POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

College of Accountancy and Finance Student Council

CAF Review
Law 20013: Law on Obligations and Contracts (Finals)

Multiple Choice
1. Resolutory condition is one which suspends the effectivity of the obligation until the
condition is fulfilled.
A person can assume an obligation in favor of another even without any contractual
relationship.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
2. A lender can recover the principal of a loan in a usurious contract even if the contract is
void as to the interest.
Payment means not only the delivery of money but also the performance, in any other
manner of an obligation.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
3. Payment made in good faith to any person in possession of the credit shall extinguish the
debtor's obligation.
All rights acquired in virtue of an obligation are transmitted in the absence of any law or
stipulation to the contrary.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
4. No person shall be responsible for events which could not be foreseen, or which, though
foreseen, were inevitable.
Responsibility arising from fraud is demandable in all obligations. Any waiver of an action
for future fraud is void.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
5. The obligation to give a determinate thing includes that of delivering all the accessions and
accessories, even though they may not have been mentioned in the agreement.
An obligation in money is a divisible obligation.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance Student Council
CAF Review
Law 20013: Law on Obligations and Contracts (Finals)

6. In facultative compensation, the debtor is legally allowed to have the two obligations set-off.
Debtor obliges himself to pay Creditor P500,000 on or before December 31, 2009 on
demand. In this case the period is established for the benefits of the debtor.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
7. After substitution in facultative obligations, the loss of the principal through the fault or
negligence of the debtor shall render him liable for damages in favor of the creditor.
In an obligation subject to a suspensive period, what is suspended is the birth of the
obligation.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
8. In culpa contractual, negligence on the part of the debtor must be first proved by the
injured person in order to be awarded with damages.
The owner and operator of a taxicab who had been negligent while driving the cab can be
held liable for damages for injuries sustained by his passenger based on culpa aquiliana.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
9. Delay or mora is defined as the failure of the debtor to observe the required standard of
care required by the nature of the obligation taking into consideration the circumstances of
time, person event and place.
D obliged himself to give C P1,000,000 if the latter would not kill X, a third person. In this
case, both the condition as well as the obligation is void.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
10. A natural obligation is a valid obligation.
Future fraud on the part of the debtor can be waived.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance Student Council
CAF Review
Law 20013: Law on Obligations and Contracts (Finals)

11. Remission of an obligation obtained by one of the solidary debtors shall entitle him to get a
share from his co-debtors by way of reimbursement.
D obliged himself "to pay to C the sum of P50,000 which he owes him when he (D) feels like
it". This kind of obligation is valid and legally enforceable.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
12. Payment of debtor's obligation may be made by a third person even without the knowledge
and consent of the debtor.
Payment to an incapacitated creditor is not valid, except when he has kept the thing
delivered, or insofar as the payment has been beneficial to him.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
13. An obligation with a period may at times become a pure obligation demandable at once.
Payment made by one who does not have the free disposal of the thing due and capacity to
alienate is valid.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
14. There is legal subrogation when, even without the knowledge of the debtor, a third person,
not interested in the obligation, pays the creditor.
Unless it is otherwise stipulated, the extrajudicial expenses required for the payment shall
be for the account of the creditor
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
15. Condonation or remission is generally gratuitous.
The renunciation of the principal debt shall extinguish the accessory obligations; but the
waiver of the latter shall leave the former in force.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance Student Council
CAF Review
Law 20013: Law on Obligations and Contracts (Finals)

16. A is obliged by contract to deliver a specific car to B. A is not obliged to deliver the "jack"
of the car to B because the delivery of the jack is not mentioned in the contract.
The giving of money order for the full amount of the obligation is payment.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
17. Prescription is the extinguishment of an obligation by the passage of time.
A quasi-contract does not require consent of the contracting parties.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
18. Efficient cause is the legal or juridical tie which binds the parties to the obligation.
Prestation is the object or subject matter of the obligation.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
19. Obligations arising from contracts have the force of law between the contracting parties and
should be complied with in good faith.
Without demand from the creditor, the debtor, even if he fails to perform the obligation on
the agreed date, does not incur delay.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
20. As a rule, the creditor has a right to the fruits of the thing from the time the obligation to
deliver it arises.
Payment made by a third person who does not intend to be reimbursed by the debtor is
deemed to be a donation, which requires the debtor's consent. If the debtor's consent is not
given, the obligation is not extinguished.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance Student Council
CAF Review
Law 20013: Law on Obligations and Contracts (Finals)

21. Suspensive condition is one which extinguishes the obligation upon the happening of the
condition.
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.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
22. The creditor acquires real rights over the thing from the moment the thing is delivered and
not from the time the obligation to deliver it arises.
D binds himself to pay "little by little". The obligation is for the benefit of the debtor.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
23. The concurrence of two or more debtors and two or more creditors in the same obligation is
presumed to be a solidary obligation.
Payment made by the debtor to a third person who is not the creditor shall never extinguish
the obligation.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
24. Solidarity may exist although the creditors and the debtors may not be bound in the same
manner and by same periods and conditions.
The nullity of the principal obligation does not carry with it that of the penal clause.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
25. The delivery to and acceptance by the creditor of a certified cashier's check produces
payment of the debtor's obligation.
Solidarity cannot exist if the creditors and the debtors are not bound in the same manner
and by the same periods and conditions.
A. First statement is true, second statement is false
B. First statement is false, second statement is true
C. Both statements are true
D. Both statements are false
26. When the debtor binds himself to pay when his means permit him to do so, the obligation is:
A. Conditional C. Simple
B. Pure D. With a period
 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance Student Council
CAF Review
Law 20013: Law on Obligations and Contracts (Finals)

27. Contracts which cannot be sued upon unless ratified, thus it is as if they have no effect yet
are:
A. Voidable C. Void
B. Rescissible D. Unenforceable
28. Contracts entered into in a state of drunkenness or during a hypnotic spell are:
A. Voidable C. Valid
B. Void D. Binding
29. A defective contract where damage or lesion is essential.
A. Rescissible C. Unenforceable
B. Voidable D. Void
30. Three of the following contracts are void. Which one is not?
A. Written contract contemplating impossible services.
B. Oral contract of partnership of three partners and capital contribution is more than P3,000
in cash.
C. Oral contract of partnership where real estate contract is legally in the possession of a
third person who acted in bad faith.
D. Agent's authority to sell land is given orally.
31. It is a juridical relation whereby a person may demand from another the observance of a
determinative conduct, and in case of breach, may demand satisfaction from the assets of
the latter.
A. Natural obligations C. Civil obligations
B. Moral obligations D. Contracts
32. It is he who in whose favor the obligation is constituted, established or created.
A. Active subject C. Obligor
B. Passive subject D. Debtor
33. “I promise to give you one of my phones.” What kind of object is this?
A. Generic C. Determinate
B. Specific D. Limited generic
34. A(n) ______ is an offer to do what you have agreed to do under a contract.
A. Tender C. Promise
B. Object D. Oath
35. What is another term for negotiorum gestio?
A. Mistake in payment
B. Inofficious manager
C. Unjust enrichment
D. Negotiable gesture
36. Which of the following is not a voluntary breach?
A. Mora C. Culpa
B. Dolo D. Caso fortuito
37. Which fraud is cause for annulment of the contract?
A. Causal fraud C. Future fraud
B. Incidental fraud D. Past fraud
 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance Student Council
CAF Review
Law 20013: Law on Obligations and Contracts (Finals)

38. Which is default on the part of the creditor?

A. Mora solvendi
B. Mora accipiendi
C. Compensatio morae
39. An agreement under which both parties voluntarily terminate their contract is called _____.
A. Voidable C. Mutual release
B. Void D. Right
40. This takes place when something is received when there is no right to demand it, and it was
unduly delivered through mistake.
A. Vinculum juris
B. Prestation
C. Negotiorum Gestio
D. Solutio Indebiti
41. A contract that amounts to nothing and has no legal effect is:
A. Void C. Bilateral
B. Voidable D. Unilateral
42. A(n) ________________ occurs when one party to a contract does not do what he or she
agreed to do.
A. breach C. consideration
B. fraud D. ratification
43. A minor has the right to avoid a contract.
A. True C. Maybe
B. False D. Never
44. 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.
45. When contracts eventually end, they are said to be:
A. rejected C. discharged
B. avoided D. unenforceable
46. Illegal agreements are:
A. voidable C. limited
B. void D. enforceable
47. Can a contract be ended by mutual agreement by the parties?
A. Yes C. Maybe
B. No D. Never
48. A minor who claims to be over the age of majority commits
A. fraud C. extortion
B. misrepresentation D. Larceny
49. A supports B, a minor, because B’s father refuses t support B. the father is obliged to
reimburse A. the source of obligation is;
A. Contract C. Delict
B. Quasi contract D. Quasi delict
 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance Student Council
CAF Review
Law 20013: Law on Obligations and Contracts (Finals)

50. Fruits arising out of contracts

A. Natural C. Civil
B. Industrial D. Penal

Noted by:

Atty. Dabuimar Burgos

Tax Lawyer and Professor

-NOTHING FOLLOWS-
GOOD LUCK, FRESHIES!
 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance Student Council
CAF Review
Law 20013: Law on Obligations and Contracts (Finals)

Answer Key:
1. B 11. B 21. B 31. C 41. A
2. C 12. C 22. A 32. A 42. A
3. C 13. A 23. D 33. A 43. A
4. C 14. D 24. A 34. A 44. D
5. A 15. B 25. D 35. B 45. C
6. D 16. D 26. D 36. D 46. B
7. D 17. C 27. D 37. A 47. A
8. D 18. C 28. A 38. B 48. A
9. D 19. C 29. A 39. C 49. B
10. A 20. A 30. B 40. D 50. C