PDF BL Sales and Agency DL

DE LA SALLE LIPA
College of Business, Economics, Accountancy and Management

Accountancy Department
Business Law - Review
COVERAGE: Contract of Sales

a. Nature, forms and requisites
b. Distinguished from dation in payment, cession in payment, contract for a piece of work and barter
c. Earnest money distinguished from option money
d. Rights and obligations of vendor and vendee
e. Remedies of unpaid seller
f. Warranties
g. Sale with a right to repurchase or conventional redemption, legal redemption
h. Sale on credit
i. Installment sales: Recto Law, Maceda Law and Condominium Act
Contract of Agency
a. Nature, forms and kinds
b. Obligations of agents and principal
c. Guarantee commission agent
d. Modes of extinguishing an agency
Direction: Read and select the best answer for the following questions.
1. It is a contract whereby one of the contracting parties, known as the seller or vendor, obligates himself to transfer the ownership of and to
deliver a determinate thing, and the other party, known as the buyer or vendee, obligates himself to pay therefore a price certain in money
or its equivalent.
a. Contract of Sales
b. Contract of Agency
c. Contract of Partnership
d. Contract of Pledge
2. The following are the essential elements or the requisites of the contract of sale, except
a. Consent of the contracting parties
b. Subject matter which should be a determinate thing
c. Price certain in money or its equivalent
d. Delivery of the subject matter
3. The following are the natural elements of the contract of sale, except
a. Warranty against eviction
b. Warranty against hidden defects and encumbrances
c. Warranty against apparent servitude
4. The following are only considered accidental elements in the contract of sale, except
a. Place of delivery and payment
b. Time of delivery and payment
c. Terms or conditions of payment
d. Price certain in money or its equivalent
5. The following are the characteristics of a contract of sale, except
a. Principal – It can exist by itself without being dependent upon another contract.
b. Real – It is perfected by delivery of the subject matter.
c. Bilateral – The parties are bound by reciprocal obligations.
d. Onerous – Valuable considerations are given by both parties to acquire rights.
e. Commutative – The parties exchange almost equivalent values.
f. Nominate – It has special name given to it by law.
6. The following are distinctions between sale and dacion en pago, except
a. In sale, there is no pre-existing credit, while in dacion en pago, there is pre-existing credit.
b. A sale extinguishes obligations while dacion en pago creates obligations.
c. In sale, there is greater freedom in fixing the price, while in dacion en pago, there is less freedom in fixing the price because of
the amount of the pre-existing credit which the parties seek to extinguish.
d. In sale, the cause or consideration is the price from the seller’s point of view, and the delivery of the object from the buyer’s view
point, in dacion en pago, the cause or consideration is the extinguishment of the obligation, from the debtor’s point of view and
the delivery of the object given in place of the credit, from the creditor’s point of view.
DLSL CPA Board Operation - Business Law

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7. The following are the distinctions between sale and payment by cession, except
a. In sale, there is no pre-existing credit while in payment by cession, there are pre-existing credits.
b. A sale creates obligations while payment by cession extinguishes obligations.
c. In sale, the cause or consideration is the price from the seller’s point of view, and the delivery of the object, from the buyer’s point
of view while in payment by cession, the cause or consideration is the extinguishment of the obligation from the debtor’s point of
view and the assignment of the things to be sold from the creditor’s point of view.
d. In sale, there is greater freedom in fixing the price while in payment by cession there is less freedom in fixing the price because
of the fixed amount of the pre-existing credits which the parties seek to establish.
e. In sale, the buyer does not become the owner owners of the property assigned to them but are merely given the right to sell such
property and apply the proceeds to their claims while in payment by cession, the creditors becomes the owner of the thing
transferred to them.
8. What is the name of the contract if it is for the delivery at a certain price of an article which the vendor in the ordinary course of business,
manufactures or procures for the general market, whether the same is on hand or not?
a. Contract for a piece of work
b. Contract of pledge
c. Contract of sale
d. Contract of deposit
9. What is the name of the contract if the goods are to be manufactured specially for the customer upon his special order and not for the
general market?
a. Contract for a piece of work
b. Contract of pledge
c. Contract of sale
d. Contract of deposit
10. LA Lakers entered into a contract with Nike Inc to provide two pairs of basketball shoes for Kobe Bryant and Andrew Bynum. No pair was,
however, available at the time of perfection of the contracts. Kobe wears 10” basketball shoes which Nike normally manufactures for the
general market while Andrew wears 20” basketball shows which will be manufactured specially for Andrew. What contracts are entered into
by the parties?
a. Both contracts of sale
b. Both contracts for a piece of work
c. Contract of sale for Kobe’s shoes and contract for a piece of work for Andrew’s shoes
d. Contract of sale for Andrew’s shoes and contract for a piece of work for Kobe’s shoes
11. In sale, the cause or consideration is in money while in barter, the cause or consideration is another thing. However, where the
consideration is partly in money and partly in another money, the following are the rules to be observed, except
a. The contract shall be one of sale or barter depending upon the manifest intention of the parties.
b. If the intention of the parties does not clearly appear, the contract is one of barter if the value of the thing given as part of the
consideration exceeds the monetary consideration.
c. If the intention of the parties does not clearly appear, the contract is one of sale if the monetary consideration is more than the
value of the thing given as part of the consideration.
d. If the intention of the parties does not clearly appear, the contract is one of barter if the monetary consideration is equal to the
value of the thing given as part of the consideration.
12. A and B entered into a contract whereby A transferred his laptop to B in exchange for P10,000 and a cellphone with a value of P10,000.
What is the name of the contract if the intention of the parties does not clearly appear?
a. Contract of Barter
b. Contract of Agency
c. Contract of Sale
d. Contract of Pledge
13. The following are the distinctions between contract of sale and contract to sell, except
a. In contract of sale, ownership passes to the buyer upon delivery while in contract to sell, the title to the goods does not pass to
the buyer until some future time and oftentimes upon payment of the price.
b. In contract of sale, the risk of loss or damage to the goods upon delivery is on the buyer, under the rule “res perit domino”, or the
thing perished with the owner; while in contract to sell, the risk is borne by the seller based on the same principle that the thing
perishes with the owner.
c. In contract of sale, the non-payment of the price is a suspensive condition while in contract to sell, the payment in full of the price
is a positive resolutory condition.
14. The following are the distinctions between contract of sale and agency to sell, except
a. In sale, ownership passes to the buyer, in agency to sell, ownership is retained by the principal.
b. In sale, the buyer pays the seller, while in agency to sell, the buyer pays the agent and the latter transmits the money to the
principal.
c. In sale, the goods are delivered by the agent to the buyer while in agency to sell, it is the seller or principal who delivers the
goods to the buyer.

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15. The following are the requisites of the object of a contract of sale, except
a. It must be within the commerce of men.
b. It must be not contrary to law, morals, good customs, public order or public policy.
c. It must be determinate.
d. It must be owned by the vendor at the time of perfection of contract of sale.
16. The object of a contract of sale must be determinate or specific otherwise there is no sale. When is the thing considered determinate?
a. When it is particularly designated or physically segregated from all others of the same class at the time the contract is entered
into without the necessity of a new or further agreement between the parties.
b. When it is particularly designated or physically segregated from all others of the same class at the time the contract is entered
into with the necessity of a new or further agreement between the parties.
c. When it is particularly designated or physically segregated from all others of the same class at the time the goods are to be
delivered into without the necessity of a new or further agreement between the parties.
d. When it is particularly designated or physically segregated from all others of the same class at the time the contract is entered
into with the necessity of a new or further agreement between the parties.
17. On January 1,2012, S sold to B a specific car owned by X for P50,000. S promised to deliver the car to B on January 11,2012. S bought
the car from X on January 10,2012 and delivered it to B on January 11,2012. Is the contract of sale between S and B valid?
a. No because there is no delivery of the car on January 1,2012 which is an essential requisite of a contract of sale.
b. No because the seller or vendor shall be the owner of the thing sold at the time of perfection of contract.
c. Yes even if X is not the owner of the thing sold on January 11,2012 because future thing can be the object of a contract of sale.
d. Yes because the vendor need not possess the title to the thing sold at the perfection of the contract but he must have the right to
transfer the ownership of the thing at the time that the thing is to be delivered.
18. On January 1,2012, D borrowed from C P100,000 and as a security D mortgaged his land to C. On January 2,2012, D sold the same land
to X for P50,000 to be delivered on January 5,2012. D failed to pay the loan. Is the sale between D and X valid?
a. No because D is no longer the owner of the land on January 2,2012.
b. No because D is no longer the owner of the land on January 5,2012.
c. Yes because D is still the owner of the land although it was mortgaged to C.
d. Yes provided D will pay the amount due to C.
19. Future things or things having a potential existence may be the object of a contract of sale. However, the thing must come into existence;
otherwise, the sale will not be effective for not having a subject matter. The following future things can be the object of a contract of sale,
except
a. Wine that a vineyard is expected to produce
b. Milk the cow may yield during the coming year
c. Next catch of a fisherman’s net
d. Future inheritance of an heir
20. The following are the distinctions between emptio rei speratae and emptio spei, except
a. Emptio rei speratae is a sale of hope or expectancy while emptio spei is the sale of a future thing.
b. In emptio rei speratae the thing expected will definitely come into existence, but its quality or quantity unknown; while in emptio
spei it is not certain that the thing will exist much less its quantity or quality.
c. Emptio rei speratae is subject to the condition that the thing should exist, so that if it does not, there will be no contract of sale by
reason of the absence of an essential element – subject matter while in emptio spei produces effects even though the thing does
not come into existence because the subject matter is the hope itself.
d. Sale of future harvest is emptio rei speratae while sale of lottery ticket No. 113 is emptio spei.
21. S sold a lottery ticket No. 143 to B on January 2,2012. The draw was already made on January 1,2012 and ticket No. 143 did not win. Is
the contract of sale between S and B valid?
a. Yes because it involves emptio spei or sale of mere hope.
b. No because the sale of vain hope or expectancy is void.
c. No even if the ticket is considered collectors item.
d. Yes because the essential elements of contract of sale are present.
22. The following goods may become the subject of a contract of sale, except
a. Existing goods owned or possessed by the seller.
b. Goods to be manufactured, raised or acquired by the seller after the perfection of the contract of sale or “future goods”.
c. Goods whose acquisition by the seller depends upon the contingency which may or may not happen.
d. Vain hope or expectancy.
e. Things subject to resolutory condition.
23. S is the sole owner of a condominium unit. S sells ½ undivided interest therein to B. Is the contract of sale valid?
a. No because the object of a contract of sale must be determinate.
b. No because the object of a contract of sale must be whole interest.
c. Yes the sole owner of a thing may sell an undivided interest therein and such sale shall produce the effect of making the seller
and the buyer co-owners of the thing sold.

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d. Yes provided that the condominium unit shall be physically divided.
24. There may be a sale of an undivided share of a specific mass of fungible goods though the seller purports to sell and the buyer purports to
buy a definite number, weight or measure of the goods in the mass, and though the number, weight or measure of the goods in the mass is
undetermined. Which of the following rules is incorrect?
I. If the quantity, number, weight or measure, of the mass is more than the quantity sold, the parties shall become co-owners of the
mass.
II. If the quantity of the mass is less than the quantity sold, the buyer becomes the owner of the whole mass, with the seller being bound
to make good the deficiency from goods of the same kind and quality, unless a contrary intent appears.
a. I only
b. II only
c. Neither I nor II
d. Both I and II
25. S sells to B 200 sacks of rice from a mass stored in the warehouse of S. The mass, however, actually consist of 300 sacks of corn. Which
of the following statements is correct?
a. The sale is null and void because the object is not determinate.
b. The sale is valid provided B will pay for the excess 100 sacks of corn.
c. The sale is valid, thus, S and B will become co-owners of the whole mass to the extent of 2/3 for B and 1/3 for S.
d. The sale is null and void because there is no consent.
26. S sells to B 300 sacks of yellow corn from a mass stored in the warehouse of S. The mass, however, actually consists of 280 sacks of
yellow corn. Which of the following statements is correct?
a. The sale is null and void because there is no consent.
b. The sale is null and void because there is no determinate object.
c. B becomes the owner of all the 280 sacks and S is bound to deliver additional 20 sacks.
d. B becomes the owner of all the 280 sacks and S is not bound to deliver the additional 20 sacks.
27. It is the sum stipulated as the equivalent of the thing sold, and also every incident taken into consideration for the fixing of the same, put to
the debit of the vendee, and agreed to by him.
a. Loan
b. Price
c. Debt
d. Money
28. The following are the requisites of the price in a contract of sale, except
a. It must be certain.
b. It must be real
c. It must be fictitious.
29. The price of the thing sold must be certain, otherwise, the sale is void by reason of the absence of meeting of minds between the parties.
The following are the instances when the price is certain, except
a. If the parties have agreed upon a definite amount for the sale.
b. If it be certain with reference to another thing certain.
c. If the determination of the price is left to the judgment of a specified person or persons.
d. If the price is fixed by the court.
e. If the price fixed is that which the thing sold would have on a definite day, or in a particular exchange or market, or when an
amount is fixed above or below the price on such day, or in such exchange or market, provided said amount is certain.
f. If the price is fixed by one of the contracting parties and not accepted by the other.
30. The following contracts of sale have prices which are certain and therefore valid, except
a. S sold to B a specific watch for P2,500 which both parties agreed upon.
b. S sold to B a certain ring of which the price is the salary of the faculty member of La Salle School.
c. S sold to B a specific car the price of which is subject to determination of X, third person.
d. S sold to B 500 shares of stock of ALI at the price equivalent to the closing price of the ALI shares on April 30,2012 at the PSE.
31. When may the court fix the price of the contract of sale if the determination of the price is left to the judgment of a third person?
a. If the third person is unable or unwilling to fix the price.
b. If the third person acted in bad faith or by mistake.
c. If the third person or persons are prevented from fixing the price or terms by the fault of the buyer or seller.
32. What is the effect to the contract of sale if the determination of the price is left to the judgment of a third person and such person is unable
or unwilling to fix the price?
a. The contract of sale is voidable.
b. The contract of sale is valid and binding.
c. The contract of sale is inefficacious unless the parties subsequently agree upon thr price.
d. The contract of sale is rescissible.

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33. S sold to B a specific good. The price of the good cannot be determined. The good has been delivered to and appropriated by B. What is
the obligation of B?
a. B has no obligation because the contract of sale is null and void having no price.
b. B has no obligation because the contract of sale is inefficacious because the price of the good cannot be determined.
c. B has the obligation to rescind the contract.
d. B has the obligation to pay a reasonable price which depends on the circumstances of each particular case.
34. What is the effect of gross inadequacy of price in a contract of sale?
a. It renders the contract of sale null and void.
b. In renders the contract of sale unenforceable.
c. It does not affect a contract of sale, except as it may indicate a defect in the consent which makes the contract voidable.
d. It does not affect a contract of sale even if the parties really intended a donation or some other act or contract.
35. What is the effect of simulated price in a contract of sale?
a. It renders the contract of sale null and void.
b. It renders the contract of sale voidable.
c. It renders the contract of sale rescissible.
d. It renders the contract of sale unenforceable.
e. It renders the contract of sale as a valid donation even if the requirements of donations or other agreements are not complied
with.
36. When is a contract of sale perfected?
a. Upon delivery of the object of a contract of sale.
b. At the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price.
c. Upon payment of the purchase price.
d. Upon the transfer of ownership or title.
37. X and Y are good friends. X sold and delivered his car to Y. It was agreed and understood that on next Sunday X will name and fix the
price of the car. Sunday came, X called Y by telephone and stated and fixed the price at P150,000. Is the contract of sale perfected?
a. No because the purchase price is not yet paid.
b. No because the title is not registered to the buyer.
c. Yes because the car has already been delivered to Y.
d. No because the price of the sale was left to the discretion of one of the parties, that is, the seller, and it was not consented by the
buyer.
38. Which of the following contract of sale is null and void?
a. Oral sale of real property or any interest therein regardless of the price.
b. Oral sale of goods, chattels or things in action the price of which is P500 or more.
c. Sale of a piece of land by the agent wherein his authority is not in writing.
39. When is a contract of sale by auction perfected?
a. When the highest bidder gives his bid.
b. When the auction things has been delivered to the buyer.
c. When the auctioneer announces its perfection by the fall of the hammer or in any other manner.
d. When the bid price has been paid.
40. The following are the rights of the parties in an auction sale, except
a. Before perfection, any bidder may retract his bid.
b. Before perfection, the auctioneer may withdraw the goods from the sale unless the auction has been announced without reserve,
c. After perfection, the wining bidder can retract his bid.
d. After perfection, the auctioneer cannot withdraw the goods.
41. The seller may bid at the auction provided the following requisites are present, except
a. The right to bid must have been reserved expressly by or on behalf of the seller.
b. The right to bid must not be prohibited by law or stipulation.
c. Notice must be given that the sale is subject to a right to bid by or on behalf of the seller.
d. The bid of the seller must be the lowest.
42. By bidders or puffers refer to persons employed by the seller to bid in his behalf, the purpose of which is to raise the price, but the said
persons are not in themselves bound by their bids. What is the effect of employment by the seller of by bidders or puffers without notice?
a. The sale may be considered voidable.
b. The sale is considered null and void.
c. The sale is unenforceable.
d. The sale is rescissible.
43. When is the ownership or title of the thing sold transferred from the seller to the buyer?
a. Upon the perfection of contract of sale.
b. Upon payment of the purchase price.

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c. Upon actual or constructive deliver of the thing sold.
44. Which of the following statements concerning bilateral and unilateral promise to buy and/or sell is incorrect?
a. Bilateral promise takes place when one party promises to buy and the other party promises to sell a determinate thing at an
agreed price.
b. Bilateral promise is reciprocally demandable since this is as good as a perfected contract of sale.
c. Unilateral promise not accepted by the promissee (policitacion) does not produce any defect.
d. Unilateral promise accepted by the promissee is binding upon the promissory even if it is not supported by a consideration
distinct from the price.
45. It refers to the money given as part of the purchase price and as proof of perfection of the contract.
a. Option money
b. Earnest money
c. Perfect money
d. Component money
46. It refers to the consideration paid for the purpose of holding one to his promise to buy or sell a determinate thing for a certain period of
time, which consideration is separate and distinct from the purchase price.
a. Option money
b. Earnest money
c. Perfect money
d. Component money
47. S promised to sell his car to B for P100,000 giving B one week to decide whether to buy or not. B accepts the promise and gives a
consideration of P1,000 for the one week period. If B decides to buy the car, how much should B pay to S?
a. P100,000 because the P1,000 is an earnest money.
b. P99,000 because the P1,000 is an option money.
c. P100,000 because the P1,000 is an option money.
d. P99,000 because the P1,000 is an earnest money.
48. B purchased the car of S for P100,000 payable within 30 days from the date of sale. To show that he is really in earnest, B gives S P1,000
upon the execution of their agreement. How much should B pay to S on the 30 th day?
a. P100,000 because the P1,000 is an earnest money.
b. P99,000 because the P1,000 is an option money.
c. P100,000 because the P1,000 is an option money.
d. P99,000 because the P1,000 is an earnest money.
49. When shall the buyer or vendee acquire personal rights over the fruits of the object of a contract of sale?
a. From the time the object should be delivered.
b. From the time of the perfection of the contract of sale.
c. From the time of the payment of purchase price.
d. From the time of the delivery of the object of the contract of sale.
50. On January 1, 2012, Seller and Buyer entered into a contract of sale of a specific cow. The purchase price shall be paid on January 5,2012
and the cow shall be delivered on January 10,2012. The cow gives birth on January 4,2012. The cow and its young have been delivered
on January 11,2012. Which of the following statements is correct?
a. The buyer has real right over the cow and its young on January 1,2012.
b. The buyer has personal right over the young on January 10,2012.
c. The buyer has personal right over the young on January 5,2012.
d. The buyer has personal right over the young on January 1,2012 and real right over the cow and its young on January 11,2012.
51. The seller has the duty to preserve the thing after the perfection of contract of sale but before its delivery. What standard of care should be
observed by the seller to preserve the object of contract of sale?
a. Diligence of a good father of a family unless the law or the stipulation of the parties requires another standard of care.
b. Diligence of a father of a good family unless the law or the stipulation of the parties requires another standard of care.
c. Extraordinary diligence of a good father of a family unless the law or the stipulation of the parties requires another standard of
care.
d. Extraordinary diligence of a father of a good family unless the law or the stipulation of the parties requires another standard of
care.
52. What is the effect of the complete loss of the object of the contract of sale before the perfection of the contract?
a. The seller shall bear the risks of the loss.
b. The buyer shall pay the purchase price.
c. The buyer shall be liable for the damages.
d. The sale is void because of the absence of the object.
53. What shall be the remedy of the buyer in case of the partial loss of the object of the contract of sale before the perfection of the contract?
I. Withdrawal from the contract or rescission.

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II. Demanding the remaining part and paying its proportionate price.
a. I only
b. II only
c. Both I and II
d. Neither I nor II
54. After the perfection of the contract of sale, who shall bear the risk of loss of the object of the contract of sale before the delivery?
a. Buyer because any benefit therefrom during the same period inures to him.
b. Seller because any benefit therefrom during the same period inures to him.
c. Buyer because the ownership of the goods is transferred to the buyer after the perfection of the contract of sale.
d. Seller because goods remain at the seller’s risk until the ownership of the goods is transferred to the buyer by actual or
constructive delivery.
55. The following are the instances wherein the goods are the buyer’s risk notwithstanding that the ownership is not transferred to the buyer ,
except
a. If there is an agreement to that effect.
b. If ownership of the goods is retained by the seller merely to secure the performance by the buyer of his obligation under the
contract.
c. When actual delivery has been delayed through the fault of the buyer.
d. When there is actual or constructive delivery to the buyer.
56. What is the remedy of the buyer if the goods delivered do not correspond with the sample, description or sale and description in a sale by
sample, sale by description or sale by sample and description?
a. Ask for damages for breach of contract.
b. Ask for rescission of the contract of sale.
c. Ask for specific performance of the contract of sale.
d. Ask for declaration of nullity of the contract of sale.
57. The following are the remedies of vendor in installment sales of personal property (Recto Law), and contracts purporting to be leases of
personal property with option to buy, when the lessor has deprived the lessee of the possession or enjoyment of the thing, except
a. Exact fulfillment of the obligation, should the vendee fail to pay any installment.
b. Cancel the sale should the vendee fails to pay two or more any installments.
c. Foreclose the chattel mortgage on the thing sold, if one has been constituted without right to recover any deficiency.
d. Foreclose the chattel mortgage on the thing sold, if one has been constituted with right to recover any deficiency.
58. S sold his only car to B for P100,000 payable in 10 equal monthly installments of P10,000 each. As security, B executed a chattel
mortgage on the car. What is the remedy of S if B fails to pay one installment?
a. Exact fulfillment of the obligation, should the vendee fail to pay any installment.
b. Cancel the sale should the vendee fails to pay two or more any installments.
c. Foreclose the chattel mortgage on the thing sold, if one has been constituted without right to recover any deficiency.
d. Foreclose the chattel mortgage on the thing sold, if one has been constituted with right to recover any deficiency.
59. Using the same data in number 58 and assuming B fails to pay two or more installments; can S foreclose the chattel mortgage on the car
and recover any deficiency from the foreclosure?
a. Yes S can foreclose the chattel mortgage but cannot recover any deficiency even if there is stipulation for the recovery.
b. No S cannot foreclose the chattel mortgage and cannot recover any deficiency.
c. Yes S can foreclose the chattel mortgage and can recover any deficiency even without stipulation for the recovery.
d. Yes S can foreclose the chattel mortgage and can recover any deficiency only if there stipulation for the recovery.
60. Using the same data in number 58 and assuming B fails to pay two or more installments; can S cancel the contract of sale?
a. No S cannot cancel the contract of sale.
b. Yes S can cancel the contract of sale and he can retain the installments already received even without stipulation.
c. Yes S can cancel the contract of sale but he shall return the installments already received minus reasonable rent.
d. Yes S can cancel the contract of sale and he can retain the installments already received if there is stipulation that installments
received shall not be returned even if that stipulation is unconscionable.
61. Using the same data in number 58 and assuming B fails to pay two or more installments; can S ask for the exact fulfillment of the
obligation and recover any deficiency from the sale by execution?
a. No S cannot ask for the fulfillment of the contract of sale because it is available only when one installment is not paid.
b. Yes S can ask for the fulfillment of the contract of sale but cannot recover any deficiency from the sale by execution under any
circumstances.
c. Yes S can ask for the fulfillment of the contract of sale and can recover any deficiency from the sale by execution even without
stipulation.
d. Yes S can ask for the fulfillment of the contract of sale and can recover any deficiency from the sale if there is stipulation.
62. Using the same data in number 58 except from the fact that the chattel mortgage was executed over the piano of B and not over his car. S
foreclosed the mortgage over the piano and there is deficiency. Can S recover the deficiency?
a. Yes provided there is stipulation to that effect.
b. Yes even without stipulation to that effect.
c. No because that will be contrary to law.

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d. No even without stipulation to that effect.
63. S sold his ring to B for P50,000 under the following terms: down payment of P30,000 and the balance payable at month end. As security, B
executed a chattel mortgage on the ring. B defaulted in the payment of the balance. By reason thereof, S foreclosed the chattel mortgage
on the ring. However, only P15,000 was realized in the foreclosure sale. Can S still proceed against B to collect the deficiency of P5,000?
a. No because Recto Law prohibits recovery of deficiency.
b. Yes if deficiency has been agreed upon contrary to Recto Law.
c. Yes because Recto Law does not apply to sale on straight term and the general rule is that if the foreclosure sale in chattel
mortgage results in deficiency, the same may be recovered by the creditor.
d. No because recovery of deficiency is only available in execution sale.
64. Sale of real property in installments governed by RA 6552 or Maceda Law covers the following, except
a. Sale of residential property
b. Sale of condominium
c. Sale of apartments
d. Sale of industrial lots, commercial buildings and sales to tenants
65. As a general rule, all those who may oblige themselves may enter into a contract of sale. What is the status of a contract of sale entered
into by persons having absolute incapacity such as minors, insane or demented persons and deaf mutes who do not know how to write
with a capacitated person?
a. Voidable
b. Rescissible
c. Unenforceable
d. Null and void
66. S, a capacitated person, sold to B, a minor, a chicken joy. May S demand from B the payment of the purchase price?
a. No because the contract of sale is voidable since B is an incapacitated person.
b. Yes because the contract of sale is valid considering the food is a necessary.
c. Yes even the price is unreasonable.
d. No because the contract of sale is void.
67. What is the status of the contract of sale between a husband and wife?
a. Voidable because they are suffering from absolute incapacity.
b. Null and void because they are suffering from relative incapacity.
c. Rescissible if there is lesion.
d. Unenforceable if it is not in writing.
68. The following persons are prohibited from acquiring by purchase, except
a. The guardian, the property of the person or persons under his guardianship.
b. Agents, the property whose administration or sale may have been entrusted to them, unless the consent of the principal has
been given.
c. Executors and administrations, the property of the estate under administration.
d. Wife, the exclusive or capital property of his husband.
e. Public officers and employees, the property of the State or GOCC under their administration.
f. Justices, judges, prosecuting attorneys, clerks of court and other officers and employees connected with the administration of
justice, the property and rights in litigation.
69. The following are the obligations of the vendor, except
a. To transfer the ownership of the thing sold at the time of the perfection of the contract of sale.
b. To deliver the thing sold including the accessions and accessories in the condition in which they were upon the perfection of the
contract.
c. To warrant the thing sold against eviction and hidden defects and circumstances.
d. To take care of the thing sold with the diligence of a good father of a family unless the law or the stipulation of the parties requires
another standard of care.
70. It is a mode of acquiring ownership whereby the object of the contract is placed in the control and possession of the vendee, either actually
or constructively.
a. Delivery
b. Payment of purchase price
c. Perfection of contract
d. Execution of document

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71. The following are the examples of constructive deliveries.
a. By legal formalities – When the same is made through a public document, the execution thereof shall be equivalent to the
delivery of the thing sold. It applies to both movable and immovable property.
b. Symbolic delivery (traditio simbolica or clavium) – This is delivery that takes place by delivering the keys of the place or
depository where the movable is stored or kept.
c. Traditio longa manu – It is the delivery of a movable by mere consent or agreement of the parties if the thing cannot be
transferred to the possession of the vendee at the time of sale.
d. Tradition brevi manu – It is a delivery that takes place when the vendee is already in the possession of the thing sold even before
the sale and thereafter continues in possession thereof in the concept of an owner. It applies to movables only.
e. Traditio constitutum possessorium – It is a delivery that takes place when the vendor continues in possession of the thing sold
after the sale but in another capacity such as that of a lessee or depositary. It applies to both movable and immovable property.
72. S and B entered into a contract of sale of a specific coconut. S and B pointed over that particular coconut. What type of constructive
delivery is present?
a. Traditio simbolica
b. Traditio longa manu
c. Tradition brevi manu
d. Traditio constitutum possessorium
73. S and B entered into a contract of sale of a specific watch. They executed a public instrument over the sale. What type of contructive
delivery is present?
b. Tradition longa manu
c. Traditio brevi manu
d. Tradition by legal formalities
74. S and B entered into a contract of sale of a specific car. S delivered the key of the car to B. What type of constructive delivery is present?
b. Tradition longa manu
c. Traditio brevi manu
d. Tradition by legal formalities
75. B rented the specific truck of S. After the end of the contract, S sold the property to B. As a result of sale, B continues to have possession
of the property. What type of constructive delivery is present?
76. S sold his house and lot to B. After the sale, B leaseback the property to S. What type of constructive delivery is present?
77. The following are the modes for the delivery of incorporeal property, except
a. By constructive tradition such as execution of public document.
b. By placing the titles of ownership in the possession of the vendee such as delivering the stock certificate covering the shares of
stock sold.
c. Through the use by the vendee of his rights with consent of the vendor such as when the seller authorizes the buyer of shares of
stock to vote during the stockholder’s meeting.
d. Through assignment of the shares of stocks.
78. In sale or return, when is the ownership of the goods transferred to the buyer?
a. Upon payment of purchase price.
b. Upon delivery of the goods.
c. Upon approval by the buyer.
d. Upon return of the goods to the seller.
79. In sale or approval, the ownership of the goods is transferred to the buyer under the following instances, except
a. When the buyer signifies his approval or acceptance of the goods.
b. When the goods are delivered to the buyer.

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c. When the buyer does an act adopting the transaction.
d. When the buyer does not signify his approval or acceptance of the goods but retains the goods without giving notice of rejection
within the time fixed in the contract or within reasonable time, and such time has expired.
80. On January 1, S delivered a car to B under a sale or return arrangement. S gave B up to May 7 to return the electronic calculator. Before
May 7, the calculator was destroyed by fire. Should B pay for the purchase price?
a. No because B is not yet the owner of the calculator.
b. No because the calculator is destroyed through fortuitous event.
c. Yes because B becomes the owner of the calculator upon delivery.
d. Yes if the fire is due to the fault of B.
81. Using the same data in number 80 except the fact that the arrangement is sale on trial or approval, should B pay the purchase price?
a. No even if the fire is due to the fault of B.
b. Yes even if B signifies his approval before the fire.
c. No if B does not signify his approval before the fire because B is not yet the owner.
d. Yes because B becomes the owner of the calculator upon delivery.
82. The general rule is that the delivery of specific goods to a carrier or other bailee for purpose of transmission to the buyer transfers
ownership to the buyer. The following are the instances wherein the ownership of goods is retained by the seller despite delivery to carrier
or bailee, except
a. When there is stipulation to that effect.
b. When by the terms of the bill of lading, the goods are to be delivered to the seller or his agent or to the order of the seller or his
agent.
c. When by the terms of the bill of lading, the goods are to be delivered to the order of the buyer or his agent but the bill of lading is
retained by the seller or his agent.
d. When the seller draws on the buyer a bill of exchange for the price of the goods and transmits the bill of exchange and the bill of
lading to the buyer to secure acceptance or payment of the bill of exchange, but the buyer dishonors such bill of exchange.
e. When the bill of lading is negotiated to a purchases for value in good faith.
83. The general rule is that when goods are sold by a person who is not the owner thereof, the buyer acquires no better title than the seller
had. The following are the exceptions to the general rule, except
a. When the sale is made without authority or consent of the owner.
b. When the owner is precluded by his conduct from denying the seller’s authority to sell.
c. When the sale is made under the provisions of any factor’s acts, recording laws or any other provisions of law enabling the
apparent owner to dispose of the goods as if he were the true owner thereof.
d. When the sale is made under a statutory power of sale or under the order of court of competent jurisdiction.
e. When the purchase is made in a merchant’s store, or in fairs, or markets.
84. S stole the ring of O and sells the same to B who does not have any knowledge that the ring was stole. Did B acquire title to the ring?
a. Yes if B is a purchaser in good faith.
b. No if B is a purchaser in bad faith.
c. No because the title of S is that of a thief and B, the buyer, acquires no better title than S had over it.
d. Yes if B is a purchaser in good faith and for value.
85. Using the same data in number 84 and suppose the ring found its way in a jewelry store and it was from that jewelry store that B bought
the rung in good faith. Which of the following statements is true?
a. O can recover the ring from B upon payment of purchase price.
b. B does not acquire title over the ring because it was stolen.
c. B acquires title to the ring because the purchase is made from a merchant’s store, fair or market.
d. O has better title over the ring as against B.
86. S, a minor of 17 years, sold his watch for P1,500.00 to B, 30 years old. The guardian of S was not aware of the sale; hence, no action for
annulment has yet been filed. Subsequently, B sold the watch to T, who acquired it in good faith. Which of the following statements is
incorrect?
a. T acquires no title to the watch because the seller’s title is voidable.
b. T acquires good title to the watch even if he buys it in bad faith.
c. T acquires good title to the watch even if the seller’s title is voidable provided the same has not been avoided at the time of sale
and T acquires the watch in good faith, for value and without notice of seller’s defect of title.
d. T acquires good title to the watch even if the voidable title of the seller has been avoided before the time of sale as long as T
acquires the watch in good faith, for value and without notice of seller’s defect of title.
87. The following are the places wherein the things sold should be delivered, except
a. Place stipulated in the contract.
b. In case there is no stipulation, place fixed by usage or trade.
c. In the absence of a and b, the seller’s place of business if he has one; if none, the seller’s place of residence.

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d. In the absence of a and b, the buyer’s place of business if he has one; if none, the buyer’s place of residence.
e. In the case of specific goods, the place where the goods are located at the time of perfection of contract of sale.
88. In case the time for the delivery of goods is not stipulated, what is the time for its delivery?
a. At the end of the month.
b. At the end of the year.
c. At the end of the day.
d. Within reasonable time from the execution of the contract.
89. In the absence of stipulation, who shall bear the expenses of delivery and incidental expenses to putting the goods into a deliverable state?
a. Buyer and Seller equally
b. Seller
c. Buyer
d. Government
90. The following are the instances when a vendor is not bound to deliver the thing sold?
a. If the vendee has not paid him the price.
b. If no period for payment of the price has been fixed in the contract.
c. If a period has been fixed for the payment of the price.
d. If the vendee loses the right to make use of the period.
91. What are the rights of the buyer when the quantity or quality of goods delivered is different from that which the seller contracted to sell?
I. Reject the goods.
II. Accept the goods and pay the contract price.
a. I only
b. II only
c. Both I and II
d. Neither I nor II
92. When the quantity delivered is more than that which the parties agreed upon, the following are the rights of the buyer, except
a. Accept the goods agreed upon and reject the rest.
b. Accept the whole of the goods delivered and pay for them at the contract rate.
c. Reject the whole of the goods if they are indivisible.
d. Reject the whole of the goods if they are divisible.
93. When the seller delivers the goods agreed upon but are mixed with goods of different description, what are the rights of the buyer?
I. Accept the goods agreed upon and reject the rest, if the sale is divisible.
II. Reject the whole of the goods, if the sale is indivisible.
a. I only
b. II only
c. Neither I nor II
d. Both I and II
94. An unpaid seller is one who has not been paid or tendered the whole of the price or who has received a bill of exchange or other
negotiable instruments as conditional payment and the condition under which it was received has been broken by reason of the dishonor of
the instrument, the insolvency of the buyer, or otherwise. The following are the rights of the unpaid seller, except
a. Possessory lien, or a lien on the goods or right to retain them while he is in possession of them.
b. Right of stoppage in transitu.
c. Right of resale.
d. Right to rescind the sale.
e. Right to declare the sale null and void.
95. The possessory lien or right to retain goods is available to the unpaid seller and notwithstanding that he may be in possession of the goods
as agent or bailee for the buyer in he following instances, except
a. Where the goods have been sold without any stipulation as to credit.
b. Where the goods have been sold on credit.
c. Where the goods have been sold on credit, but the credit term has expired.
d. Where the buyer is insolvent.
96. The unpaid seller loses his lien on the goods in the following cases, except
a. When the seller obtains judgment or decree for the price of the goods.
b. When the seller delivers the goods to a carrier or other bailee for the purpose of transmission to the buyer without reserving the
ownership in the goods or the right to the possession thereof.
c. When the buyer or his agent lawfully obtains possession of the goods.
d. By waiver of the possessory lien.
97. It refers to the right of the unpaid seller to resume possession of the goods at any time while they are in transit, and he will them become
entitled to the goods as he would have had if he had never parted with the possession. This right is available after the unpaid seller has
parted with the possession of the goods and the buyer is or becomes insolvent.
a. Possessory lien, or a lien on the goods or right to retain them while he is in possession of them.

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b. Right of stoppage in transitu.
c. Right of resale.
d. Right to rescind the sale.
98. Right of stoppage in transitu is exercised by obtaining actual possession of the goods or by giving notice of his claim to the carrier or other
bailee in whose possession the goods are. The following are the effects of the exercise of right of stoppage in transitu, except
a. The goods are no longer in transit.
b. The contract of carriage ceases and the carrier shall be liable as depositary or other bailee.
c. The carrier must deliver the goods to or according to the instructions of the seller.
d. The carrier must deliver the goods to the buyer.
99. When are the goods in transit?

I. From the time they are delivered to the carrier or other bailee for the purpose of transmission to the buyer, until the buyer or his agent,
takes delivery of them from such carrier or other bailee.
II. If the goods are rejected by the buyer, and the carrier or other bailee continues in possession of them, even if the seller has refused to
receive them back.
a. I only
b. II only
c. Neither I nor II
d. Both I and II
100. The following are the instances when goods are no longer in transit, except
a. If the buyer obtains delivery of the goods before arrival at the appointed destination.
b. If the carrier or other bailee acknowledges to the buyer or his agent, that he is holding the goods in his behalf, after arrival of the
goods at their appointed destination.
c. If the carrier or other bailee wrongfully refuses to deliver the goods to buyer or his agent.
d. If the goods are rejected by the buyer, and the carrier or other bailee continues in possession of them, even if the seller has
refused to receive them back.
101. The following are the grounds for the exercise of right of resale by the unpaid seller, except
a. The goods are of perishable nature.
b. The seller has expressly reserved the right to resell the goods in case the buyer should make default.
c. The buyer has been in default for an unreasonable time.
d. The buyer becomes insolvent.
102. The following are the requisites for right of resale to be available to an unpaid seller, except
a. The buyer has defaulted in the payment of the purchase price.
b. The seller has no right of lien nor has stopped the goods in transitu.
c. Title to the goods has passed on to the buyer.
d. The grounds must be those provided by law.
103. The unpaid seller may resell the goods in a public or private sale. He is bound to exercise reasonable care and judgment in making the
resale. He cannot, directly or indirectly, buy the goods. The following are the effect of resale, except
a. The seller shall not be liable for the original buyer.
b. The seller may recover damages from the buyer for any loss occasioned by the breach of the contract of sale.
c. The buyer shall be entitled for any profit made by such resale.
d. The new buyer acquires a good title against the original buyer.
104. The following are the requisites for right to rescind the sale to be available to an unpaid seller, except
a. The buyer has defaulted in the payment of the purchase price.
b. The seller has no right of lien nor has stopped the goods in transitu.
c. Title to the goods has passed on to the buyer.
d. The grounds must be : 1.) The seller has expressly reserved the right to rescind the sale in case the buyer should make default
or 2.) the buyer has been in default in the payment of the price for an unreasonable time.
105. The following are the effect of rescission of contract of sale by the unpaid seller, except
a. The seller shall not be liable to the buyer upon the contract of sale.
b. The seller may recover from the buyer damages for any loss occasioned by the breach of contract of sale.
c. The seller resumes ownership of the goods.
d. The buyer shall pay for the purchase price.
106. In a sale of real estate with a statement of its area at the rate of a certain price per unit of measure or number, the vendor shall deliver the
area mentioned in the contract of sale. What is the remedy of the buyer if the actual area is less than by an area less than 1/10 of that
stated in the contract?
a. Ask for proportionate reduction in the price.
c. Ask for damages.

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107. Using the same data in number 106, what is the remedy of the buyer if the actual area is less than by 1/10 or more of that stated in the
contract?
c. Ask for damages.
108. Using the same data in number 106, what is the remedy of the buyer if the actual area is more than that stated in the contract?
I. Accept the area stated in the contract and reject the rest.
II. Accept the whole are and pay for them at the contract rate.
a. I only
b. II only
c. Either I or II
d. Neither I nor II
109. Using the same data in number 106, what is the remedy of the buyer if the area is the same but a part of the immovable is not of the same
quality specified in the contract and the inferior value is less than 1/10 of the price agreed upon?
c. Ask for damages.
110. Using the same data in number 106, what is the remedy of the buyer if the area is the same but a part of the immovable is not of the same
quality specified in the contract and the inferior value is 1/10 or more of the price agreed upon?
c. Ask for damages.
111. In sale of real estate for a lump sum and not at the rate of a certain sum for a unit of measure or number, the vendor is bound to deliver all
that it is included within the boundaries stated in the contract although there be greater or less area or number than that stated in the
contract. What amount shall be paid by the vendee or buyer?
a. The lump sum stipulated in the contract with increase in the price if the area is greater than that stated in the contract.
b. The lump sum stipulated in the contract with decrease in the price if the area is less than that stated in the contract.
c. The lump sum stipulated in the contract with no increase or decrease in the price although there be greater or less area or
number than that stated in the contract.
112. Using the same data in number 111, what is the remedy of the buyer if the vendor does not deliver the area within the boundaries in the
contract?
I. Ask for proportionate reduction in the price.
II. Rescind the contract
a. I only
b. II only
c. Neither I nor II
d. Either I or II
113. In case of double sale of personal property, who among the buyers shall be preferred?
a. Person who first registered the property in good faith.
b. Person who first took possession, actually or constructively, of the property in good faith.
c. Person who has oldest title.
d. Person who has the latest title.
114. S sold his ring to B who told S that he would obtain delivery of the computer after 3 days. Before the third day, S sold the same to X who
immediately took physical possession of the computer. X was not aware of the previous sale to B. Who has a better right over the ring?
a. B because he has the older title.
b. X because he first took possession of the ring in good faith.
c. B because X has not registered the ring in good faith.
d. X even if he took possession of the ring in good faith.
115. S sold his watch to B in a public document. However, B informed S that he would obtain actual delivery of the watch after 3 days. The day
after the same to B, S sold the same watch to X in a private document and X immediately took possession of the watch. X was not aware
of the same to B. Who has a better right over the watch?
a. B because he has the older title.
b. X because he first took actual possession of the watch in good faith.

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c. X because X has not registered the watch in good faith.
d. B because he first took constructive possession of the watch in good faith.
116. In case of double sale of immovable property, who among the buyer shall be preferred?
a. Person who in good faith first registered the sale.
b. Person who first took possession in good faith.
c. Person who presents the oldest title in good faith.
d. Person who has the latest title.
117. On May 1, S sold his lot to X. the deed of sale was in a private instrument. On May 3, S sold the same lot to Y in a public instrument. On
May 5, S sold again the said lot to Z in a public instrument. Z immediately registered the sale with Register of Deeds on May 5. X took
actual possession of the lot on May 6. X, Y and Z were not aware of the sale made to others. Who among the buyer has the better right?
a. X because he first took actual possession in good faith.
b. X because he has the oldest title in good faith.
c. Y because he first took constructive possession in good faith.
d. Z because he is the first registrant in good faith.
118. Using the same data in number 117 but assuming Z is in bad faith, who has the better right?
a. Z because he is the first registrant in bad faith.
b. X because he first took actual possession in good faith.
c. X because he has the oldest title in good faith.
d. Y because he first took constructive possession in good faith.
119. Using the same data in number 117 but assuming Z and Y are in bad faith, who has the better right?
a. Z because he is the first registrant in bad faith.
b. X because he has the oldest title in good faith.
c. Y because he first took constructive possession in bad faith.
120. The following are considered natural elements or implied warranties in a contract of sale, except
a. Warranty against eviction
b. Warranty against hidden defects
c. Warranty against undeclared charge or encumbrance
d. Warranty against registered mortgage
121. The following are the effects if the condition in a contract of sale subject to a condition is not fulfilled, except
a. The other party may refuse to proceed with the contract.
b. The non-performance of condition may be treated as a breach of warranty.
c. The other party may waive the performance of the condition.
d. The contract of sale is perfected if the condition is suspensive.
122. The following persons shall not be liable for breach of warranty in a contract of sale, except
a. Sheriff
b. Auctioneer
c. Mortgagee
d. Pledgee
e. Seller
f. Other persons professing to sell by virtue of authority in fact or law.
123. It refers to the deprivation of the vendee of the whole or a part of the thing sold by virtue of a final judgment based on a right prior to the
sale or an act imputable to the vendor.
a. Breach of contract
b. Evasion of sentence
c. Eviction
d. Damages
124. The following are the requisites in order that the seller’s warranty against eviction may be enforced, except
a. There must be a final judgment depriving the vendee of the whole or part of the thing sold.
b. The vendee must appeal from the decision or judgment depriving him of the thing sold.
c. The deprivation is based on a right prior to the sale or an act imputable to the vendor.
d. The vendor must have been notified of the suit for eviction at the instance of the vendee.
125. Which of the following are other instances when seller is liable for breach of warranty against eviction?
I. If the property is sold for non-payment of taxes due and not made known to the vendee before the sale.
II. In case of judicial sales unless otherwise decreed in the judgment.
a. I only
b. II only

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c. Both I and II
d. Neither I nor II
126. If there is stipulation exempting the vendor from the obligation to answer for eviction and the vendor acted in bad faith because he had
knowledge at the time of the sale of the existence of the fact, to what extent shall the vendor be liable to the vendee in case of eviction?
I. Value of the thing at the time of eviction.
II. Income or fruits of the thing.
III. Cost of suit caused by eviction.
IV. Expenses of the contract if the vendee has paid them.
V. Damages, interests and ornamental expenses.
a. I, II and III
b. I, II, III and IV
c. II, III, IV and V
d. I, II, III, IV and V
127. If there is stipulation exempting the vendor from the obligation to answer for eviction and the vendor acted in good faith without the
knowledge of the risk of eviction also known as waiver consciente, what shall be the liability of the vendor in case of eviction?
a. Vendor shall be liable for value of the things at the time of eviction plus income or fruits.
b. Vendor shall be liable for value of the things at the time of eviction.
c. Vendor shall be liable for value of the things, income or fruits and damages and interest.
d. Vendor shall not be liable for anything.
128. If there is stipulation exempting the vendor from the obligation to answer for eviction and the vendor acted in good faith with the knowledge
of the risk of eviction also known as waiver intencionada, what shall be the liability of the vendor in case of eviction?
a. Vendor shall be liable for value of the things at the time of eviction plus income or fruits.
b. Vendor shall be liable for value of the things at the time of eviction.
c. Vendor shall be liable for value of the things, income or fruits and damages and interest.
d. Vendor shall not be liable for anything.
129. Where no warranty against eviction has been agreed upon or there was no stipulation exempting the vendor from liability and the vendor
acted in bad faith, to what extent shall the vendor be liable to the vendee in case of eviction?
III. Cost of suit caused by eviction.
IV. Expenses of the contract if the vendee has paid them.
V. Damages, interests and ornamental expenses.
a. I, II and III
130. Where no warranty against eviction has been agreed upon or there was no stipulation exempting the vendor from liability and the vendor
acted in good faith, to what extent shall the vendor be liable to the vendee in case of eviction?
VI. Cost of suit caused by eviction.
VII. Expenses of the contract if the vendee has paid them.
VIII. Damages, interests and ornamental expenses.
a. I, II and III
131. What shall be the remedies of the buyer if the vendee loses, by reason of eviction, a part of the thing sold of such importance, in relation to
the whole, that he would not have bought it without said part?
I. Rescission of the contract
II. Enforcement of the vendor’s liability for eviction
a. I only
b. II only
c. Either I or II
d. Neither I nor II
132. It is an encumbrance imposed upon an immovable for the benefit of another immovable belonging to a difference owner.
a. Easement or servitude
b. Mortgage
c. Pledge
d. Lien

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133. The following are the requisites for vendor’s liability should the immovable sold be encumbered with easement or servitude, except
a. The easement must be non-apparent.
b. It must not have been mentioned in the agreement.
c. It must be of such nature that it must be presumed that the vendee would not have acquired the immovable had he been aware
thereof.
d. It must be registered.
134. What are the remedies of the buyer should the immovable sold be encumbered with any non-apparent easement or servitude within one
year from the execution of the deed of sale?
I. Rescission of the contract of sale.
II. Indemnification for damages.
a. I only
b. II only
c. Either I or II
d. Neither I nor II
135. What are the remedies of the buyer should the immovable sold be encumbered with any non-apparent easement or servitude within one
year from the execution of the deed of sale?
I. Rescission of the contract of sale.
II. Indemnification for damages within one year from discovery of easement.
a. I only
b. II only
c. Either I or II
d. Neither I nor II
136. The following are the requisites for enforcement of vendor’s liability against hidden defects, except
a. The defect must exist after the date of sale.
b. The defect must be hidden.
c. The defect must render the thing unfit for the use for which it is intended or diminishes its fitness for such use to such an extent,
that had the vendee been aware thereof, he would not have acquired it or would have given a lower price for it.
d. The action to enforce it must be made within the period provided by law.
137. The following are considered implied warranties in a contract of sale, except
a. Warranty of fitness for a particular purpose.
b. Warranty of merchantable quality.
c. Warranty of merchantability.
d. Warranty of seller’s opinion.
138. Which of the following statements concerning liability of vendor for hidden defects is incorrect?
a. The vendor shall be liable to the vendee for any hidden faults or defects in the thing sold, even though he was not aware thereof.
b. The vendor shall not be liable if there is a stipulation exempting him from such defects and he was not aware thereof.
c. The vendor shall be liable to the vendee for any hidden faults or defects in the thing sold only if he was aware thereof.
d. The vendor shall be liable for hidden defects even there is stipulation exempting him from such defects if he was aware thereof.
139. What shall be the extent of liability of the vendor in case of loss of the thing with hidden defects wherein the vendor was aware of the
defect and the cause of the loss is the defect?
a. Return the price, refund the expenses of the contract and pay damages.
b. Return the price and refund expenses of the contract.
c. Return the price, refund the expenses of the contract and pay interest of the price.
d. Return the price.
140. What shall be the extent of liability of the vendor in case of loss of the thing with hidden defects wherein the vendor was not aware of the
defects and the cause of the loss is the defect?
a. Return the price, refund the expenses of the contract and pay damages.
b. Return the price and refund expenses of the contract.
c. Return the price, refund the expenses of the contract and pay interest of the price.
d. Return the price.
141. This is one of the two remedies of the vendee in case of breach of warranties against hidden defects, of merchantability, of merchantable
quality or fitness for a particular purpose. It refers to the withdrawal from the contract or rescission.
a. Accion quanti minoris
b. Accion redhibitoria
c. Accion pauliana
d. Accion subrogatoria
142. This is one of the two remedies of the vendee in case of breach of warranties against hidden defects, of merchantability, of merchantable
quality or fitness for a particular purpose. It refers to demanding a proportionate reduction in the price.
a. Accion quanti minoris
b. Accion redhibitoria

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c. Accion pauliana
d. Accion subrogatoria
143. What shall be the extent of liability of the vendor in case of loss of the thing with hidden defects wherein the vendor was aware of the
defect and the cause of the loss is a fortuitous event or the fault of the vendee?
a. To return the price paid and to pay damages.
b. To return the price paid less the value of the thing at the time of loss and to pay damages.
c. To return the price paid less the value of the thing at the time of loss.
d. To pay damages.
144. What shall be the extent of liability of the vendor in case of loss of the thing with hidden defects wherein the vendor was not aware of the
defect and the cause of the loss is a fortuitous event or the fault of the vendee?
a. To return the price paid and to pay damages.
b. To return the price paid less the value of the thing at the time of loss and to pay damages.
c. To return the price paid less the value of the thing at the time of loss.
d. To pay damages.
145. What is the prescriptive period of the accion redhibitoria, accion quanti minoris or all other actions to enforce the seller’s liability for hidden
defect?
a. 1 year from the delivery of the thing sold
b. 1 month from the delivery of the thing sold
c. 6 months from the delivery of the thing sold
d. 3 months from the delivery of the thing sold
146. It refers to a defect in an animal and it is of such nature that expert knowledge, even after a professional inspection has been made, is not
sufficient to discover it.
a. Hidden defects
b. Apparent defects
c. Known defects
d. Redhibitory defects
147. If two or more animals are sold together, whether for a lump sum or for a separate price for each of them, the redhibitory defect of one shall
only give rise to its redhibition. What are the remedies of the buyer?
I. Accion redhibitoria over the defective animal.
II. Accion quanti minoris.
a. I only
b. II only
c. Neither I nor II
d. Either I or II
148. If the redhibitory defect of one animal shall give rise to the redhibition of all the animals sold, including the sound one, what shall be the
remedy of the buyer?
I. Acction redhibitoria
II. Accion quanti minoris
a. I only
b. II only
c. Neither I nor II
d. Either I or II
149. What is the prescriptive period of redhibitory action in case of animal?
a. 30 days from the delivery of animal to the vendee.
b. 20 days from delivery of animal to the vendee.
c. 40 days from delivery of animal to the vendee.
d. 10 days from delivery of animal to the vendee.
150. What is the status of the contract of sale when the animals are suffering from contagious diseases or when the animals are found to be
unfit for the use or service for which they were acquired as stated in the contract?
a. Void
b. Voidable
c. Rescissible
d. Unenforceable
151. The following are the requisites in order for the vendor to be liable in case the animal dies of disease, except
a. The disease exist at the time of sale.
b. The disease is the cause of death of the animal.
c. The animal dies within 3 days from time of purchase.
d. The disease is redhibitory.
152. The vendee has the obligation to accept the delivery of the thing sold. The following are the instances when the buyer is deemed to have
accepted the goods, except
a. When he intimates to the seller that he is accepting them.

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b. When he does an act in relation to the goods which is inconsistent with the ownership of the seller.
c. When he pays the purchase price.
d. When he retains the goods after the lapse of a reasonable time without intimating to the seller that he has rejected them.
153. As a general rule, the buyer is not bound to accept delivery of the goods in installments. However, if there is stipulation for installment
delivery, and the seller makes defective deliveries in respect of one or more installments, or the buyer neglects or refuses without just
cause to take delivery of or pay one or more installments, what are the remedies of injured party?
I. Refuse to proceed with the contract and sue for damages for breach of the entire contract.
II. Claim compensation but not damages if the breach is severable.
a. Either I or II
b. Neither I nor II
c. I only
d. II only
154. As a general rule, the buyer has the right to examine the goods before accepting them. The following are the exceptions to the general
rule, except
a. When there is an agreement to that effect.
b. When there is stipulation that the goods shall not be delivered to the buyer until he has paid the price.
c. When the goods are marked with the words collect on delivery.
d. When the usage of trade permits examination.
155. The following are the effects when the buyer refuses to accept delivery and the refusal is justified such as when the quantity is not
complete or the goods being delivered are different from that stipulated, except
a. Buyer has no duty to return goods to the seller unless otherwise agreed.
b. Title to the goods passes to the buyer
c. The buyer shall not be obliged to pay the price.
d. If the buyer constitutes himself as depositary of the goods, he shall be liable as such.
156. The following are the effects when the buyer refuses to accept delivery and the refusal is unjustified , except
a. Title to the goods passes to the buyer from the moment the goods are placed at his disposal.
b. The buyer shall be obliged to pay the price.
c. The buyer shall be considered a depositary.
157. The vendee has the obligation to pay the price of the thing. The time and place of payment of the price shall be that which is stipulated. In
the absence of stipulation, when and where shall the payment of price be made?
a. At the end of the month and at the residence of the seller.
b. At the perfection of the contract and at the residence of the seller.
c. At the time and place of delivery of the thing.
158. The following are the instances wherein the buyer shall pay interest for the period between the delivery of the thing and he payment of the
price, except
a. If there is stipulation for payment of interest and if the rate is not provided, it should be 12%.
b. If the thing sold produces fruits or income
c. If the buyer is in default, from the time of judicial or extrajudicial demand for the payment of the purchase price.
d. If the seller is in default in accepting payment.
159. The following are the grounds for the suspension of the payment of the price by the vendee, except
a. Disturbance in the vendee’s possession or ownership of the thing purchased.
b. Reasonable grounds to fear such disturbance, by a vindicatory action or foreclosure of mortgage.
c. Loss of the thing due to the fault of the vendee.
160. The following are the instances wherein the right to suspend payment is not available, except
a. If the vendor gives security for the return of the price.
b. If there is reasonable grounds to fear disturbance in the vendee’s possession or ownership.
c. If it has been stipulated that the vendee shall pay the price notwithstanding the existence of disturbance or danger.
d. If the disturbance is a more act of trespass.
161. When shall the vendor be entitled to sue for immediate rescission of the contract of sale?
a. If there are reasonable grounds to fear the loss of the immovable property sold and its price.
b. If there are reasonable grounds to fear the loss of the immovable property sold.
c. If there are reasonable grounds to fear the loss of the price.
162. In case there is reasonable ground to fear the loss of the immovable property or its price, what shall be the remedy of vendor?
a. Fulfillment of the contract with damages only.
b. Rescission of the contract with damages only.
c. Immediate rescission of the contract.
d. Fulfillment of the contract of rescission of the contract with damages in either remedy.

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163. This agreement is considered void as it is against public policy. It refers to an agreement between the vendor and the vendee in the sale of
an immovable that rescission of the contract shall of right take place if the vendee fails to pay the price at the time agreed upon.
a. Pactum commissorium
b. Pacto de retro sale
c. Pactum agentum
d. Pacto solidarium
164. Which of the following are the grounds for immediate rescission of the sale of a movable at vendor’s option?
I. If at the time of the delivery of the thing, the vendee does not appear to receive the thing.
II. If at the time of the delivery of the thing, the vendee having appeared, does not pay the price, unless a longer period is stipulated for
its payment.
a. I only
b. II only
c. Both I and II
d. Neither I nor II
165. The following are the actions by the seller for breach of contract of sale of goods, except
a. Maintain an action for the price of the goods if the buyer wrongfully neglects or refuses to pay.
b. Maintain an action for damages if the buyer wrongfully neglects or refuses to accept and pay for the goods.
c. Rescind the contract if the buyer has repudiated the sale or manifested his inability to perform his obligation or has committed a
breach of contract, where the goods have not been delivered to buyer.
166. What action shall be filed by the buyer if the seller has broken the contract to deliver specific or ascertained goods?
a. Bring an action for damages.
b. Bring an action for specific performance.
c. Bring an action for annulment of contract.
d. Bring an action for rescission of contract.
167. In case of breach of warranty by the seller, the buyer may, at his election brings the following actions, except
a. Accept or keep the goods and set up against the seller the breach of warranty by way of recoupment or diminution or extinction
of the price.
b. Accept or keep the goods and maintain an action against the seller for damages for breach of warranty.
c. Refuse to accept the goods, and maintain an action against the seller for damages for breach of warranty.
d. Rescind the sale and refuse to receive the goods or if the goods have already received, return them or offer to return them to the
seller and recover the price of any part thereof which has been paid.
e. Ask for annulment of the contract of sale plus damages.
168. The following are the modes for extinguishment of contract of sale:
a. No-Co-Me-Re-Pa-Lo-Pre-Re-Ful-An
b. Cancellation of sale of personal property payable in installments
c. Resale of the goods by the unpaid seller
d. Rescission of the sale by the unpaid seller
e. Rescission by the buyer in case of partial eviction
f. Rescission by the buyer in case of breach of warranty against hidden defects
g. Rescission by the buyer of sale of animals with redhibitory defects
h. By redemption, whether conventional or legal
169. This type of redemption occur when the vendor reserved the right to repurchase the thing sold with the obligation to return to the vendee
the price of the sale, expenses of the contract and necessary and useful expenses made on the thing sold and to comply with other
stipulations which may have been agreed upon.
a. Legal redemption
b. Conventional redemption
c. Redemption by operation of law
d. Judicial redemption
170. This type of redemption is the right to be subrogated upon the same terms and conditions stipulated in the contract, in the place of one
who acquires a thing by purchase, or dation in payment, or by any other transaction whereby the ownership is transmitted by onerous title.
a. Legal redemption
b. Conventional redemption
c. Voluntary
d. Judicial redemption
171. If no period is stated in the agreement for the exercise of right of redemption, what is the prescriptive period of the right?
a. 5 years from the date of the contract.
b. 4 years from the date of the contract.

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c. 10 years from the date of the contract.
d. 3 years from the date of the contract.
172. If a period is stated in the agreement for the exercise of right of redemption, what is the maximum prescriptive period allowed by the law?
a. 5 years from the date of the contract.
b. 4 years from the date of the contract.
c. 10 years from the date of the contract.
d. 20 years from the date of the contract.
173. In a pacto de retro sale, the following are the persons against whom the right of repurchase may be exercised, except
a. Against the vendee a retro or original vendee.
b. Against the several heirs of the vendee a retro for each heir’s share.
c. Against one heir of the vendee a retro for the whole property.
d. Against every possessor whose right is derived from the vendee a retro even if no mention has made in the second contract of
the right to repurchase and even if the right to repurchase is not recorded in the Registry of Property.
174. In a pacto de retro sale, the following are the rules for redemption
a. A co-owner of an undivided immovable which is essentially indivisible who sells his share with a right to repurchase to a third
person who subsequently acquires the whole thereof, may be compelled by the latter to redeem the whole property, if the former
wishes to make use of the right of redemption.
b. If several persons, jointly and in the same contract, should sell an undivided immovable with a right of repurchase, none of them
may exercise this right for more than his respective share.
c. If the person who sold an immovable alone has left several heirs, each heir may redeem only the part which he may have
acquired.
d. In cases of B and C, the vendee may demand that the co-owners or co-heirs come to an agreement upon the repurchase of the
whole thing, and if they fail to do so, the vendee cannot be compelled to consent to a partial redemption.
e. Each one of the co-owners of an undivided immovable who may have sold his share separately, may independently exercise the
right of repurchase as regards his own share and the vendee cannot compel him to redeem the whole property.
175. Who among the following may use the right of redemption?
I. Vendor a retro
II. Creditor of the vendor after he has exhausted the property of the vendor
a. I only
b. II only
c. Both I and II
d. Neither I nor II
176. The following are the instances of legal redemption, except
a. A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners or of any of them, are
sold to a third person.
b. If a piece of rural land not exceeding one hectare is alienated, the adjoining owner shall have the right of legal redemption unless
the grantee does not own any rural land.
c. If a small piece of urban land which was bought for speculation has been resold, the owner of the adjoining land has a right of
redemption at a reasonable price.
d. If a small piece of urban land is about to be resold, the adjoining owner shall be given the right to buy the property before it is
offered to other.
177. It is a contract which though lacking in formalities nevertheless shows the real intention of the parties to create a specific property to secure
the performance of an obligation.
a. Contract of sale
b. Real estate mortgage
c. Chattel mortgage
d. Equitable mortgage
178. The following are the instances wherein a contract of sale with a right to repurchase and other contract purporting to be an absolute sale
shall be presumed to be an equitable mortgage, except
a. When the price of a sale with a right to repurchase is unusually inadequate.
b. When the vendor remains in possession as lessee or otherwise
c. When the period for the exercise of the right of repurchase is extended.
d. When the purchaser retains for himself part of the purchase price.
e. When the vendee binds himself to pay the taxes on the thing sold.
f. When the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other
obligation.

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179. In case of doubt in construing a contract which has the characteristics of both sale with right to repurchase and an equitable mortgage,
what shall be the construction of the contract?
a. Absolute sale
b. Right with a right to repurchase
c. Equitable mortgage
d. Real Estate Mortgage
180. What shall be the remedy of the parties in cases of contracts presumed to be an equitable mortgage?
a. Ask for rescission of contract.
b. Ask for annulment of contract.
c. Ask for declaration of nullity of the contract.
d. Ask for reformation of the contract.
181. It is a contract whereby a person transfers his credit, right or action against a third person to another person for a consideration which is
certain in money or its equivalent.
a. Contract of sale
b. Assignment of credits
c. Contract of agency
d. Negotiation
182. It is a contract, whereby a person binds himself to render some service or to do something in representation or in behalf of another, with
the consent and authority of the latter.
a. Contract of agency
b. Contract of partnership
c. Contract of sales
d. Contract of pledge
183. The following are the characteristics of a contract of agency, except
a. Principal – it can stand by itself.
b. Preparatory – It is a means by which other contracts may be entered into.
c. Consensual – It is perfected by mere consent.
d. Gratuitous – It is presumed to be gratuitous.
e. Nominate – It has a name given to it by law.
f. Bilateral – The parties are bound reciprocally to it by law.
g. Commutative – The parties give and receive almost equivalent values.
184. What is the status of the contract of agency in case the principal is capacitated and the agent is incapacitated?
a. Voidable
b. Valid and binding
c. Unenforceable
d. Null and void
185. What is the status of the contract entered into by an agent, who is incapacitated, in behalf of the principal who is capacitated?
a. Voidable
c. Unenforceable
d. Null and void
186. The following statements pertain to the principal in a contract of agency, except
a. He is the person whom the agent represents.
b. He must be capacitated.
c. He gives authority to the other party.
d. He acts and represents the other party.
187. What type of relationship exists between the principal and agent?
a. Fiduciary relationship based on trust and confidence.
b. Investor-investee relationship
c. Debtor-creditor relationship
d. Protector-beneficiary relationship
188. Contract of agency may be express or implied. An agency may be implied from the following, except
a. Acts of the principal
b. Silence of the principal
c. Lack of action of the principal
d. Failure of the principal to repudiate the agency knowing that another person is acting in his behalf without authority.
e. Special power of attorney
189. What is the status of the sale of a piece of land of the principal by the agent if the authority of the agent is not in writing?
a. Null and void

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b. Unenforceable
c. Voidable
d. Rescissible
190. What is the status of the contract entered into by the agent in behalf of the principal if the act perform requires special power of attorney
and the authority of the agent is only general?
a. Voidable
c. Unenforceable
d. Null and void
191. If the agency if couched in general terms, only general power of attorney is required even if the principal should state that he withholds no
power, that the agent may execute acts he may consider appropriate or even though the agency should authorize a general or unlimited
management. Which of the following acts can be performed by the agent in this case?
a. Acts of administration.
b. To effect novation.
c. To compromise liability.
d. To submit questions to arbitration.
192. The following acts require special power of attorney from the principal, except
a. To lease any personal property to another person for more than a year.
b. To bind the principal to render some service without any compensation.
c. To bind the principal in a contract of partnership.
d. To create or convey real rights over immovable property.
193. The acceptance by the agent of the contract of agency may be express or implied. The following are considered implied acceptance,
except
a. Acts of the agent to carry out the agency.
b. Silence or inaction by the agent according to the circumstances.
c. Between persons who are present, if the principal delivers his power of attorney to the agent and the latter accepts it without any
objection.
d. Between persons who are absent, when the principal transmits his power to the agent, and the latter returns it with objection.
e. Between persons who are absent, when the principal entrusts to him by letter or telegram a power of attorney with respect to the
business in which he is habitually engaged as an agent, and he did not reply to the letter or telegram.
194. Which of the following statements is incorrect?
a. When a person is appointed as special agent through special information, the person appointed will be considered a duly
authorized agent with respect to the person who received the special information.
b. When a person is appointed as special agent through a public advertisement, the person appointed will be considered a duly
authorized agent with respect to persons who had read the newspaper only.
c. If the announcement of the appointment is by special information, revocation shall be made also by special information.
d. If the announcement of the appointment is by public advertisement, revocation of the appointment shall also be made by public
advertisement.
195. The following are the basic principles of agency, except
a. The agent must act within the scope of his authority.
b. The agent may do such acts as may be conducive to the accomplishment of the purpose of the agency.
c. The limits of the agent’s authority shall be considered exceeded even it has been performed in a manner more advantageous to
the principal than that specified by him.
d. The agent must act in behalf of his principal and should disclose the principal.
196. The following are the effects if the agent acts within the scope of his authority but in his (agent’s) behalf or without disclosing the principal,
except
a. The principal has no right of action against the person with whom the agent has contracted.
b. The person with whom the agent has contracted has no right of action against the principal.
c. The agent is directly bound in favor of the one with whom he has contracted.
d. The contract does not bind the third person and the principal even if the contract involves thing belonging to the principal.
197. A, an agent of P, sold the car of P to X in his own name and without disclosing P as his principal. Which of the following statements is
correct?
a. The contract does not bind P because the agent acts in his own name.
b. The contract is unenforceable as regards to P.
c. The contract is null and void.
d. The contract binds P and X because it involves the property of the principal.

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198. What is the status of the contract entered into by the agent in excess of the authority of his principal and in the name of the principal or by
a person without authority of another but in the latter’s behalf?
a. Rescissible unless ratified by the principal
b. Voidable unless ratified by the principal
c. Unenforceable unless ratified by the principal
d. Null and void unless ratified by the principal
199. What is the status of the contract entered into by the agent in excess of the authority of the principal and in his own behalf?
a. The contract is enforceable in favor of the principal.
b. The contract is rescissible in favor of the principal.
c. The contract is valid and binding against the agent.
d. The contract is null and void.
200. What is the obligation of a person appointed as an agent but declines the appointment?
a. He shall deliver and return the goods.
b. He shall pay for the price of the goods.
c. He shall observe diligence of a good father of a family in the custody and preservation of the goods.
d. He has no obligation over the goods.
201. The following are the general obligations of an agent, except
a. To carry out the agency.
b. To be liable for damages through the non-performance, the principal may suffer.
c. To finish the business already begun on the death of the principal, should delay entail any danger.
d. To continue the agency despite the fact that its execution would manifestly result in loss or damage.
202. The following are the special obligations of an agent, except

a. To advance the necessary funds if there was stipulation to that effect except when the principal is insolvent.
b. To act in accordance with the instructions of the principal in the execution of the agency and in the absence of instructions of the
principal, he shall exercise the diligene of a good father of a family.
c. No to carry out an agency if the execution would manifestly result in loss or damage to the principal.
d. To be liable for damages if there being a conflict between interest and that of the principal, he should prefer his own.
e. To lend money to the principal at current interest rate if he has been authorized to borrow money.
f. To borrow money of the principal at current interest rate without the principal’s consent, if the latter has authorized him to lend
principal’s money at interest.
g. To render an accounting of his transactions and to deliver to the principal whatever he may have received by virtue of the
agency, even though it may not be owing to the principal. Any obligation exempting the agent from the obligation to render an
account shall be void.
h. To be liable for interest on the sums he has applied to his own use from the day on which he did so and those which he still owes
after the extinguishment of the agency.
i. To be responsible not only for fraud, but also for negligence which shall be judged with more or less right by the court.
203. The following are the rules that shall be observed as regards to the liability of agent when he appoints a substitute, except
a. If the agent is not prohibited to appoint a substitute, the agent may appoint a substitute but he shall be responsible for the acts of
the substitute.
b. If the agent is authorized to appoint a substitute and the principal designated the person to be appointed as substitute, the agent
is not responsible for the acts of the substitute.
c. If the agent is authorized to appoint a substitute and the principal does not designate the person to be appointed as a substitute,
the agent shall be liable if the person appointed as substitute is notoriously incompetent or insolvent man.
d. If the agent is prohibited to appoint a substitute, the agent cannot appoint a substitute. If he appoints one, all the acts of the
substitute shall be voidable.
204. What is the degree of liability of two or more agents if thet have been appointed simultaneously?
a. Joint and severally unless agreed otherwise.
b. Joint or proportionate unless agreed otherwise.
c. Solidary unless agreed otherwise.
d. No liability unless agreed otherwise.
205. The general rule is that the agent who acts in the name of the principal shall not be liable to the party with whom he contracts. The
following are the exceptions to the general rule, except
a. If the agent expressly binds himself.
b. If the agent exceeds the limits of his authority without giving such party sufficient notice of his powers.
c. If the agent acts without the authority of the principal.
d. If the principal ratifies the acts of the agent which exceed the limits of his authority.
206. What is the status of the contract entered into by the agent without or beyond the authority of the principal if the other party was aware of
the agent’s acting beyond the limits of his authority?
a. If the agent did not undertake to secure the principal’s ratification, the contract shall be unenforceable.
b. If the agent did not undertake to secure the principal’s ratification, the contract shall be void.

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c. If the agent did not undertake to secure the principal’s ratification, the contract shall be voidable.
d. If the agent did not undertake to secure the principal’s ratification, the contract shall be valid.
207. The following are the rights and obligations of third persons who have contracted with an agent who has exceeded his authority, except
a. As to third persons, an act is deemed to have been performed within the scope of the agent’s authority, if such act is within the
power of attorney, as written, even if the agent has in fact exceeded the limits of his authority according to an understanding
between the principal and the agent.
b. A third person cannot set up the fact that the agent has exceeded his powers, if the principal has ratified or has signified his
willingness to ratify the agent’s acts.
c. A third person may require the agent to present his power of attorney or the instructions as regards the agency.
d. Private or secret orders and instructions of the principal prejudice third persons who have relied upon the power of attorney or
instructions shown them.
208. He is a person who buys and sells goods or chattels consigned or delivered to him by his principal, for a compensation known as
commission.
a. Ordinary agent
b. Partnership agent
c. Commission agent
d. Preferred agent
209. The following are the obligations of a commission agent, except

a. To be responsible for the goods received by him in the terms and conditions and as described in the consignment unless upon
receiving them he should make a written statement of the damage and deterioration suffered by the same.
b. To distinguish by countermarks goods of the same kind and mark which belong to different owners, and designate the
merchandise respectively belonging to each principal.
c. To sell the goods on credit.
d. To bear the risk of collection and to pay the principal the proceeds of the same on the same terms agreed upon with the
purchaser if he receives on a sale, in addition to the ordinary commission, another called a guarantee commission.
e. To be liable for damages if he does not collect the credits of the principal at the time they become due and demandable, unless
he proves that he exercised due diligence for that purpose.
210. P gives a general power of attorney to A to sell P’s goods for P10,000 cash for a commission. A sells the goods on a 15-day credit term for
P11,000 to B without authority from P. What is the right of P if he does not ratify the sale on credit?
a. P may demand immediate payment of P11,000 from A.
b. P may demand immediate payment of P10,000 from A and A gets the excess of P1,000.
c. P may get the excess of P1,000.
d. A cannot be compelled to pay P10,000 immediately.
211. Using the same data in number 210, what is the right of P if he ratifies the sale on credit?
a. P may demand P11,000 from A immediately.
b. P may collect P11,000 upon payment of B.
c. P may only collect P10,000.
d. A shall only account P10,000 to P.
212. The following are the obligations of the principal in the contract of agency, except
a. To comply with all the obligations which the agent may have contracted within the scope of his authority.
b. To be bound for any obligation wherein the agent exceeded his power if he ratifies such obligation expressly or tacitly.
c. To be solidarily liable with the agent if he allowed the latter to act as though he had full powers when the agent exceeded his
authority.
d. To advance to the agent the sums necessary for the execution of the agency should the agent so request.
e. To reimburse the agent the sums advanced by the seller even if the business or undertaking was not successful provided that the
agent is free from fault including the interest on the sum.
f. To indemnify the agent for all damages which the execution of the agency may have caused the latter, without the fault or
negligence on his part.
g. When two or more persons have appointed an agent for a common transaction or undertaking, the principals
h. shall be jointly liable for all the consequences of the agency.
213. The following are the instances wherein the principal shall not be liable for the expenses incurred by the agent, except
a. When the agent acted in contravention of the principal’s instructions and the principal avails himself of the benefits derived from
the contract.
b. When the expenses were due to the fault of the agent.
c. When the agent incurred them with knowledge that an unfavorable result would ensue if the principal was not aware thereof.

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d. When it was stipulated that the expenses would be borne by the agent, or that the latter would be allowed only a certain amount.
214. What is the right of the agent over the object of the agency until the principal reimburses him for the sums necessary for the execution of
the agency which he had advanced and until the principal pays him the indemnity for all damages in the execution of the agency?
a. Right to appropriate the property.
b. Right to sell the property.
c. Right to retain in pledge the property or legal pledge.
d. Right to destroy the property.
215. When two persons contract with regard to the same movable thing, one of them with the agent, and the other with the principal, and the
two contracts are incompatible with each other, who between the buyers shall be preferred?
a. First possessor in good faith.
b. The buyer of the principal.
c. The buyer of the agent.
d. Person with older title.
216. When two persons contract with regard to the same immovable thing, one of them with the agent, and the other with the principal, and the
two contracts are incompatible with each other, who between the buyers shall be preferred?
a. First registrant in good faith.
b. First possessor in good faith.
c. Buyer with older title.
d. Buyer of the principal.
e. Buyer of the agent.
217. The following are the modes of extinguishment of agency: (EDWARD)

a. E – Expiration of the period for which the agency was constituted.
b. D – Death, Civil interdiction, Insanity or Insolvency of the principal or agent.
c. W – Withdrawal of the agent.
d. A – Accomplishment of the object or purpose of the agency.
e. R – Revocation of the agency by the principal.
f. D – Dissolution of the firm or corporation which entrusted or accepted the agency.
218. Revocation refers to the act of the principal of terminating the agency at will. The principal may revoke the agency at will and compel the
agent to return the document evidencing the agency. The revocation may be express or implied. The following acts are considered implied
revocation, except
a. When a new agent is appointed for the same business or transaction.
b. If the principal directly manages the business entrusted to the agent, dealing directly with third persons.
c. When a special power of attorney is granted to an agent with a general power of attorney.
d. When the principal assist the agent.
219. The following are the instances when agency may not be revoked at will, except
a. If a bilateral contract depends upon an agency.
b. If the agency is a means of fulfilling an obligation already contracted.
c. If a partner appointed a manager of a partnership in the contract of partnership and his removal from the management is
unjustifiable.
d. If the agency is for the benefit of the principal.
220. The following statements concerning revocation are true, except
a. If the agency has been entrusted for the purpose of contracting with specified persons, the principal must give a timely notice of
the revocation to such third persons.
b. If the agent had general powers, he was entrusted to contract with general public or any person, revocation of the agency does
not prejudice third persons who acted in good faith and without knowledge of the revocation.
c. Notice of revocation of general powers in a newspaper of general circulation is sufficient warning to third persons.
d. Revocation does not bind third persons who had knowledge thereof.
221. The following statements concerning withdrawal by the agent are true, except
a. The agent must give notice to the principal of the withdrawal.
b. The agent must indemnify the principal for any damage suffered by reason of the withdrawal.
c. The agent shall not be liable for withdrawal if it is based upon the impossibility of continuing the performance of the agency
without grave detriment to himself.
d. The agent who withdraws should not take care of the object of the agency if his reason is valid.
222. As a general rule, the death of the principal extinguishes the agency. However, the agency is not extinguished in the following instances,
except
a. If the agency has been constituted in the common interest of the principal and the agent.
b. If the agency has been constituted in the interest of a third person who has accepted the stipulation in his favor.

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c. If the agency has been constituted in favor of the principal.
223. What is the status of the acts done by the agent after the death of the principal or other cause of extinguishment of the agency?
a. The acts are unenforceable because the agency is already extinguished.
b. The acts are null and void because the agency is already extinguished.
c. The acts are valid if done with the knowledge of the death of the principal or of any other cause of extinguishment and shall be
fully effective with respect to third persons who may have contracted in bad faith.
d. The acts are valid if done without the knowledge of the death of the principal or of any other cause of extinguishment and shall
be fully effective with respect to third persons who may have contracted in good faith.

Page 26 of 25

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DE LA SALLE LIPA

College of Business, Economics, Accountancy and Management

COVERAGE: Contract of Sales

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

99. When are the goods in transit?

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

202. The following are the special obligations of an agent, except

DLSL CPA Board Operation - Business Law

209. The following are the obligations of a commission agent, except

DLSL CPA Board Operation - Business Law

217. The following are the modes of extinguishment of agency: (EDWARD)

DLSL CPA Board Operation - Business Law

DLSL CPA Board Operation - Business Law

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