CHAPTER 4

EXTINGUISHMENT OF OBLIGATIONS

GENERAL PROVISIONS

Group 4

Art. 1231- 1274

TRUE/FALSE

1) Payment to a person who is incapacitated to administer his property shall be not valid if he has kept
the thing delivered, or insofar as the payment has been beneficial to him. T

2) Extinguishment is the destruction of a right contract. T

3) The rule is that the creditor is bound to accept payment by a third person who has no interest in the
fulfillment of the obligation. F

4) The rule is that a receipt of payment is the best evidence of the fact of payment. T

5) Payment made in good faith to any person in possession of the credit shall release the debtor. T

6) Payment means not only the delivery of money but also the performance, in any other manner, of an
obligation. T

7) The debtor is not bound to accept payment or performance by a third person who has no interest in
the fulfillment of the obligation, unless there is a stipulation to the contrary. F

8) In subrogation, recourse can be had to the mortgage or guaranty or penalty. T

9) The debtor's right to apply payment is mandatory. F

10) As a rule, payment by an incapacitated person is valid. T

11) The expenses of consignation when property made, shall be charge against the creditor. T

12) The debt procedures interest, payment of the principal shall not be deemed to have been made until
the interests have been covered. T

13) Confusion does not extinguish a joint obligation except as regards the share corresponding to the
creditor or debtor in whom the two characters concur. T

14) The renunciation of the principal debt shall extinguish the accessory obligations but the waiver of
the latter shall leave the former in force. T

15) In an obligation to deliver a generic thing, the loss or destruction of anything of the same kind does
extinguish the obligation. F
Multiple choices

1) When the entire obligation is extinguished. Total

2) It refers to that which constituted by agreement of the obligee and the obligor. Inter vivos

3) If the obligation is __ in the sense that the object thereof is designated merely by its class or genus
without any particular designation or physical segregation from all others of the same class. Generic

4) When the service has become so difficult as to be be manifestly beyond the contemplation of the
parties, the obligor may also be released therefrom, in whole or in part. Art. 1267

5) The debtor in obligations to do shall alao be released when the prestation becomes legally or
physically impossible without the fault of the obligor. Art. 1266

6) It is a normal business risk for those engaged in the repair of the motor vehicles. Carnapping

7) When it is made in accordance with the formalities prescribed by law for donations. Express

8) The obligation having been extinguished by the loss of the thing, the creditor shall have all the rights
of action which the debtor may have against third persons by reason of the loss. Art. 1269

9) The right to bring a specific case to court. Right of action

10) It is the act of depositing the thing due with the court or judicial authorities. Consignation

PART 2

EXTINGUISHMENT OF OBLIGATIONS

SECTION 4. – CONFUSION OR MERGER OF RIGHTS

Group 2

Art. 1275- 1304

TRUE OR FALSE

1) Compensation shall be proper when one of the debts arises from a depositum or from the obligation
of a depository or of a bailee in commdatum. F

2) As a general rule, no form of words or writhing is necessary to give effect to a novation. T

3) A debt is an amount actually ascertained. T

4) Novation is never presumed, and the animus novandi, must appear by express agreement of the
parties, or by their acts that are too clear and unmistakable. T

5) Compensation may be total or partial. When the two debts are of the same amount, there is partial
compensation. F

6) In compensation, there must be two persons, who, in their own right, are creditors and debtor of
each other. T

7) In confusion, there are two persons in who is merged the qualities of creditor and debtor. F

8) Conventional compensation occurs when the parties agree to the mutual extinguishment of their
credits or to compensate their mutual obligations even in the absence of some of the legal requisites. T

9) Neither can compensate be set up against a creditor who has a claim for support due by gratuitous
title. T

10) Debts can be compensated if one of the debts consists in civil liability arising from penal offense. F

MULTIPLE CHOICES

1) If one of the parties to suit over an obligation has a claim for damages against the other, the former
may set it off by proving his right to said damamges and the amount thereof. Judicial compensation

2) The following debts cannot be compensated, except: Contract arising from contract mutuum

3) Is constituted from the moment a person receives a thing belongings to another, with the obligation
of safely keeping it and of returning the same. Contract of deposit

4) One of the parties delivers to another, either something not consumable so that the latter may use
the same for a certain time and return it. Contract of commodatum

5) Obligations may be modified by: None of the above

6) Is the extinguishment of an obligation by the substitution or change of the obligation by subsequent

one which extinguishes or modifies the first, either by changing the object or principal conditions, or by
substituting another in place of the debtor, or by subrogatoring a third person in the rights of the
creditor. Novation

7) Is the meeting I the same person of the qualities of creditor and debtor with respect to one and the
obligation. Compensation

8) Is a claim which has been formally passed upon by the highest authority. Debt
9) Occurs when the parties agree to the mutual extinguishment of their credits or to compensate their
mutual obligations even in the absence of some of the legal requisites. Conventional compensation

10) In order that a novation can take place, the concurrence of the following requisites are
indispensable, except: There must be a previous void obligation

11) Is made either by changing the object or the principal conditions? Real novation

12) When the old obligation subsists to the extent that it remains compatible with the amendatory
agreement. Total novation

13) The debtors offers, and the creditor accepts, a third person who consents to the substitution and
assumes the obligation. Delegacion

14) Means the original debtor. Delegante

15) Novation by substituting the person of the debtor or subrogating a third person to the rights of the
creditor. Subjective novation

Title II. – CONTRACTS

CHAPTER 1

GENERAL PROVISIONS

Group 1

Art. 1305-1355

TRUE/FALSE

1) Contracts are law between the parties, and they are bound by its stipulations. T
2) The determination of the performance may be left to a third person whose decision shall not be
binding until it has been made known to one of the contracting parties. T
3) Once the minds of the contracting parties meet, a valid contract exists, whether it is reduced to
writing or not. T
4) Contract agreed to in a state of drunkenness or during a hypnotic spell is voidable. T
5) A contract of lease is generally transmissible to the heirs of the lessor or lease. T
6) Contracts entered into during a lucid interval are valid. T
7) When all the essential requisites are present, contract is obligatory in whatever form it may have
been entered into. T
8) In order that mistake may invalidate consent, it should refer to the substance of the thing which is
the object of the contract. T
9) A voidable contract produces no effect either against or in favor of anyone and cannot be ratified. T
10) A mere expression of an opinion does not signify fraud. T

M-CHOICES

1) Those which are perfected by the mere agreement of the parties. Consensual

2) Is constituted from the moment a person receives a thing belonging to another with the obligation
of safely keeping it and of returning the same. Deposit

3) Any third person who induces another to violate his contract shall be liable for damages to the other
contracting party. Tort interference

4) Those which can subsist independently from other contracts and whose purpose can be fulfilled by
themselves. Principal

5) Those which have their own individuality and are regulated by special provisions of law. Nominate

6) It is a meeting of minds between two persons whereby one hinds himself, with respect to the other,
to give something or to render some service. Contract

7) Those which are perfected by the mere agreement of the parties. Consensual contract

8) An imperfect promise which is merely an offer. Policitacion

9) A deception used by one party prior to or simultaneous with the contract, in order to secure the
consent of the other. Needless to say, the deceit employed must be serious. Causal fraud
10) There is a colorable contract but it has no substance as the parties have no intention to be bound by
it. Absolute simulation

11) Is manifested by the meeting of the offer and the acceptance upon the thing and the cause which
are to constitute the contract. Consent

12) A brief period during which an insane person regains sanity sufficient to have the legal capacity to
contract and act on his or her own behalf. Lucid interval

13) When the contract lacks one of the essential elements, the contract is: All of the above
14) Are those which are derived from the nature of the contract and ordinarily accompany the same.
Natural element

15) The following are the so-called vices of consent, except: Legal intimidation

CHAPTER 3

FORM OF CONTRACTS

Group 6

Art. 1356- 1379

TRUE OR FALSE

1) The rule is that a construction that would render a provision inoperative should be avoided; instead
apparently inconsistent provisions should be reconciled whenever possible as parts of a coordinated and
harmonious whole. T

2) The usage or custom of the place shall be borne in mind in the interpretation of the ambiguities of a
contract, and shall fill the omission of stipulations which are ordinarily established. T

3) The interpretation of abscure words or stipulations in a contract shall favor the party who caused the
obscurity. F

4) In order to judge the intention of the contracting parties, only their preceding acts shall be principally
considered. F

5) The denomination given by the parties in their contract is conclusive of the nature of the contents. F

6) The previsions of a contract should not be read in isolation from the rest of the instrument. T

7) It is a cardinal rule in contract interpretation that the ascertainment of the intention of the
contracting parties is to be discharged by looking to the words they used to project that intention in
their contract, that is, all the words, not just a particular word or two, and words in context, not words
standing alone. T

8) When it is absolutely impossible to settle doubts, and the doubts refer to incidental circumstances of
a gratuitous contract, the least transmission of rights and interests shall prevail. T

9) A contract provision is ambiguous if it is susceptible of two reasonable alternative interpretations. T

10) It is a cardinal rule in the interpretation of the contracts that the intention of the parties shall be
accorded secondary consideration. F

MULTIPLE CHOICES

1) Those contracts which are perfected by the mere agreement of the parties. Consensual

2) An instrument authenticated by a notary public or a competent public official with the formalities
required by law. Public document

3) Those contracts which require not only the consent of the parties for their perfection, but also the
delivery of the object by any one party to the other. Real

4) Is the act of making intelligible what was before not understood, ambiguous, or not obvious.
Interpretation

5) Is that remedy in equity by means of which a written instrument is made or construed so as to

express or conform to the real intention of the parties? Reformation

6) Is a remedy in equity whereby a written instrument is made or construed so as to express or conform

to the real intention of the parties where some error or mistake has been committed? Reformation

7) There shall be no reformation in the following cases, except: Memorandum of agreement

8) Is the determination of the meaning attached to the words written or spoken which make the
contract? Interpretation

9) The intent of the parties to an instrument is “embodied in the writing itself, and when the words are
clear and unambiguous the intent is to be discovered only from the express language of the agreement.”
Plain meaning rule

10) A principle which allows courts in some cases to search beneath the semantic surface for clues to
meaning. Four courners rule

11) An accessory contract must be read in its entirety and together with the principal agreement. No-
segregation principle

12) It is the “why” of a contract, the essential reason which moves the contracting parties to enter into
the contract. Cause

13) There shall be no reformation in the following cases: All of the above

14) As to how contracts are perfected, it may be classified into: All of the above
15) The examples of this contract are loan, pledge, deposit and commodatum. Real contract

CHAPTER 6-7

RESCISSIBLE & VOIDABLE CONTRACTS

Group 3

Art. 1380- 1402

TRUE OR FALSE

1) The rescission has the effect of abrogating the contract in all parts. T

2) Rescission of a contract will be permitted for a slight or casual breach, but only for such substantial
and fundamental breach. F

3) Subsidiary Remedy doesn't defined as the "exhaustion of all remedies by the prejudiced creditor to
collect claims due him before rescission is resorted to." F

4) Article 1383 is inapplicable in New Civil Code of the Philippines. T

5) Ratification requires the conformity of the contracting party who has no right to bring the action for
annulment. F

6) Ratification cleanses the contract from all its defects from the moment it was constituted. T

7) The action for annulment of contract shall be extinguished when the thing which is the object thereof
is lost through the fraud or fault of the person who has a right to institute the proceedings. T

8) As long as one of the contracting parties restore what in virtue of the decree of annulment he is
bound to return, the other cannot be compelled to comply with what is incumbent upon him. F

9) In Article 1394 Ratification may be effected by the guardian of the capacitated person. F

10) In article 1391 states that the action for annulment shall be brought within four years. T

MULTIPLE CHOICES

1) A person, usually a minor, who is under a guardian's charge or protection. Ward

2) It is a subsidiary action based on injury to the plaintiff's economic interest as described in Articles
1380 and 1381. Rescission

3) Contracts validly agreed upon may be rescinded in the cases established by law. Art. 1380

4) The act or means by virtue of which efficacy is given to a contract which suffers from a vice of curable
nullity. Ratification

5) Rescission shall be only to the extent necessary to cover the damages caused. Article 1384

6) Rescission referred to a number 1 and 2 of article 1381 shall not take place with respect to contracts
approved by the court. Article 1386

7) ARTICLE 1186. The condition shall be deemed fulfilled when the obligor ____ _____ its ______.
Voluntarily, Prevents, Fulfillment

8) A person who disappears from his domicile, his whereabouts being is unknown, and without leaving
an agent to administer his property. Absentee

9) Payments made in a state of insolvency for obligations to whose fulfillment the debtor could not be
compelled at the time they were effected, are also rescissible. Art. 1382

10) It pertain to rescission where creditors or even third persons not privy to the contract can file an
action due to lesion or damage as a result of the contract. Art. 1381 and Art. 1383

11) It means to declare a contract void at its inception and to put an end to it as though it never was. To
Rescind

12) Are existent, valid, and binding although they can be annulled because of want of capacity or
vitiated of one of the parties, but before annulment, they are effective and obligatory between parties.
Voidable or Annullable Contracts

13) The following are the meaning of Rescission, except; The action is principal

14) The following are the meaning of Annulment, except; The action is subsidiary

15) Article 1337 defines the concept of what? Undue Influence

 CHAPTER 8

UNFORCEABLE CONTRACTS (n)

Group 5

Art. 1403- 1422

TRUE OR FALSE

1) An authorized contracts those who entered into in the name of another person by one who has been
given no authority or legal representation or who has acted beyond his powers. F

2) Statute of contacts is descriptive of statutes which require certain classes of contracts to be in

writing. F

3) Statutes of Fraud only applies to executory to completed, executed or partially consummated

contracts. F

4) Statutes of Fraud only applies to executory, not to completed, executed or partially consummated
contracts. T

5) An unauthorized contracts those who entered into in the name of another person by one who has
been given no authority or legal representation or who has acted beyond his powers. T

6) Statute of Fraud is descriptive of statutes which require certain classes of contracts to be in writing. T

7) Stipulations authoruzing the imposition of iniquitous or unconscionable interest are contrary to

morals. T

8) Unenforceable contracts cannot be assailed by third persons. T

9) Unenforceable contracts can be assailed by third persons. F

10) The action for annulment must be brought within four years from the time the intimidation, violence
or undue influence ceases. T

11) By its very nature, annulment contemplates a contract which is voidable, that is, valid until annulled.
T

12) When both of the contracting parties is at fault, he cannot recover what he has given by reason of
the contract, or ask for the fulfillment of what has been promised him. F

13) Where one of the parties to an illegal contract is incapable of giving consent, the courts may, if the
interest of justice so demands allow recovery of money or property delivered by the incapacitated
person. T
14) In case of a divisible contract, if the illegal terms can be separated from the legal ones, the latter may
be enforced. T

15) An action for the declaration of nullity of contract is imprescriptible. T

Multiple choices

1) A valid contract that, because of some technical defect, cannot be fully enforced. Unenforceable
Contracts

2) Is descriptive of statutes which requires certain classes of contracts to be in writing. Statutes of Fraud

3) An action to rescind is founded upon and presupposes the existence of a contract. Rescissible
Contracts

4) There is a colorable contract but without any substance, because the parties have no intention to be
bound by it. Absolute Simulation

5) Defined as that principle of the law which holds that no subject or citizen can lawfully do that which
has a tendency to be injurious to the public against the public good. Public Policy

6) Is one which has no force and effect from the very beginning? Void and Inexistent Contracts

7) Parties to void agreement cannot expect the aid of the law; the courts leave them as they are. In pari
delicto

8) The parties state a false cause in the contract to conceal their real agreement. Relative Simulation

9) In equal fault means. In pari delicto

10) May be defined as one which lacks, absolutely either in fact or in law, one some of the elements
which are essential for its validity. Unenforceable Contracts