Law on Obligations and Contracts

I. MULTIPLE CHOICES

1. Which of the following statements is false?

a. Accomplishment of work by metrical units is a divisible obligation.
b. Execution of a certain number of days of work shall be deemed divisible.
c. An obligation to pay a certain amount in ten annual installments is divisible.
d. Obligations to give definite things and those that are not susceptible of partial performance shall be
deemed divisible.

2. It is a mode of extinguishing an obligation when two persons in their own right are creditors of each other.

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a. Confusion

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b. Compensation

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c. Novation

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d. Reformation

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3. Contracts entered into in a state of drunkenness or during a hypnotic spell are:
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a. Perfectly valid
b. Void
c. Voidable
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d. Unenforceable
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4. A contract is in the stage of conception when:

a. Contract is perfected.
b. There is meeting of minds.
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c. Negotiation are in progress.

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d. The parties come to an agreement.

5. Which is not an element of an obligation?

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a. Vinculum juris
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b. Obligee
c. Prestation
d. Consent

6. Which of the following is not an element of legal compensation?

a. Debts to be compensated are due and demandable.
b. There is controversy or adverse claim over any debts to be compensated.
c. There are two or more persons who are creditor or debtors of each other.
d. There are two or more debts of the same kind.

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 7. All of the following are considered as sources of obligation except:
a. Law
b. Quasi-Contracts
c. Tort
d. All of the above are correct

8. When the debtor binds himself to pay when his means permit him to do so, the obligation is:
a. Pure
b. Simple
c. Conditional
d. With a period

9. It is the delay in the giving or delivering of a thing.

a. Mora solvendi ex re

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b. Mora solvendi ex persona
c. Mora accipiendi ex re

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d. Mora accipiendi ex persona

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10. When the fulfillment of the condition depends upon the sole will of the debtor, the conditional obligation
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shall be
a. With a Period
b. Conditional
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c. Void
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d. Unenforceable
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11. Through insidious words or machinations, A was able to induce B to enter into a contract which without
them B would not have agreed to it. There is
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a. Mistake
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b. Fraud
c. Undue Influence
d. Misrepresentation
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12. An obligation ceases to be alternative and becomes a simple obligation in the following cases, except when:
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a. The debtor has communicated his choices to the creditor

b. The right of choice has been expressly granted to the creditor and his choice has been communicated to
the debtor
c. Three prestations are due but one of them is unlawful or impossible.
d. Among the several prestations that are due only one is practicable.

13. It is a right enforceable against the whole world.

a. Personal right
b. Real right

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 c. Both A and B
d. None of the above

14. All of the following are special forms of payment except

a. Solutio indebiti
b. Dation in payment
c. Application of payment
d. Payment by cession

15. Karl owes Ezequiel P100,000. On due date, Karl proposes to Ezequiel to accept a bracelet in payment of
Karl’s debt of P100,000. This is an example of
a. Tender of payment
b. Dation in payment
c. Application of payment

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d. Payment by cession

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16. It is a thing that is particularly designated or physically segregated from all others of the same class.
a. Generic thing

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b. Determinate thing
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c. Indeterminate thing
d. None of the above
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17. Karl is obliged to give Mr. DJ a specific car if Mr. DJ passes the CPA Licensure Examination. Karl’s obligation
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is an example of:
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a. Pure obligation
b. Obligation with a period
c. Obligation with a suspensive condition
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d. Obligation with resolutory condition

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18. These refer to those produced by land of any kind through cultivation or labor.
a. Industrial fruits
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b. Civil fruits
c. Natural fruits
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d. None of the above

19. These refer to fruits which are the result of a juridical relation.
a. Industrial fruits
b. Civil fruits
c. Natural fruits
d. None of the above

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 For items 20 – 22
A, S, and C are obliged to give X, Y, and Z P36,000.

20. A, S and C are joint debtors, while X, Y, and Z are solidary creditors. How much may X collect from C?
a. P36,000
b. P12,000
c. P4,000
d. P0

21. A, S and C are joint debtors, while X, Y, and Z are joint creditors. How much may Z collect from A?
a. P36,000
b. P12,000
c. P4,000
d. P0

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22. A, S and C are solidary debtors, while X, Y, and Z are solidary creditors. How much may Z collect from A?

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a. P36,000
b. P12,000

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c. P4,000
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d. P0

23. K and L are jointly obliged to give a specific horse to M. This is an example of:
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a. Joint divisible obligation

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b. Joint indivisible obligation

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c. Either A or B
d. Neither A or B
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24. It is the right to enjoy the fruits of the thing belonging to another.
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a. Personal right
b. Real right
c. Usufruct
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d. None of the above

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25. It is when the thing disappears as if its existence is unknown or if known, it cannot be recovered, as a
matter of fact or of law.
a. Civil loss
b. Physical loss
c. Legal loss
d. None of the above

26. The following are classifications of conditions as to cause or origin except:

a. Potestative
b. Casual

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 c. Mixed
d. All of the above are correct

27. An obligation is extinguished upon the happening of a certain event.

a. Resolutory period
b. Suspensive period
c. Legal period
d. Judicial period

28. An obligation arises upon the happening of a certain event or period.

a. Resolutory period
b. Suspensive period
c. Legal period
d. Judicial period

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29. It is solidarity on the part of the creditors, where anyone of them can demand payment of the entire

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obligation from anyone of the debtors.
a. Mixed solidarity

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b. Passive solidarity
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c. Active solidarity
d. Legal solidarity
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30. STATEMENT I: Principal obligation is one which can stand by itself and its validity and existence do not
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depend on another obligation. T

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STATEMENT II: Solidarity is presumed if there are two or more persons in the same obligation. F – IS NOT
a. First statement is true, second statement is false.
b. First statement is false, second statement is true.
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c. Both statements are true.

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d. Both statements are false.

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II. TRUE OR FALSE

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1. An obligation is a juridical necessity to give, to do or not to do. T

2. Residence is the place where he has his true permanent home and to which place he, whenever he is
absent, has the intention of returning. F - DOMICILE
3. The conveyance of ownership of a thing as an accepted equivalent of performance is called payment by
cession. F – DATION IN PAYMENT
4. Application of Payments is the designation of the debt to which should be applied the payment made by a
debtor who has various debts of the same kind in favor of one and the same creditor. T
5. Legal tender Is that currency which if offered by the debtor in the right amount, the creditor must accept in
payment of a debt in money. T

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 6. ASC owes BCD P10,000.00. BCD owes ASC an electric range worth P10,000.00. No compensation will take
place. T
7. As a general rule, no person shall be liable for fortuitous events. T
8. Delay can never exist without demand. F – THERE ARE EXCEPTIONS
9. Payment means only the delivery of money. F – NOT ONLY
10. In expromision, it is the debtor who initiates the substitution. F – DELEGACION
11. In delegacion, a third person initiates the substitution and assumes the obligation even without the
knowledge or against the will of the debtor. F – EXPROMISION
12. If the obligation does not fix a period, but from its nature and circumstances it can be inferred that a period
was intended, the court may fix the period. T
13. In all cases, the effect of fulfillment of the suspensive condition retroacts to the day of the constitution of
the obligation. F – THERE ARE EXCEPTIONS
14. Mora accipiendi is the delay on the part of the debtor. F – CREDITOR
15. A divisible obligation is one capable of partial performance. T

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16. ASC and BCD are jointly obliged to Mr. X to construct a pavement 1.5 meters wide and 10.5 meters long.
This is an example of joint divisible obligation. T

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17. A waiver for future fraud is valid. F – VOID
18. Negligence is the omission of that diligence which is required by the nature of the obligation and

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corresponds with the circumstances of the person, of the time, and of the place. T
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19. Dolo causante refers to fraud without which consent would have still been given but the person giving it
would have agreed on different terms. F – DOLO INCIDENTE
20. Dolo incidente refers to fraud without which consent would have still been given but the person giving it
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would have agreed on different terms. T

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21. Moral damages include physical suffering, mental anguish, moral shock and social humiliation. T
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22. Negotiorum gestio refers to the voluntary administration of the property, business or affairs of another
without his consent or authority. T
23. Negotiorum gestio refers to payment by mistake of an obligation which was not due when paid. F –
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SOLUTIO INDEBITI
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24. Period is a space of time which determinates the effectivity or extinguishment of an obligation. T
25. In dation in payment, the debtor is not released as a rule. F – IS RELEASED
26. Payment by cession affects all the debtor’s properties, except those exempt from execution. T
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27. If the value of the property exceeds P3,000, the remission and the acceptance must be in writing. F –
P5,000
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28. Merger extinguishes only the share of the joint debtor or creditor in whom the characters of debtor and
creditor concur. T
29. In alternative obligation, one of the two or more prestation must be fulfilled. T
30. The right of choosing the prestation to be given, as a general rule, belongs to the debtor. T
31. Novation is the gratuitous abandonment by the creditor of his right. F – CONDONATION
32. Condonation refers to forgiveness of an indebtedness. T
33. The penal clause is generally undertaken to insure performance and works as either, or both, punishment
and reparation. T
34. In all cases, the penalty takes the place of the damages and interest in case of non-compliance. F – AS A
GENERAL RULE

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 35. Alternative obligation is an obligation where only one prestation is due but the debtor may render another
in substitution. F – FACULTATIVE
36. Facultative obligation is an obligation where only one prestation is due but the debtor may render another
in substitution. T
37. If the new obligation is void, the novation is void. T
38. The novation is void if the original obligation is void. T
39. The nullity of the penal clause carries with it that of the principal obligation. F – DOES NOT CARRY
40. The nullity of the principal obligation carries with it the nullity of the penal clause. T

Prepared by:
Maeren Apple Agbing

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Reference:
Soriano, F. (2016). Notes in Business Law. Manila, Philippines.

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