15.

The defective contracts arranged according to the degree of their defectiveness

from the least defective to the most defective are:
A) voidable, rescissible, unenforceable, and void contracts.
B) rescissible, unenforceable, voidable, and void contracts.
C) rescissible, voidable, unenforceable and void contracts.
D) unenforceable, rescissible, voidable, and void contracts.
ANSWER: C
A resolutory condition dependent solely on the will of the debtor is:
A) valid
B) voidable
C) unenforceable
D) void
ANSWER: A
A suspensive condition dependent solely on the will of the debtor is:
A) valid
B) rescissible
C) voidable
D) void
ANSWER: D
All of the following are characteristics of a condition, except:
A) It may or may not happen.
B) It may refer to the future.
C) It merely fixes the time for the demandability of an obligation.
D) It may refer to a past event unknown to the parties.
ANSWER: C
Alma entered into a contract with Ben whereby Ben not to testify in a criminal case
filed against Alma in exchange for P100,000.00 to be given by AlmA. The contract
between Alma and Ben is:
A) void for being contrary to law.
B) void for being contrary to good customs.
C) void for being contrary to public policy.
D) is valid because one can choose not to testify against another in a crime.
ANSWER: C
An obligation ceases to be alternative and becomes a simple obligation in the
following cases, except when:
A) the debtor has communicated his choice 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) among the several prestations that are due, only one is practicable.
D) three prestations are due but one of them is unlawful or impossible.
ANSWER: D
Dacion en pago and payment by cession are similar forms of payment. They are
similar in which of the following respects?
A) On the number of creditors involveD.
B) On the extent of the properties involved in the payment.
C) On the purpose of the payment.
D) On whether the debtor is released completely from his obligations.
ANSWER: C
If the illegal contract between the parties is a criminal offense but only one
party is guilty, such illegal contract shall produce the following effects, except:
A) the guilty party will be criminally prosecuteD.
B) neither party may compel the other to comply with his undertaking.
C) the instruments shall be confiscated in favor of the government.
D) the innocent party cannot recover what he has given.
ANSWER: D
If the illegal contracts between the parties is a criminal offense and both parties
are guilty (in pari delicto. , such illegal contract shall produce the following
effects, except:
A) The parties shall have no right of action against each other.
B) both parties shall be criminally prosecuteD.
C) the effects and instruments of the crime will be confiscated in favor of the
government.
D) the parties may recover what they have given if it is not illegal in itself.
ANSWER: B
In January 2014, Samson, 17 years old, sold his only car to Ben, 21 years olD. The
sale was without the knowledge of Glenda, the guardian of Samson. Assuming that an
annulment case is filed today:
A) Samson may bring an action for annulment.
B) Glenda may bring the action for annulment.
C) Ben may bring the action for annulment
D) Annulment will not prosper, whoever may file it.
ANSWER: B
IT IS THE EXTINGUISHMENT TO THE CONCURRENT AMOUNT OF THE DEBTS OF TWO PERSONS WHO,
IN THEIR OWN RIGHT, ARE DEBTORS AND CREDITORS OF EACH OTHER.
A) compensation
B) novation
C) confusion
D) condonation
ANSWER: A
It is the meeting in one (1. person of the qualities of creditor and debtor with
respect to the same obligation.
A) compensation
B) confusion
C) condonation
D) novation
ANSWER: B
It is the voluntary management of the property or affairs of another without the
knowledge or consent of the latter.
A) Solutio indebiti
B) Negotiorum gestio
C) compensatio morae
D) none of the above
ANSWER: B
It takes place when the creditor accepts a third person to take the place of the
debtor at the instance of the latter.
A) subrogation
B) novation
C) expromision
D) delegacion
ANSWER: D
It transfers to the person taking the place of the creditor all the rights
pertaining to the credit, either against the debtor or against third persons, be
they guarantors or possessors of mortgages.
A) substitution
B) subrogation
C) transfiguration
D) transformation
ANSWER: B
Juan borrowed P20,000 from Pedro. On due date, Juan was not able to pay but he
promised to give Pedro a specific ring, a specific bracelet, or a specific
necklace, in payment of the debt. Pedro accepted the offer of Juan. What kind of
obligation is the new obligation of Juan?
A) Facultative obligation
B) Compound obligation
C) Alternative obligation
D) Simple obligation
ANSWER: C
Juan borrowed P5,000 from Pedro. The obligation is payable in full after 15 days.
In which of the following cases is Juan justified in making a consignation of his
payment in court?
A) If Pedro refuses to accept the payment in the form of a check which is certified
by the bank to be supported by sufficient funds.
B) If Pedro refuses to accept the payment consisting of P5,000 pieces of P1.00
coins.
C) If Pedro refuses to accept the first installment payment in the form of a P1,000
bill, Juan promising to pay the balance of the debt in four (4. equal monthly
installments.
D) if Pedro refuses to accept the payment consisting of 250 pieces of P20 bills.
ANSWER: D
Juan owed Pedro P20,000. The obligation is evidenced by a promissory note.
Subsequently, Pedro assigned the note to Cardo, who in turn assigned the note back
to Juan. The obligation of Juan is extinguished by
A) compensation
B) confusion
C) condonation
D) The obligation is not yet extinguished because there was no payment.
ANSWER: B
Juan owes Pedro P10,000 due on September 10. Pedro owes Juan P4,000 due on Aug. 15.
On July 30, Pedro assigned his right to Cardo. Juan consented to such assignment
without any reservation of his right to the compensation. On September 10, Cardo
may collect from Juan:
A) P10,000
B) P6,000
C) P4,000
D) Nothing
ANSWER: A
Juan owes Pedro P10,000. Cardo, a third person and without any intention to be
reimbursed by Juan, paid the debt without the consent of Juan. Pedro accepted the
payment.
A) The payment did not extinguish the debt of Juan to Pedro because it was made
without the consent of Juan.
B) The payment did not extinguish the debt because it was not made by Juan himself.
C) The payment is considered valid because it was accepted by the debtor.
D) The payment may be considered valid if Cardo had the intention to be reimburseD.
ANSWER: C
Juan owes Pedro P10,000. There was no date agreed upon for the payment was
stipulated by the parties. 
A) Pedro cannot require Juan to pay because there is no date for payment.
B) Pedro can require Juan to pay at anytime.
C) Juan is not liable to Pedro because the obligation is void there being no date
of payment.
D) Juan is not required to pay unless Pedro goes to court and asks the court to fix
a period for the payment.
ANSWER: B
Juan owes Pedro P20,000 with Cardo as guarantor. Cardo, on the other hand, owes
Juan P15,000. Both debts are already due but Juan is insolvent. In this case - 
A) Pedro may collect from Juan P20,000.
B) Pedro may collect from Cardo P5,000 because a guarantor can set up compensation
as regards what the creditor owes the principal debtor.
C) Pedro may collect nothing from Cardo because Juan is insolvent.
D) Pedro may collect P15,000 from Cardo.
ANSWER: B
Juan promised to give Pedro 20 sacks of rice when Cardo, Pedro's father, dies. The
obligation of Juan to Pedro is
A) An obligation with a suspensive condition.
B) An obligation with a resolutory condition.
C) An obligation with a perioD.
D) A pure obligation.
ANSWER: C
Juan stole the horse of Pedro. Juan was arrested, tried in court and convicteD.
Aside from being sentenced to a prison term, Juan was also ordered by the court to
return the horse. However, the carabao died before Juan could deliver it to Pedro.
A) Juan is not liable to Pedro if the cause of the death of the horse is a
fortuitous event.
B) Juan is liable to Pedro only if the horse died because of Juan's fault.
C) Juan is liable to Pedro whatever may be the cause of the death of the horse.
D) Juan has no liability to Pedro whatever may be the cause of the death of the
horse because his obligation to return it was due to an order of the court and not
on his own volition.
ANSWER: C
Juan, 16 years old, Pedro, 20 years old, and Cardo, 35 years old, jointly borrowed
P9,000 from Mario. How much may Mario collect from Pedro.
A) P9,000
B) P6,000
C) P3,000
D) Nothing, because Juan was a minor at the time the obligation was constituteD.
ANSWER: C
Juan, 16 years old, Pedro, 20 years old, and Cardo, 35 years old, solidarily
borrowed P9,000 from Mario. How much may Mario collect from Pedro?
A) P9,000
B) P6,000
C) P3,000
D) Nothing, because Juan was a minor at the time the obligation was constituteD.
ANSWER: B
On June 20, 2019, Juan obliged himself to give Pedro P100,000 if Pedro will pass
the CPA Board Exam on or before October 30, 2020. The condition of the obligation
is a:
A) positive condition
B) negative condition
C) joint condition
D) impossible condition
ANSWER: A
One of the following may not annul a voidable contract:
A) The party whose consent is vitiated by violence, intimidation, mistake, fraud or
undue influence.
B) The incapacitated person when he attains capacity.
C) The guardian during the ward’s incapacity.
D) The party who is capable of entering into a contract.
ANSWER: D
Samson, 17 years old, sold his computer to Ben, 25 years old, for P48,000. The
price is payable in 24monthly installments. After reaching 18, Samson continued to
collect the remaining 12 installments until the price was paid in full.
A) Samson may still annul his contract with Ben.
B) Samson may no longer annul his contract with Ben.
C) Only Ben may annul the contract with Samson on the ground of incapacity of
Samson.
D) Samson and Ben may annul the contract at the same time based on the incapacity
of Samson.
ANSWER: D
Statement 1: A custom must be proved as a fact according to the rules of evidence.
Statement 2: Customs speak of the totality of the norms of good and right conduct
growing out of the collective sense of right and wrong of every community.
A) Only statement 1 is correct.
B) Only statement 2 is correct.
C) Both statements are correct.
D) Both statements are incorrect.
ANSWER: A
Statement 1: A right is the act or performance which the law will enforce.Statement
2: A wrong is an act or omission of one party in violation of the legal right or
rights of another.
A) Only statement 1 is correct.
B) Only statement 2 is correct.
C) Both statements are correct.
D) Both statements are incorrect.
ANSWER: B
Statement 1: An obligation from quasi-contracts arise from damage cause to another
through an act or omission, there being fault or negligence, but no contractual
relation exists between the parties. Statement 2: An obligation from quasi-delicts
arise from lawful, voluntary and unilateral acts which are enforceable to the end
that no one shall be unjustly enriched or benefited at the expense of of another.
A) Only statement1 is correct.
B) Only statement 2 is correct.
C) Both statements are correct.
D) Both statements are incorrect.
ANSWER: D
Statement 1: Payment made for an obligation which is interest-bearing must first be
applied to the interest before the principal. Statement 2: Payment simply means the
delivery of money.
A) Only statement 1 is correct.
B) Only statement 2 is correct.
C) Both statements are correct.
D) Both statements are incorrect.
ANSWER: A
Statement 1: The debtor shall lose the right to make use of the period if the
security that he has given is lost due to a fortuitous event. Statement 2: Whenever
a period is designated in an obligation, it shall be presumed to have been
established for the benefit of the debtor and the creditor.
A) Only statement 1 is correct.
B)  Only statement 2 is correct.
C) Both statements are correct.
D) Both statements are incorrect.
ANSWER: C
Statement 1: Waiver of the liability for future fraud is allowable in certain
cases. Statement 2: Liability for fraud cannot be mitigated or reduced by the
courts.
A) Only statement 1 is correct.
B) Only statement 2 is correct.
C) Both statements are correct.
D) Both statements are incorrect.
ANSWER: B
The debtor shall lose the right to make use of the period in the following cases,
except when he: 
A) becomes insolvent.
B) violates any undertaking in consideration of which the creditor agreed to the
perioD.
C) attempts to absconD.
D) does not furnish guaranty or security to the creditor.
ANSWER: D
The delivery of a promissory note payable to order or other bills of exchange or
other mercantile documents shall produce the effect of payment when they are:
A) delivered
B) cashed
C) have been impaired through the fault of the debtor
D) deposited in the bank
ANSWER: B
The following are names which refer to a joint liability, except:
A) mancomunada
B) pro rata
C) "We promise to pay" signed by two or more persons
D) "I promise to pay" signed by two or more persons
ANSWER: D
The following are the grounds for liability for damages, except:
A) causal fraud
B) legal delay
C) negligence
D) compliance in contravention of the tenor of the obligation
ANSWER: A
The following contracts are unenforceable, except:
A) those entered into by one who has no authority or legal representation.
B) those that do not comply with the Statute of Frauds.
C) those where both parties are incapable of giving consent to a contract.
D) those where the consent of a party is vitiated by violence, intimidation,
mistake, fraud or undue influence.
ANSWER: A
The following contracts are void or inexistent, except:
A) those whose object is outside the commerce of men.
B) those which contemplate an impossible service.
C) those where the intention of the parties relative to the principal object of the
contract cannot be ascertaineD.
D) those where one of the parties is guilty of fraud in performing his obligation.
ANSWER: D
The following obligations are divisible, except an obligation
A) to give definite things
B) which has for its object the execution of a certain number of days of work.
C) which has for its object the accomplishment of work by metrical units
D) which by its nature is susceptible of partial performance.
ANSWER: A
The law on obligations and contracts is found in:
A) Book 1 of the Civil Code
B) Book II of the Civil Code
C) Book III of the Civil Code
D) Book IV of the Civil Code
ANSWER: D
The Statue of Frauds applies only to:
A) wholly executed contracts.
B) contracts wholly or partially executed on the part of the creditor.
C) contracts wholly or partially executed on the part of the debtor.
D) wholly executory contracts.
ANSWER: D
Which among the following contracts is void?
A) A contract of barter between Samson, insane, and Ben, 17 years olD.
B) A contract of sale where Ben, the buyer, twisted the arm of Samson, the seller,
so that Samson would sign the deed of sale.
C) A contract of sale where Ben, the buyer, aimed a gun at the wife of Smamson, so
that Samson would sign the deed of sale.
D) A contract for the sale of a cat which is suffering from a contagious disease.
ANSWER: A
Which of the following contracts involving real property is valid and enforceable
although not in writing?
A) Sale of a piece of land for P50,000.
B) Lease of an agricultural lot for a period of 2 years at a monthly rental of
P3,000.00.
C) Mortgage of a commercial lot to secure a loan of P50,000.
D) Donation and acceptance of a residential lot.
ANSWER: B
Which of the following contracts is valid and enforceable?
A) An oral promise to answer for the default of another.
B) A donation and its acceptance in a private instrument of a parcel of lanD.
C) An oral lease of a mining equipment for more than two years.
D) An oral contract of sale of a necklace worth P400.00 between an insane and a
minor.
ANSWER: A
Which of the following is a characteristic of expromision but not of delegacion?
A) It is made with or without the consent of the debtor.
B) The third person who makes the payment to the creditor is always entitled to
subrogation.
C) In case of insolvency of the new debtor, the creditor may still recover from the
original debtor under certain circumstances.
D) It is initiated by the debtor himself.
ANSWER: A
Which of the following must be in writing to be enforceable as required by the
Statute of Frauds?
A) A subscription for 120 shares of stock of a corporation at P10,000 per share.
B) A contract for the construction of an office to start 5 months after the
execution of the contract.
C) A contract for the lease of a commercial lot for a period of 10 months.
D) A contract whereby one agrees to pay another’s debt if the latter defaults in
his payment.
ANSWER: D
Which of the following statements concerning ratification of a voidable contract is
false?
A) Ratification extinguishes the action to annul a voidable contract.
B) Ratification cleanses the contract from all its defects from the moment it was
constituteD.
C) Ratification requires the conformity of the party who has no right to bring the
action for annulment.
D) Ratification may be made by the guardian of the incapacitated person, or the
incapacitated person upon attaining capacity, or the party whose consent was
vitiateD.
ANSWER: C