of the
object of the obligation.
88. A owns a property for rent which was leased by B to C without A’s consent. In case A later ratifies to
contract, the contract of lease is:
a. Valid
b. Void
c. Voidable
d. Unenforceable
89. A owns a property for rent which was leased by B to C without A’s consent. In this case, the contract of
lease is:
a. Valid
b. Void
c. Voidable
d. Unenforceable
Art. 1317. No one may contract in the name of another without being authorized by the latter, or unless he has
by law a right to represent him.
A contract entered into in the name of another by one who has no authority or legal representation, or who has
acted beyond his powers, shall be unenforceable, unless it is ratified, expressly or impliedly, by the person on
whose behalf it has been executed, before it is revoked by the other contracting party.
90. A offered to sell his favorite car to B for P400,000. Before B was able to accept the offer, A died of sudden
heart attack. In this case:
a. The heirs of A is obliged to sell the car to B

b. The heirs of A is not obliged to sell the car to B
c. B is obliged to buy the car
Art. 1323. An offer becomes ineffective upon the death, civil interdiction, insanity, or insolvency of either party
before acceptance is conveyed.
91. A offered to sell his favorite car to B for P400,000. A gave B one week to accept the offer or the car will be
sold to another. In this case:
a. A cannot withdraw his offer to B before the lapse of one week

b. A can withdraw his offer to B after the lapse of one week
c. A can withdraw his offer to B even after the lapse of one week
92. A offered to sell his favorite car to B for P400,000. A gave B one week to accept the offer or the car will be
sold to another. For this period, B paid A P2,500. In this case:
a. A cannot withdraw his offer to B before the lapse of one week

b. A can withdraw his offer to B after the lapse of one week
c. A can withdraw his offer to B even after the lapse of one week
Art. 1324. When the offerer has allowed the offeree a certain period to accept, the offer may be withdrawn at
any time before acceptance by communicating such withdrawal, except when the option is founded upon a
consideration, as something paid or promised.
93. This person cannot give consent to a contract:
a. A, a 14 year old boy

b. B, a 27 year old insane person
c. C, a 34 year of deaf-mute
d. All of the above
94. Who among the following cannot give consent to a contract:
a. John, who is deaf and mute

b. Rebecca, who is 18 years old
c. Connie, who is in lucid interval
d. All of them may give consent to a contract
Art. 1327. The following cannot give consent to a contract:

(1) Unemancipated minors;
(2) Insane or demented persons, and deaf-mutes who do not know how to write.
95. A contract entered by A, who was drunk at the time of the contract and B who was in a normal state of
mind is:
a. Valid
b. Void
c. Voidable
d. Unenforceable
Art. 1328. Contracts entered into during a lucid interval are valid. Contracts agreed to in a state of drunkenness
or during a hypnotic spell are voidable.
Art. 1329. The incapacity declared in Article 1327 is subject to the modifications determined by law, and is
understood to be without prejudice to special disqualifications established in the laws. (1264)
Art. 1330. A contract where consent is given through mistake, violence, intimidation, undue influence, or fraud
is voidable. (1265a)
96. A needed a vehicle that can ride at least 10 persons as his family planned to go to Sagada. B offered his
vehicle for hire. A accepted the offer. When B delivered the car on the agreed date, A saw that the car can ride
only 8 persons including the driver. In this case, the contract between A and B is:
a. Valid
b. Void
c. Voidable
d. Unenforceable
Art. 1331. In order that mistake may invalidate consent, it should refer to the substance of the thing which is
the object of the contract, or to those conditions which have principally moved one or both parties to enter into
the contract.
Mistake as to the identity or qualifications of one of the parties will vitiate consent only when such identity or
qualifications have been the principal cause of the contract.
A simple mistake of account shall give rise to its correction.
97. A participated in a public auction of several items for sale conducted by a private auction firm. The sale
was “as is where is basis.” A participated in a bidding for certain item which he thought will be useful for his
business. It turned out that the items have no longer economic use. It this case:
a. There was no mistake and the contract of sale is perfectly valid
b. There was a mistake in this case and A is allowed to invalidate the sale
c. There was no mistake but A can still refund whatever he paid for the items
Art. 1333. There is no mistake if the party alleging it knew the doubt, contingency or risk affecting the object of
the contract.
98. When one party in a contract employed serious or irresistible force in order to wrest consent, there is:
a. Fraud
b. Violence
c. Intimidation
d. Undue influence
99. When one party in a contract was 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, there is:
a. Fraud
b. Violence
c. Intimidation
d. Undue influence
100. Pilo was caught stealing the laptop of Steph. Because the laptop was damaged due to Pilo’s act, Steph
asked Pilo pay her P30,000.00 or else, Steph will sue Pilo and would send him to jail. Pilo signed a contract to
this effect. Later, he said that he acted with fear because of the intimidation employed by Steph. In this case:
a. The contract is voidable
b. The contract is unenforceable
c. The contract is valid
d. The contract is void

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Republic of the Philippines

SULTAN KUDARAT STATE UNIVERSITY

Name Course/Year/Section: Score:

TRUE 1. A joint creditor cannot act in representation of the others.

II. Multiple Choice. Encircle the letter of the best answer.

XXX End of Examination XXX

ARIANNE JOY A. PURAZO, CPA, MPA

ROBERT A. DEMAFILES, CPA, MBA, CAT

LAW ON OBLIGATIONS AND CONTRACTS

2. An obligation exclusively based on positive law and enforceable in court:

7. Obligations governed primarily by the agreement of the parties:

8. The following are essential elements of a valid object or prestation, except:

9. Form is a requisite only of obligations:

a. arising from law

10. The obligee is also called:

11. The creditor is also called:

12. This is not an element of a civil obligation:

13. This is the reason for the existence of the obligation

14. This will NOT result to a civil obligation:

15. This will result to a civil obligation:

16. Quasi-contracts are those legal relations that:

17. Quasi-delicts are those legal relations that:

NATURE AND EFFECT OF OBLIGATIONS

26. A person who is obliged to give something is:

28. This is a determinate thing:

31. If the debtor is already delayed:

33. The creditor in an obligation to do has the right to:

34. Delay occurs when:

a. A is no longer liable to pay B P100,000

37. The following are primary classes of obligations except:

a. pure and conditional

38. An obligation that does not depend on any condition is called

39. This is demandable at once:

a. Obligation that is based on a suspensive condition

40. These kinds of obligations are demandable at once except:

a. An example of a pure obligation

42. This is void:

44. A past event may be considered a condition:

46. Obligations based on this condition is annulled:

47. If A binds himself to give B P1,000 if B will cause harm to C, the:

51. This is when the debtor is bound by different prestations:

a. A should pay B P100,000 if the basketball team loses the championship

a. Joey is liable to Maricel of damages because he was negligent

a. A cannot recover from the amount.

a. For the benefit of the debtor only

a. A can compel B to accept part in cash and another dog.

a. Jose can ask Tito to pay the entire amount

a. Minda can compel Pilo to pay the entire amount

a. Chona should pay the entire amount to Regidor

a. Missy can get Troy’s ring if he cannot pay the P50,000

73. A contract is:

a. A juridical necessity to perform an obligation for another person

74. The parties to a contract:

a. Onerous, gratuitous or remunerative contracts

78. This is NOT generally required in order to make a contract valid:

a. Consent of the parties

79. The meeting of the offer and the acceptance is called:

80. Consent in a contract means:

a. The offer of one of the parties

a. The contract of sale is perfected

83. A qualified acceptance constitutes:

TEST I: DISCUSSIONS. Answer the following questions.

8. Suppose the obligation of the debtor is to do something and he fails to do it or performs it in