Business law

Midterm Examination

Instruction: Write TRUE if the statement is true and write FALSE if the answer is false.

1. Payment only refers to delivery of money

2. For obligations to give: The debtor of a thing can compel the creditor to receive a
different one, although the latter may be of the same value as, or more valuable than that which
is due.
3. The payment of debts in money shall be made in the currency stipulated, and if it is not
possible to deliver such currency, then in the currency which is legal tender in the Philippines
4. The delivery of promissory notes payable to order, or bills of exchange or other
mercantile documents shall produce the effect of payment even if they have not been cashed
5. The creditor may refuse to accept payment (e.g. checks) not made in legal tender
6. In case an extraordinary inflation or deflation of the currency stipulated should
supervene, the value of the currency at the time of the establishment of the obligation shall be the
basis of payment, unless there is an agreement to the contrary.
7. He who has various debts of the same kind in favor of one and the same creditor, may
declare at the time of making the payment, to which of them the same must be applied
8. Rules on application of payment may be invoked by a surety or solidary guarantor
9. Dation in Payment is the delivery and transmission of ownership of a thing by the debtor
to the creditor as an accepted equivalent of the performance of the obligation
10. Dation in Payment refers to a special form of payment where the debtor assigns/abandons
ALL his property for the benefit of his creditors in order that from the proceeds thereof, the latter
may obtain payment of their credits
11. Payment by Cession is the deposit of the object of obligation in a competent court in
accordance with the rules prescribed by law whenever the creditor unjustly refuses payment or
because of some circumstances which render direct payment to the creditor impossible or
inadvisable
12. Loss of determinate things extinguishes the obligation
13. Loss of indeterminate things extinguishes the obligation
14. It is presumed that loss was due to the fault of the debtor if the thing is lost while in the
possession of the debtor and there is no proof of fortuitous event
15. The debtor in obligations to do shall also be released when the prestation becomes legally
or physically impossible without the fault of the obligor
16. Condonation or remission is essentially gratuitous
17. Condonation may be made expressly only
18. Express condonation shall comply with the forms of Sale
19. For express remission of real or immovable property to be valid, it must be in a private
document
20. Confusion is the meeting in one person of the qualities of creditor and debtor of the same
obligation
21. Confusion should take place between principal debtor and creditor
22. Confusion and Compensation are one and the same
23. Confusion shall take place when two persons, in their own right, are creditors and debtors
of each other.
24. In Compensation, both debts must consist in a sum of money, or if the things due are
consumable, of the same kind and quality
25. In compensation, it is not necessary that both debts are due and demandable
26. Voluntary Compensation takes place when parties who are mutually creditors and debtors
of each other agree to compensate their respective obligations even though one of the requisites
of compensation may be lacking
27. A contract is a meeting of bodies between two persons whereby one binds himself, with
respect to the other, to give something or to render some service
28. The principle of mutuality of contracts refers to the rule so fundamental in all contracts,
that once the contract is perfected, it shall be of obligatory force upon both of the contracting
parties
29. Principle of Autonomy of Contracts refers to the position of essential equality that is
occupied by both contracting parties in relation to the contract. The contract must be binding
upon both of the parties
30. Breach of contract is defined as the failure, without legal reason, to comply with the
terms of the contract
31. The perfection stage of contracts is also called as the conception
32. Consummation stage of a contract is the stage to look at to determine whether there has
been a breach of the contract
33. The stage to look at to determine the status of the contract (i.e., valid, voidable, void,
unenforceable) is the perfection stage of the contract
34. Consensual contracts are contracts where consent is sufficient to perfect the contract
35. Real contracts are contracts where delivery, actual or constructive, is required in addition
to consent
36. Solemn contracts are contracts where special formalities are not required for perfection
37. Accessory contracts are contracts which depend on another contract for its existence. It
can generally exist by itself
38. Gratuitous contracts are contracts where no correlative prestation is received by one party
39. A contract is perfected by mere consent. From the moment of a meeting of the offer and
the acceptance upon the object and the cause that would constitute the contract, consent arises.
40. submission of a counter-offer is one of the modes of terminating an offer
41. Acceptance of a contract must be absolute, unconditional, and without variance of any
sort from the offer. However, it does not require that such must be made known to the offeror.
42. Acceptance made by letter or telegram does will bind the offeror even before the time it
came to his knowledge.
43. A contract is a unilateral proposition which one party makes to the other for the
celebration of the contract
44. Bilateral contracts are contracts where both parties are bound by reciprocal prestations.
45. Aleatory contracts are contracts where the fulfillment is dependent upon chance
46. Acceptance refers to a unilateral proposition which one party makes to the other for the
celebration of the contract.
47. Acceptance made by letter or telegram does not bind the offeror except from the time it
came to his knowledge. The contract, in such a case, is presumed to have been entered into in the
place where the offer was made
48. minors are absolutely incapacitated to give consent
49. Void contracts are valid until annulled
50. Deaf-mutes who do not know how to read and write are incapacitated to give consent

Bonus question (5 points)

What are the essential requisites of a Contract?