SISC/QSF-OCD-007

Rev 005 6/5/14 Date: _______________

Final Term Examination

Second Semester, AY 2018-2019
Business Law 1: Law on Obligations and Contracts

Name: ____________________________________ Student Number: _______________

Course: ____________________________________ Subject: ______________________

Integrity is one’s refusal to cheat.

My actions define my character.

_______________________
Signature of Student

_____________________________________________________________________________________
I. Distinction of Terms

Factors Culpa Criminal Culpa Aquiliana

Interest Involved

Purpose

Evidence

Liability

Intention

Factors Fraud Negligence

Proof

Intention

Waiver

Mitigation of Liability

Reduction by Courts
 Factor Law Contract

Autonomy of Will

Mutuality

Factor Culpa Criminal Culpa Aquilana

Kind of Source

Contractual
Relationship

Proof

II. Choose the CORRECT answer. (2 points each)

1. Which of the following is considered a quasi-contract?

a. Solutio Indebiti
b. Voluntary management of the property or affairs of another without the
knowledge or consent of the latter.
c. Payment by mistake
d. All of the Above
e. None of the Above

2.
Statement 1: The receipt of the principal obligation without reservation as to the
payment of interest shall raise a conclusive presumption that the interest is also
paid.

Statement 2: The receipt of the latter installments of a debt without reservation as

to prior installment, shall raise a conclusive presumption that the prior installment is
also paid.

a. Both are true

b. Both are false
c. No. 1 is true; No. 2 is false
d. No. 1 is false; No. 2 is true

3. Which of the following is not a requisite of Law in strict legal sense?

a. Obligatory
b. Promulgated by the Executive Department
c. Common Observance
d. Rule of Action
e. All of the above

4. Which of the following is not a law?

a. Constitution
b. Executive Order
 c. Customs
d. Administrative Order
e. All of the Above
f. None of the Above

5. The debtor is considered to be in default after there has been a judicial or

extrajudicial demand except:
a. when stipulated by the parties
b. demand would be useless
c. when time is of the essence
d. all of the above
e. none of the above
f. by provision of law

6. The following are requisites for the application of fortuitous event under Article
1174, except:
a. The event must be independent of the human will
b. The event could not be foreseen
c. The Debtor must be free from any contributory negligence
d. The Debtor must exercise diligence of a good father of the family
e. The event rendered the performance impossible
f. None of the above

7. The following are the remedies available to the creditors for the satisfaction of
their claim, except:
a. Exact fulfillment
b. Levy of property
c. Accion Subrogatoria
d. Rescissory Action
e. None of the Above

8. Not a source of damages

a. Negligence
b. Causal Fraud
c. Incidental Fraud
d. Breach
e. Default
f. None of the above

9. The delay on the part of the creditor to accept the performance of an obligation:
a. mora solvendi
b. mora accipiendi
c. compensation morae
d. culpa aquiliana

10. The buyer has the real right to the fruits of the thing from:
a. the time the thing is to be delivered
b. the time the contract is perfected
 c. the time the obligation is to be performed
d. the time the fruits are delivered
III. Essay: A mere yes or no without any justification is no answer at all.

A. Velasco booked a plane ticket with Mabuhay Mammathay Airlines for a trip to
Timbuktu on a Christmas get away under Piso Fare. However, on the day of her
Flight on 14 December 2018, Velasco was not able to take the flight due to
overbooking by Mabuhay Mammathay Airlines. Velasco filed an action on account of
Quasi-Delict against Mabuhay Mammathay Airlines. As a defense, the lawyer of
Mabuhay Mammathay Airlines moved for the dismissal and alleged that there is no
quasi-delict in the instant case as the plane ticket is considered a contract on its
own. Decide. (5 points)

B. Lala was one hot head turner in Southville International School and Colleges. Lala
was then enrolled in Business Law 1. During the first day of class on 1 December
2018, Arboleda was rushing into the room as he was already late for the class. Upon
opening the door, Arboleda bumped into Lala who was then about to go to the rest
room. They just fell in love with each other. All throughout the class, Lala and
Arboleda were just exchanging handwritten notes and were not listening to the
discussion of Atty. Melitante. At the end of the class, Lala said “Yes” to Arboleda.
Lala has then an existing record that all her relationships would never last a week.
Arboleda was very confident that his relationship would last more than a week. In
preparation to their “WEEKSARY”, Arboleda closed “Villa Kahalayan” for 7 December
2018 and paid the amount of Php20,000.00. However, “Villa kahalayan” was the
subject of a raid on 5 December 2018 as found to be a den of prostitution and, on
the same day, was ordered close for lying its true line of business as its represents to
be a fine dine restaurant. Arboleda would then want to recover the amount paid for
the reservation. The lawyer for “Villa Kahalayan” refused as there was no demand
made by Arboleda to make him in default. Decide (5 points)

C. Explain the Rules in cases of Loss, Deterioration and Improvement in a Real

Determinate Obligation subject to a Resolutory condition. (5%)

D. Explain the Rules regarding the Responsibility of the debtor in an alternative

obligation where the right of choice is given to the creditor. (5%)
E. Mah is preparing for his birthday celebration as he turns a year older next year of
January. Mah opted to celebrate a Bikini Foam Party at 5 th Avenue Bar and Resto.
Kimble, owner of 5th Avenue Bar and Resto, required Mah to pay the down payment
of Php 50,000.00 before the end of September. Mah really wanted to pursue his
party and the venue, he loan an amount of Php 50,000.00 to his friend, Laca. While
Laca is close to Mah, he do not fully trust Mah that the latter can pay the full amount
as agreed. With intention to get more money from Mah, Laca imposed a penalty of
Php 10,000.00 once Mah cannot pay the amount of Php 50,000.00 at the end of
October. True enough, Mah was not able to pay the loan amount at the end of
October. Mah promised to pay the loan obligation on a later date. However, Mah
insisted that he shall only pay the amount of Php 50,000.00. If in case there is a
need to impose a penalty, the penalty shall be imposed only at the legal rate of
interest of 12% per annum as stated under the law. Further, Mah argued that Laca
did not suffer any damages for his none payment of the loan obligation as the
amount borrowed was only deposited for safekeeping and, in fact, Laca would be
earning income based on the legal rate of interest. Decide with reasons. (10%)

F. Buera owes Caiisip Php 10,000.00 which was supposed to be paid on 30 September
2018. Buera won in a bet with Calpo regarding the game of Gilas Pilipinas in the FIBA
World Cup. Calpo paid Buera the amount of Php 10,000.00. Thus, Buera decided to
pay Caiisip on 3 September to relieve him from his obligation. However, on 4
September 2018, Buera demanded to recover the amount paid as he still needs
money for his date on 6 September 2018 and argued that his obligation still due on
30 September 2018. Caiisip refuses to return the amount paid. Decide and Explain.
(10%)

G. Morato obligated himself to give Iiyama a New Toyota Fortuner if the latter will get
100 in the Business Law 2 Midterm Examination on 3 March 2019. Morato contacted
Genabe and connived to declare a Bomb Threat during the Business Law 2 Midterm
Examination. However, Morato had a second thought of the Bomb Threat as he was
scared of being put into jail once discovered. Thus, Morato called Genabe on 2 March
2019. However, Genabe was not able to study for the examination. Genabe
proceeded with the Bomb Threat leading to the cancellation of Midterm Examination.
Iiyama demanded to Morato the New Toyota Fortuner as it would be impossible for
him to take the examination and get 100 due to the Bomb Threat. Morato refused.
Decide. (10%)
Prepared by: Reviewed by:

Atty. Christian George L. Melitante Ms. Minerva Janne D. Ganaden, MBA

Instructor Program Coordinator, College of Business

Approved by: Noted by:

Dr. Victor C. Manabat, DBA Dr. Felma C. Tria, Ed.D

Dean, College of Business College Director