PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION -MANILA

FIRST PRE-BOARD EXAMINATION

REGULATORY FRAMEWORK IN BUSINESS TRANSACTION (RFBT)

1. In sales at auction, sale is perfected when?

a. The bidder announces his bid price
b. The auctioneer announces by the fall of the hammer
c. There is signing of contract between the seller and buyer
d. None of the above

2. If the price of the thing which is the object of contract of sale is fictitious, which
of the following is true?
a. If there is no intention with respect to the price, the sale is valid
b. If there is no intention with respect to the price, the sale is void
c. If there is absolute simulation of the price, the sale is valid
d. If there is relative simulation of the price the sale is void

3. This is a constructive delivery whereby before contract of sale, the would be vendee
was already in possession of the would be subject matter of sale?
a. Traditio Longa Manu
b. Traditio Brevi Manu
c. Symbolic Delivery
d. Constitutum Possessorium

4. The following are the obligation of the vendor, except?

a. To delivery the thing which is the object of sale
b. To warrant the thing sold even though it may not have been mentioned
c. To take care of the thing with the diligence of the good father of the family
d. To deliver the fruits of the thing sold accruing from the consummation
of the sale

5. In case of double sale under Article 1544 of the NCC of the movable property, who
owns the said property?
a. First registrant in good faith
b. First possessor in good faith
c. Person who presents oldest title in good faith
d. First registrant in bad faith

6. Who bears the loss of the thing at the perfection of the contract of sale?
a. The buyer because there is already transfer of ownership
b. The buyer under the concept of res peruit domino
c. The seller under the concept of resperuit domino
d. The seller because there is already transfer of ownership

7. What are the remedy of the unpaid seller in case of sale of movable property in
installment under Recto law or Article 1484 of NCC?
 a. Specific performance should the buyer fail to pay
b. Cancellation of sale for failure to pay at least one (1) installment
c. Foreclosure of Real mortgage if the buyer failed to pay at least two (2)
installments
d. Foreclosure of Chattel mortgage if the buyer failed to pay at least one(1)
installment

8. Maceda Law does not cover the following sale on installment of real property except?
a. Industrial lot
b. Commercial lot
c. Land under Comprehensive Agrarian Reform Program
d. Residential lot

9. Under Maceda Law, if the buyer only paid installments for less than two (2) years,
what are the rights granted to him?
a. The buyer shall be given a 30 days grace period to settle the unpaid
installment
b. The buyer shall be reimbursed with a cash surrender value of 50% of the
total payments made plus 5% per year not exceeding 90% of total payment
c. The buyer shall be given a grace period of 60 days to settle and no
reimbursement of cash surrender value
d. The buyer is given a grace period of 30 days to settle from failure to pay
and another 30 days from notice of cancellation

10. What is the remedy provided in PD 957 if the buyer has already paid monthly
amortization for 6 consecutive years but the said buyer defaulted on the remaining
amortization due to the fact that the developer changed the proposed plan and failed
to meet the turnover date?
a. Ask for the refund of a cash surrender value equivalent to 50% of the Total
Payments Made but not to exceed 90%
b. Ask for the refund of a cash surrender value equivalent to 50% of the Total
Payments Made plus 5% for every year after 5th year but not to exceed 90%
c. Ask for the refund of the Total Payments Made
d. Ask for a grace period of 6 months to pay the balance without interest or
pay with interest if paid within 30 days from the notice of cancellation.

11. The following are implied warranties of the seller, except?

a. warranty that seller has a right to sell
b. warranty against eviction
c. warranty against hidden defect
d. warranty against patent defect

12. Statement 1: Sale of animals at fair or public auction has warranty against hidden
defects
Statement 2: Sale of animals with contagious disease is void
 a. True; True c. False; True
b. True; False d. False; False

13. In a sale of unit of animal, which of the following is true?

a. The sale is void if service for which they are acquired has been stated
in the contract and they are found to be unfit thereof
b. The prescription of action to rescind is 30 days from date of delivery to buyer
c. The buyer may elect between withdrawing from sale or demanding
proportionate reduction of price without damages in either case
d. All of the above

14. In a Contract of pledge, if the debtor-pledgor failed to pay the debt when it falls due,
the creditor-pledgee may?
a. Appropriate the thing pledged
b. Sell the thing pledged at public auction and the may still collect the debtor
for any deficiency of the principal obligation after such sale
c. Sell the thing pledged at public auction and the may not collect the
debtor for any deficiency of the principal obligation after such sale
d. Sell the thing pledged at public auction and the may not keep the excess of
sale over the principal obligation

15. The following are requisite to constitute Real Mortgage Except?

a. To secure the fulfillment of a principal obligation and
the mortgagor should be the absolute owner of thing mortgaged
b. The mortgagor should have free disposal of the thing
c. When the principal obligation becomes due, the thing mortgaged
may not be alienated to secure payment
d. For a mortgage to be validly constituted and to prejudice
third persons, the mortgage should be recorded with the Registry of
Property

16. Which of the following is correct?

a. In chattel mortgage, the delivery of the personal property to the mortgagee

is necessary, while in pledge, such delivery is not necessary;

b. In chattel mortgage, the registration of the same in the Chattel Mortgage

Register is not necessary for its validity, while in pledge, registration in the
Registry of Property is necessary.

c. In chattel mortgage, the creditor is entitled to recover any deficiency even

if the chattel mortgage is a security for the purchase of personal property
in installments
 d. In chattel mortgage, the creditor is entitled to recover any deficiency
except if the chattel mortgage is a security for the purchase of
personal property in installments

17. The following are the rights of the Pledgor, except?

a. To continue to be the owner of the thing pledged, until its sale, unless it is
expropriated
b. To demand the deposit of the thing pledged should the creditor use it without
authority, or
misuse it in any other way
c. To substitute the thing pledged if it is endangered without fault of the
pledgee with prejudice to the pledgee’s right to have the thing sold at public
sale
d. To bid and have preference at the foreclosure sale if he should offer the same
terms as the bidder

18. Jenna knowing that she has sufficient balance in her checking account issued a check
amounting to 50,000 dated on January 15, 2021 to Ruben for the payment of the 20
bags of Japanese rice delivered on January 20, 2021. Ruben encashed the said check
on April 10, 2021, however, the bank dishonored the check for insufficiency of funds.
Jenna refused to pay within 5 banking days from notice thereof contending that it
Ruben who failed to encash the same within the reasonable period. Can Ruben file
an action against Jenna for violating the bouncing check law?
A. No, because Jenna has sufficient fund when she issued, BP 22 punishes
the issuance of a check knowing that there is insufficiency of fund.
B. No, because the check was only encashed after the reasonable time
hence, Ruben bears such risk.
C. Yes, because Jenna, though she kept the sufficient funds within a
reasonable period, she did not settle the obligation within 5 banking days
D. Yes because Jenna is presumed to have knowledge of issuing a check
with No sufficient Fund and that despite notice, she failed to settle
within five banking days.

19. Jenna issued a check amounting to P50,000 on January 15, 2021 knowing that she
has a balance of P25,000 on her checking account. The said check was post dated
on January 30, 2021, thus, she has 15 days fund the account. The said check was
issued to Ruben for the payment of 20 bags of Japanese rice. On April 10, 2021,
Ruben encashed the check but it was dishonored by the bank for insufficiency of
funds. Can Ruben file an action against Jenna for violating BP 22?
 A. Yes because Jenna failed to keep sufficient balance for a period of 90 days
from the date appearing on the check
B. No, because Ruben failed to encsash within a reasonable period
C. Yes, because Jenna issued with knowledge that she has no sufficient
fund at the time of issuing the check
D. No because the check was post dated and that Jenna has 5 banking days
to fund the check from notice of dishonor.

20. Jenna issued a check amounting to P50,000 on January 15, 2021 knowing that she
has a balance of P25,000 on her checking account. The said check was post dated
on January 30, 2021, thus, she has 15 days fund the account. The said check was
issued to Ruben for the payment of 20 bags of Japanese rice but failed to deliver such.
Jenna called the bank and ordered a stop payment on the said check. On April 10,
2021, Ruben encashed the check but it was dishonored by the bank due to Stop Order
Payment and stamped No Sufficient Fund. Can Ruben file an action against Jenna for
violating BP 22?
A. Yes because Jenna failed to keep sufficient balance for a period of 90 days
from the date appearing on the check
B. No, because Ruben failed to encsash within a reasonable period
C. Yes, because Jenna issued with knowledge that she has no sufficient fund
at the time of issuing the check regardless of the non-delivery of goods by
Ruben
D. No because the Jenna has a valid defense for non-funding the said
check

21. The following are elements that constitute the first punishable act under
violation of BP 22, except?
a. That a person makes or draws and issues any check to apply on account or for
value
b. That the person knows that at the time of issue, he does not have sufficient
funds in or credit with the drawee bank for the payment of such check upon its
presentment
c. That the person failed to keep the balance of the fund for a period of
90days from the date appearing on the check and pay within 5 banking days
from the notice of dishonor
d. That the check is subsequently dishonored by the drawee bank for insufficiency
of funds or creditor or would have been dishonored for the same reason had not
the drawer, without any valid reason, ordered the bank to stop payment.

22. Which of the following is correct?

a. Estafa is a crime against public interest
b. Estafa shall bar the prosecution for violation of BP 22
 c. Estafa can be commited through deceit in issuing a bouncing check
d. B.P. 22 is a special law that makes the mere act of issuing worthless or bum
checks a crime, mala inse, regardless if they were made as deposit,
guarantee, or evidence of pre-existing debt.

23. Jenna issued a check amounting to P50,000 on January 15, 2021 knowing that she
has a balance of P25,000 on her checking account. The said check was post dated
on January 30, 2021, thus, she has 15 days fund the account. The said check was
issued to Ruben for the payment of 20 bags of Japanese rice. On April 10, 2021,
Ruben encashed the check but it was dishonored by the bank for insufficiency of
funds. What is the penalty of Jenna under BP 22?
A. Imprisonment of not less than 30 days but not more than 1 year and/or a
fine of P 50,000 for the said amount, at the discretion of the court
B. Imprisonment of not less than 30 days but not more than 1 year and/or
a fine of P 100,000 for the said amount, at the discretion of the court
C. Imprisonment of not more than 1 year and/or a fine of P 100,000 for the said
amount, at the discretion of the court
D. Imprisonment of not less than 30 days but not more than 1 year and/or a
fine of P 200,000 for the said amount, at the discretion of the court

24. The following are factors in rehabilitation or liquidation, except?

a. Recognize Creditors Right
b. Respect priority claims
c. Ensure or maintain certainty and predictability in commercial affairs
d. Ensure equitable treatment of creditors who are not similarly situated

25. Insolvent shall refer to the financial condition of a debtor that is?
a. Generally unable to pay its or his liabilities as they fall due in the ordinary course of
business
b. Has liabilities that are greater than its or his assets
c. Has liabilities that are greater than its or his assets
d. Both A and B

26. The following are excluded in the coverage of FRIA, except?

a. Bank
b. Insurance
c. Local Government Unit
d. Publicly listed companies

27. This shall refer to the restoration of the debtors to a condition of successful
operation and solvency, if it is shown that its continuance of operation is
economically feasible ?
a. Liquidation
b. Rehabilitation
c. Insolvency
d. Restoration

28. . It is a rule indicating that the Rehabilitation plan confirmed by the Court shall be
binding upon the debtor and all persons who may be affected by it, including
creditors whether or not such persons have participated in the proceedings, opposed
the plan or whether or not their claims have been scheduled?
a. Clam down rule
b. Cram down rule
c. Doctrine of last clear chance
d. Doctrine of operative act

29. The stay order or suspension order shall result to the following, except?
a. Suspend all actions or proceedings in court for the enforcement of claims against
the debtor
b. Suspend all action to enforce any judgment, attachment or any provisional
remedies against the debtor
c. Prohibit the debtor from selling, encumbering, transferring or disposing in any
manner any of its properties, except in the ordinary course of business
d. Allows the debtor from making any payment of liabilities outstanding as of
commencement date except as may be provided herein

30. What will be the action of the court if the debtor is found not to be insolvent and
that there is merely sham filing on the part of the debtor?
a. Give due course
b. Convert the rehabilitation to liquidation
c. Dismiss
d. Involuntarily liquidate

31. The out of court rehabilitation must be approved by the following, except?
a. creditors with 67% of the secured obligations
b. 85 % of the Total Liabilities that are secured but not unsecured
c. 75% of the Unsecured obligation
d. 85% of the Total Liabilities whether secured or unsecured

32. The voluntary liquidation of an individual debtor as opposed to involuntary

liquidation is?
a. both requires a debt of at least 500,000
b. both shall be filed by the insolvent debtor
c. the liquidation order shall be both issued after trial
d. bond is necessary in voluntary but not in involuntary

33. . The following are allowed proceedings for individual debtors except?
a. Voluntary liquidation
b. Involuntary liquidation
c. Rehabilitation
d. Suspension of payment

34. who will file the petition for involuntary rehabilitation?

a. the debtor who is insolvent
b. the creditor with aggregate claim of P 1,000,000
c. the creditor with aggregate claim of P 1,000,000 or 25% of the Subscribed capital
stocks whichever is higher
d. the creditor with aggregate claim of P 1,000,000 or 25% of the Outstanding capital
stocks whichever is higher

35. . The pre negotiated rehabilitation plan shall be approved by?

a. 85% of the total creditors with security
b. Majority of the total liabilities 50% of which is secured and 50% is unsecured
c. 2/3 of the total liabilities more than 50% is secured and more than 50% is
unsecured
d. Majority of the total liabilities more than 50% is secured and more than 50% is
unsecured

36. . The suspension of payment as opposed to liquidation?

a. applicable to both juridical person and insolvent debtor
b. no minimum amount of debt is required
c. 500,000 is the minimum amount of debt
d. the asset of the debtor is less than the liabilities

37. . the suspension of payment as opposed to rehabilitation?

a. applicable to both juridical person and insolvent debtor
b. the asset of the debtor is greater than the liabilities
c. 500,000 is the minimum amount of debt
d. the asset of the debtor is less than the liabilities

38. . the involuntary liquidation of an individual debtor as opposed to business?

a. the creditor must be atleast 3 or more
b. the minimum amount of debt is 1,000,000
c. the minimum amount of debt is 500,000
d. the debtor must be solvent

39. This means manufacturing or importing a product between the date of

promulgation of its consumer product safety rule and its effective date, at a rate
which is significantly greater than the rate at which such product was produced
or imported during a base period?
a. Hoarding
b. Stockpiling
c. Safekeeping
d. Safety Stock
40. Which of the following is not considered as consumer right?
a. Right to safety
b. Right to information
c. Right to choose
d. Right to quality product

41. The following are sources of obligation, except?

a. Law
b. Delict
c. Culpa Aquilana
d. Mora Solvendi

42. What is the effect when the debtor voluntarily pays the creditor of his obligation
after prescription?
a. The payment is not valid because of prescription, hence the debtor may recover
b. The payment is valid even after prescription and the creditor may retain
payment
c. The payment is not valid because of prescription but the debtor may not recover
d. The payment is valid even after prescription but the creditor may not retain
payment

43. Jonel is driving the jeepney of Justine at a speed of 150Km per hour in Espana
Boulevard without headlight at exactly 8:00 in the evening when he crashed into a
barrier and accidentally bumped and killed a pedestrian named Tin-tin. Joju, a
passenger was also injured due to the said accident. Which of the following is true?
a. Jonel is liable to Joju under delict while he is liable to Tin-tin under quasi-delict
b. Justine and Jonel are liable for breach of contract of carriage
c. Justine is liable to Joju under contract while he is subsidiarily liable to
Tin-tin under delict if Jonel is insovlent
d. All of the above

44. This provides that where both parties are negligent but the negligent act of one is
appreciable later in point of time than that of the other, the one who had the
opportunity to avoid the impending harm but failed to do so, is chargeable with the
consequence?
A. Doctrine of a good father of the family
B. Proximate cause doctrine
C. Extraordinary Diligence of a very cautious person doctrine
D. Doctrine of last clear chance
45. Berlin, Tokyo and Nairobi are solidary debtors of Sergio and Marquina for
P200,000. How much can Sergio collect from Tokyo?
A. P 100,000
B. P 50,000
C. P 32,667
D. P 20,000

46. The following are requisites of negotiorum gestio, except:

A. Officious manager voluntarily assumes the management or agency of business
B. Property must be neglected or abandoned
C. Assumption of management must not be done in good faith
D. There is no authorization from the owner either express or implied

47. The Liability of two or more officious manager is?

A. Joint Obligation unless agreed to be solidary
B. Solidary unless the management was assumed to save the business from
imminent danger.
C. Solidary if the management was assumed to save the thing or business from
imminent danger.
D. Joint unless the management was assumed to save the thing or business from
imminent danger.

48. The following are causes of damages under Art. 1170 of the New Civil Code?
a. Fraud, Negligence, Diligence and Contravention of the Tenor of the
Obligation
b. Dolo, Culpa, Mora, Contravention of the tenor of the obligation
c. Dolo, Culpa, Mia, Contra
d. Fraud, Negligence, Dolo, Contravention of the tenor of the obligation

49. As a rule, no person shall be liable in case of fortuitous event, except?

a. When the debtor promises to deliver the same thing to two or more persons
who do not have the different interest.
b. When the thing to be delivered is an indeterminate object
c. When the nature of the obligation does not require assumption of risk
d. All of the above

50. Ms. Shellby agreed to deliver 500 pieces of law books to the office of Mr. James
after the latter misrepresented as the Dean of USTe Law school and issued a
bouncing check. What is the remedy of Ms. Shellby?
a. Claim for damages only because the contract is void
b. Claim for damages because the contract is voidable
 c. Annulment of contract because the contract is voidable
d. Annulment of contract because it is voidable plus ask for damages

51. Jett agreed to deliver 10 cases of liquor specifically 750 ml Jose Cuervo to Brian
on June 14, 2019. However, on June 17, 2019 the warehouse of Jett including the
said 10 cases of liquor was burned due to fortuitous event. What is the liability of
Jett?
a. Jett is not liable to deliver because the objects are generic things and the
loss is due to fortuitous event
b. Jett is liable to deliver because the objects are indeterminate things
c. Jett is not liable because he is not in delay in delivering a generic object
d. Jett is liable but the obligation to deliver is extinguished

52. This damage includes physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and
similar injury?
a. Actual Damage
b. Exemplary Damage
c. Moral Damage
d. Nominal Damage

53. Statement 1: The happening of a resolutory condition will give rise to an obligation
while the happening of a suspensive condition will extinguish an obligation.
Statement 2: A potestative suspensive condition is valid when the fulfillment
depends upon the will of the either creditor or debtor.
A. True;True
B. True; False
C. False; True
D. False;False

54. Mr. Promiser promises his son to give a brand new Mustang if the latter will
pass the CPA board examination. What kind of obligation is present in the
case?
A. Suspensive Conditional obligation
B. Potestative Obligation
C. Obligation with a period
D. Resolutory Conditional obligation

55. John and Marsha are liable to Juan and Karlos for P 500,000. How much can
Karlos collect from Marsha?
 A. P 500,000
B. P 250,000
C. P 125,000
D. P 100,000

56. Statement 1: The nullity of the penal clause carries with it that of the principal
obligation.
Statement 2: The nullity of the principal obligation carries with it that of the
penal clause.

A. True;True
B. True; False
C. False; True
D. False;False

57. It refers to lawful, unilateral, voluntary acts giving rise to juridical relation to the end
that no one shall be unjustly enriched at the expense of another?
a. Law
b. Contract
c. Quasi-delict
d. Quasi-contract

58. Cheska, the payee of a check for P10,000 cashes it with PNV drawee bank.
However, Marciano the bank teller mistakenly gave him P 12,000. What is the
obligation of Cheska?
a. There is no obligation to return because it was given mistakenly by the bank
teller
b. There is no obligation to return because the Cheeky will not be unjustly
enriched at the expense of a bank
c. There is solution indebiti, hence, there is an obligation to return the
excess amount only
d. There is obligation to return the full amount because of solution indebiti

59. The following are requisites of Dacion en pago, except:

A. There must be performance of the prestation in lieu of payment which may
consist in delivery of thing, real right or a credit against third person
B. There must be difference between the prestation due and that which is
given in substitution
C. There must be an agreement between the creditor and debtor that
obligation is immediately extinguished by reason of performance of
prestation different from that due.
 D. There must be an agreement between the creditor and debtor that
obligation is immediately extinguished by reason of performance of
prestation the same from that due.

60. Anna is indebted to Mia for a total of P 100,000. On the due date, Anna asked for
a receipt from Mia but the latter refused to give without any reason. What is / are
the remedy of Anna if any?
A. Rescind the contract of loan
B. Tender of payment only
C. Tender of payment is a must plus consignation
D. Consignation alone is sufficient

61. The following are requisites of condonation, except:

A. It must be gratuitous and the obligation must be demandable at the time of
remission
B. It must be accepted by the obligor
C. It must amount to an inofficious donation
D. If it is made expressly, it must comply with the forms of donation

62. Statement 1: Subrogation of a third person in the rights of the creditor is

either legal or conventional.
Statement 2: Conventional subrogation of a third person requires the
consent of the third person but not the original debtor.
A. True; True
B. True; False
C. False; True
D. False; False

63. The following are the requisites of novation, except:

a. There must be previous valid obligation
b. The parties concerned must agree to a new contract
c. The old contract must not be extinguished
d. There must be a valid new contract

64. This novation is when the initiative or the change does not come from debtor and
even be made without his knowledge or against his will?
A. Delegacion
B. Subrogation
C. Expromision
D. Accion PAuliana
65. Which is true regarding void contracts?
a. Void contracts always produce no effect whatsoever either against or in favor
of anyone.
b. Void contracts can be ratified.
c. In void contracts where the nullity proceeds from the illegality of the
cause or the purpose of the contracts, and the two are equally at fault, the
law leaves them as they are and denies recovery by either one of them.
d. Void contracts are subject to prescription

66. Which of the following is true regarding voidable contract?

a. The action for annulment of voidable contract shall be brought within five years.
b. Those where both parties are incapable of giving consent to a contract results
to voidable contract.
c. It can be subject to annulment but not ratification
d. It can be subject to annulment as well as ratification

67. Which of the following is NOT true regarding rescissible contracts?

a. 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.
b. The action to claim rescission must be commenced within five years.
c. The action for rescission cannot be instituted except when the party suffering damage
has no other legal means to obtain reparation for the same.
d. Rescission shall be only to the extent necessary to cover the damages caused.

68. The following contracts are voidable or annullable, even though there may have
been no damage to the contracting parties, except?
a. Those where one of the parties is incapable of giving consent to a contract;
b. Those where the consent is vitiated by mistake or fraud,
c. Those where the consent is vitiated by mistake, violence or intimidation
d. Those where both parties are incapable of giving consent to a contract

69. Abigail. 17 years old, sold her Nintendo PS4 worth 10,000 to Abrahm, 18 years old,
on June 30, 2018. What kind of contract was entered into by the parties?
a. perfectly valid
b. void ab initio
c. voidable
d. unenforceable
70. Abigail. 16 years old, sold her Nintendo PS4 worth 10,000 to Abrahm, 15 years old,
on June 30, 2018. What kind of contract was entered into by the parties?
a. perfectly valid
b. void ab initio
c. voidable
d. unenforceable

71. Abigail, 18 years old, donated her Nintendo PS4 worth P10,000 to Jose, 64 years old.
Without any written agreement, Jose accepted the donation. What is the kind of
contract that is present in the case?
a. perfectly valid
b. void ab initio
c. voidable
d. unenforceable

72. Abigail, the lawyer of the John in a land dispute case, purchased the land subject to
litigation without informing the honorable judge. What is the kind of contract that is
present in the case?
a. void ab initio
b. voidable
c. unenforceable
d. rescissible

73. The following contracts are inexistent and void from the beginning, except?
a. Those whose cause, object or purpose is contrary to law, morals, good customs,
public order or public policy;
b. Those whose cause or object did not exist at the time of the transaction;
c. Those which are relatively simulated or fictitious;
d. Those which contemplate an impossible service;

74. Mark sold the land owned by his cousin, Johnny, without any authority of the latter.
Myla, paid mark the amount of P 5,000,000 knowing that Mark was authorized to sell
the said land. What is the status of the contract of sale of land?
a. Voidable
b. Rescissible
c. Unenforceable
d. Void

75. The following are the obligation of the seller, except?

a. To transfer the ownership of the thing which is the object of the contract
b. To warrant the thing sold against eviction
 c. To deliver the thing sold actually but not constructively
d. To take care of the thing with the diligence of the good father of the family

76. What is the obligation of the vendee?

a. To accept the thing delivered by the vendor
b. To pay the value of the thing in sum certain in money or its equivalent
c. Both A and B
d. Neither A nor B

77. Jan and Marsha agreed that the former will purchase the land of the latter
amounting to P 5,000,000. The former gave his car worth P3,000,000 and cash of
P2,000,000 in exchange to the said parcel of land. What kind of contract was
entered into by the parties?
a. Contract of Sale
b. Contract of barter
c. Contract of Donation
d. Antichresis

78. The following persons cannot acquire by purchase, even at a public or judicial
auction, either in person or through the mediation of another, except:
A. The guardian, the property of the person or persons who may be under his
guardianship
B. Agents, the property whose administration or sale may have been
entrusted to them, as long as the consent of the principal has been given
C. Executors and administrators, the property of the estate under administration
D. Public officers and employees, the property of the State or of any subdivision
thereof, or of any government-owned or controlled corporation, or institution,
the administration of which has been intrusted to them

79. The following are true regarding law on sales, except?

a. A contract of sale could be absolute or conditional
b. The thing must be licit and the vendor must have a right to transfer the
ownership thereof at the time it is delivered
c. Things having a potential existence may be the object of the contract of sale
d. The sale of a vain hope or expectancy is generally void

80. Statement 1: A contract for the delivery at a certain price of an article which the
vendor in the ordinary course of his business manufactures or procures for the
general market, whether the same is on hand at the time or not, is a contract of
sale.

Statement 2: If the goods are to be manufactured specially for the customer and
upon his special order, and not for the general market, it is a contract for a piece
of work.
 a. True: True c. False; True
b. True: False d. False; False

81. Statement 1: If the consideration of the contract consists partly in money, and partly
in another thing, the transaction shall be characterized by the manifest intention of
the parties.

Statement 2: If such intention does not clearly appear, it shall be considered a

barter if the value of the thing given as a part of the consideration does not exceed
the amount of the money or its equivalent; otherwise, it is a sale.
a. True: True
b. True: False
c. False; True
d. False; False

82. Option money as opposed to earnest money is?

A. It shall be deducted from the contract price thus, it is part of the down
payment
B. Results in the perfection of a contract of sale
C. The payment will not transfer ownership to the vendee yet until full
payment of the contract price
D. Payment secures the vendees right but not the obligation to
purchase within a certain period of time

83. Anna borrowed P 100,000 from Carla. The loan shall be due and demandable on
September 30, 2019 and was secured by a parcel of land located in Quezon City.
They agreed in writing indicated in a public instrument that failure of Anna to pay
the loan amount will result to automatic appropriation of the said land in favor of
Carla. Today, Anna was not able to pay the said loan. Who is the rightful owner of
the land?
a. Carla because of their agreement that failure to pay the loan will transfer
ownership of the land to her
b. Carla because there was a valid contract of sale with the land as the
object and the loan amount as the consideration
c. Anna because the sale was void ab initio regardless of the
agreement
d. Anna because there was no delivery of the thing yet

84. Alex sold his cellphone to Benjie. However, the while in transit, the courier had an
accident resulting to the total damage of the said cellphone. Who shall bear the
loss?
 a. Alex as the vendor shall bear the loss if they agreed on FOB shipping
point
b. Benjie shall bear the loss if they agreed on FOB destination
c. Alex shall bear the loss under the concept of genus nunquam peruit
d. Alex shall bear the loss under the concept of res peruit domino

85. This shall take place whenever by a final judgment based on a right prior to the sale
or an act imputable to the vendor, the vendee is deprived of the whole or of a part
of the thing purchased? (1548)
A. Emission
B. Encumbrance
C. Eviction
D. Elimination

86. If the same movable property should have been sold to different vendees, the
ownership shall be transferred to?
A. The person who is a holder of the oldest title
B. The person who first register in good faith
C. The person who may have first taken possession in good faith
D. The person who may have first taken possession even in bad faith

87. Under BP 22, the Anti-bouncing check laws, the issuer shall be liable in the
following cases, except?
a. Issuance of a check with the knowledge of insufficiency of funds in the
account
b. Issuance of a check drawn against a closed account
c. Issuance of a check knowing the sufficiency of funds from date of
issuance but it bounced when check was cashed then failed to fund
thereafter
d. Issuance of a check knowing the sufficiency of funds from date of
issuance but it bounced when check was cashed then immediately
fund the account within reasonable time.

88. The remedy in case of failure to pay a movable property in installment basis is?
a. The seller may ask for specific performance plus damages
b. The seller may ask for rescission of the contract pus damages
c. The seller may ask for the foreclosure of real mortgage
d. The seller may seek for specific performance or rescission of the
contract plus damages

89. In case of sale of an immovable property in installment basis, when the buyer has
already paid four out of twenty four years of annual payment, what is the remedy
of the buyer?
 a. The buyer will be given a grace period of 60 days plus reimbursement of
total installment payments made
b. The buyer will be given a grace period of 120 days only without any
reimbursement.
c. The buyer will be given a grace period of 120 days plus reimbursement
of 50% of the total payments made.
d. The buyer will be given a grace period of 60 days plus reimbursement of
50% of the total payments made.

90. A home solicitation sale shall not represent that following except?
A. the buyer has been specially selected
B. a survey, test or research is being conducted
C. the seller is making a special offer to a few persons only for a limited
period of time
D. the buyer has not been specially selected

91. This law requires that all consumer products sold in retail to the public shall bear an
appropriate price tag, label, or marking indicating the price of the article?
a. RA 11232
b. RA 7394
c. BP 22
d. BP 68

92. This is an act that strengthens consumer protection in relation to the purchase of
brand new motor vehicles?
a. Mango Law
b. Apple Law
c. Lemon Law
d. Banana Law
93. What is the reasonable allowance for use of brand new vehicle?

a. twenty percent (20%) per annum deduction from the purchase price, or
the product of the distance travelled in kilometers and the purchase price
divided by one hundred thousand (100,000) kilometers, whichever is
higher.

b. twenty percent (20%) per annum deduction from the purchase price,
or the product of the distance travelled in kilometers and the
purchase price divided by one hundred thousand
(100,000) kilometers, whichever is lower.

c. twenty percent (25%) per annum deduction from the purchase price, or
the product of the distance travelled in kilometers and the purchase price
divided by one hundred thousand (100,000) kilometers, whichever is
higher
 d. twenty percent (25%) per annum deduction from the purchase price, or
the product of the distance travelled in kilometers and the purchase price
divided by one hundred thousand (100,000) kilometers, whichever is
lower.

94. Joshua is obliged to deliver his only horse or Cow or Goat or Sheep to Aika on
June 20, 2019. On June 17, 2019, Aika forgot to unplug his cellphone charger
causing a raging fire that resulted in the total destruction of his rest house of
Joshua and death of the latter’s animals except the Cow. If the right of choice
belongs to Joshua, what is or are the effect/s?

a. Debtor may choose from the remaining without indemnity for damages
b. Debtor may choose from the remaining plus indemnity for damages
c. Debtor may rescind the contract plus damages
d. Both A or C are the effects

95. Joshua is obliged to deliver his only horse or Cow or Goat or Sheep to Aika on
June 20, 2019. On June 17, 2019, Aika forgot to unplug his cellphone charger
causing a raging fire that resulted in the total destruction of his rest house of
Joshua and death of the latter’s animals except the Cow and Sheep. If the right of
choice belongs to Aika, what is or are the effect/s?

a. Creditor may choose from the remaining without indemnity for

damages
b. Creditor may choose from the remaining plus indemnity for damages
c. Creditor may rescind the contract plus damages
d. Both A or C are the effects

96. Statement 1: Payment means not only the delivery of money but also the
performance, in any other manner, of an obligation.
Statement 2: When the obligee accepts the performance, knowing its
incompleteness or irregularity, and without expressing any protest or
objection, the obligation is deemed fully complied with.

A. True; True
B. True; False
C. False; True
D. False; False
 97. Statement 1: The creditor 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.

Statement 2: Whoever pays for another may demand from the debtor what
he has paid, except that if he paid without the knowledge or against the will
of the debtor, he can recover only insofar as the payment has been beneficial
to the debtor.
A. True; True
B. True; False
C. False; True
D. False; False

98. The following are requisites of reformation of contracts, except?

a. There must be meeting of the minds of the parties to the contract
b. The instrument does not express the true intention of the parties
c. The failure of the instrument to express the true intention of the parties
is not due to mistake, fraud, inequitable conduct or accident.
d. The failure of the instrument to express the true intention of the parties is due
to mistake, fraud, inequitable conduct or accident.

99. Which of the following is correct?

a. In chattel mortgage, the delivery of the personal property to the mortgagee

is necessary, while in pledge, such delivery is not necessary;

b. In chattel mortgage, the registration of the same in the Chattel Mortgage

Register is not necessary for its validity, while in pledge, registration in the
Registry of Property is necessary.

c. In chattel mortgage, the creditor is entitled to recover any deficiency even

if the chattel mortgage is a security for the purchase of personal property
in installments

d. In chattel mortgage, the creditor is entitled to recover any deficiency

except if the chattel mortgage is a security for the purchase of
personal property in installments

100. All are characteristics of void or inexistent contracts, except?

a. As a rule they produce no effect whatsoever either against or in favor of anyone.
b. They can be ratified.
c. The right to set up the defense of illegality cannot be waived.
d. The action or defense for the declaration of the inexistence of a contract does not
prescribe.