CPA Review School of the Philippines

SALES Manila DELA CRUZ

1. Dacion en pago as distinguished from a contract of sale

a. There is a greater freedom in fixing the price
b. Obligations are created
c. Ownership of the object is transferred to the other party
d. A pre-existing credit is extinguished

2. As a rule, this contract of sale involving a piece of land is void,

a. Between a minor and a deaf mute who does not know how to write
b. Between two insane persons who did not act during lucid interval
c. Between first degree cousins
d. Between husband and wife

3. One of the following is not correct

a. Things subject to a resolutory condition may be the object of the contract of sale
b. A thing is generic when it is particularly designated or physically segregated from all others
of the same class
c. Things having potential existence may be the object of the contract of sale
d. The sole owner of a thing may sell an undivided interest therein

4. A needs a size 10 of model 101 of Delicious Shoes regularly available to the public for her boyfriend B,
but the same is out of stock so she placed an order for one. On the other hand, B placed an order for size
No. 8, colored violet, (something not ordinarily made by the company) to be given to A. Which is
correct?
a. Both are contracts of sale
b. Both are contracts for a piece of work
c. First is a contract of sale, second is a contract for a piece of work
d. First is a contract for a piece of work, second is a contract of sale

5. A offered to sell for P12,000,000 her house and lot to B who was interested in buying the same. In her
letter to B, A stated that she is giving B a period of one month within which to raise the amount and that
as soon as B is ready, they will sign the deed of sale. Five days before the expiration of the one month
period. A went to B and told her that she is no longer willing to sell the property unless the price is
increased to P15,000,000. Which is correct?
a. B may compel A to accept the P12,000,000 first offered
b. A may compel B to pay P15,000,000
c. A and B should shoulder the P3,000,000 difference
d. B cannot compel A to accept the P12,000,000 first offered

6. A, 17 years old, sold to B, of legal age, her necklace worth P20,000 for P15,000. Later, B sold the
necklace to C for P20,000. Which of the following statements is correct?
a. A has got a voidable title because at the time of sale, she is a minor
b. A can ask for rescission of the sale to C because she suffered a lesion of more than ¼ of the value of
the property
c. If C is in bad faith, C becomes the owner of the necklace upon delivery to him but his title is voidable
d. A can ask for the annulment of the sale to C because at the time of sale she is a minor

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7. Goods are deemed in transit
a. When the buyer accepts delivery of the goods upon arrival at destination
b. When the buyer intercepts and lawfully takes possession of the goods at any point before
destination
c. From the time they are delivered by the seller to a common carrier or other bailee for transmission
to the buyer, up to the time that the buyer or his agent takes delivery of the goods from the
carrier or bailee
d. When the carrier or bailee, upon arrival of the goods at destination acknowledges to the buyer or
his agent that he is holding the goods as bailee for the letter

8. Goods are deemed no longer in transit

a. If the goods are rejected by the buyer for a valid reason and the carrier or other bailee continues in
possession of them, even if the seller has refused to receive them back
b. From the time they are delivered to a carrier by land, water or air for the purpose of transmission
to the buyer
c. From the time they are delivered to a bailee for the purpose of transmission to the buyer until the
buyer or his agent in that behalf, takes delivery of them from such bailee.
d. If the carrier or other bailee wrongfully refuses to deliver the goods to the buyer or his agent in
that behalf

9. A sold to B orally a parcel of land for P200,000. A effected the delivery of the land. The payment of the
price was to be made three months later. At the end of the three month period
a. B may refuse to pay claiming in his defense the Statute of Frauds
b. B may return the parcel of land to A
c. A can collect from B because the contract has already been executed
d. B may refuse to pay on the ground that there is no written contract to support the sale

10. On January 10, 2015, A sold for P2M her house and lot to B. It was agreed that delivery of the house
and lot, and the payment therefore, would be made on March 1, 2015. Unfortunately, C a stranger
negligently set the house on fire on February 25, 2015, and the house was completely destroyed. Which
is correct?
a. B is not required to pay the P2M since the contract had no subject matter
b. A must still deliver the lot but is excused from delivering the house, while B must still pay the
P2M
c. A must still deliver the lot while B should pay only the amount equivalent to the value of the lot
d. A need not deliver the lot while B need not pay the P2M

11. If immovable property should have been sold to different vendees, the ownership shall be transferred to
the person
a. Who have first taken possession in good faith
b. Who presents the oldest title in good faith
c. Who in good faith first recorded it in the Registry of Property
d. Who have paid in good faith the purchase price in full

12. Using the preceding number, if movable property, it shall belong to the person
a. Who have paid in good the purchase price in full
b. Who in good faith first recorded it in the Registry of Property
c. Who presents the oldest title in good faith
d. Who have first taken possession in good faith

13. Action by the vendee against the vendor to nullify the sale due to some vices or defects which render the
object of sale unfit for the use intended or knowledge of which, the vendee would not have bought the
thing
a. Accion quanti minoris b. Accion reinvidicatoria c. Accion pauliana d. Redhibilitory action

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14. Action to seek a corresponding reduction in price by reason of some vices or defects in the thing
purchased
a. Accion quanti minoris b. Accion reinvidicatoria c. Accion pauliana d. Redhibilitory action

15. The redhibitory action based on the faults or defects of animals must be brought within
a. 30 days from delivery to the vendee c. 45 days from delivery to the vendee
b. 40 days from delivery to the vendee d. 6 months from delivery to the vendee

16. This serves as a proof of the perfection of the contract of sale

a. Dacion en pago b. Option money c. Delivery d. Arras

17. A contract of sale is not a(an)

a. Onerous contract b. Accessory contract c. Commutative contract d. Bilateral contract

18. Emptio spei as distinguished from emptio rei speratae

a. Sale of a future thing c. Its quantity and quality are unknown
b. Should come into existence d. Sale of a present thing

19. The sale of an expected thing

a. Dacion en pago b. Payment by cession c. Emptio spei d. Emptio rei-speratae

20. The sale of the hope itself

a. Dacion en pago b. Payment by cession c. Emptio spei d. Emptio rei-speratae

21. In contract of sale, if the price is absolutely simulated, the sale is

a. Unenforceable b. Voidable c. Void d. Rescissible

22. This is not an essential element of a contract of sale

a. Subject matter which should be determinate
b. Consent of the contracting parties
c. Warranty against eviction
d. Consideration which is certain in money or its equivalent

23. When a sale of a piece of land or any interest therein is through an agent, the authority of the agent shall
be in writing, otherwise the sale is
a. valid b. voidable c. unenforceable d. void

24. A contract of sale is not

a. A consensual contract c. A reciprocal contract
b. A real contract d. An onerous and commutative contract

25. Not an implied warranty in a contract of sale

a. Right to sell the thing at the time of perfection of the contract
b. Reasonably fit for the purpose they are acquired
c. Merchantable in quality
d. Free from charges or encumbrances not declared or known to the buyer

26. Which of the following cannot be an object of a contract of sale?

a. Sale of credit
b. Young of animal not yet conceived at the time of perfection
c. Land which the seller expects to buy
d. Future inheritance

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27. Delivery by merely pointing to the object of sale if it cannot be delivered to the vendee at the time of the
sale is
a. Traditio longa manu c. Traditio constitutum possessorium
b. Traditio brevi manu d. Traditio symbolica

28. Effected when the object of sale is already in the possession of the vendee at the time of sale so that
delivery need no longer be made is
a. Traditio longa manu c. Traditio constitutum possessorium
b. Traditio brevi manu d. Traditio symbolica

29. When the owner of the thing sells it to vendee, but continues to have possession or occupation of the
thing not as owner but as tenant or lessee
a. Traditio longa manu c. Traditio constitutum possessorium
b. Traditio brevi manu d. Traditio symbolica

30. Quasi-traditio is equivalent to

a. Traditio longa-manu c. Traditio constitutum possessorium
b. Traditio brevi-manu d. Execution of a public instrument

For items 31 – 34

31. If the object of the contract is specially made or manufactured at the specific order of another, it is a
contract for a piece of work. This is
a. English rule b.Massachusetts rule c. New York rule d. Chicago rule

32. If the article already exists and subsequently acquired by another, it is a contract of sale, and if the article
is still to be manufactured at the instance of another, it is a contract for a piece of work. This is
a. English rule b. Massachusetts rule c. New York rule d. Chicago rule

33. If the material used in the manufacturer of the article is more valuable, it is a contract of sale, and if the
labor or skill is more valuable than the material used in the manufacture of the article, it is a contract for
a piece of work. This is
a. English rule b. Massachusetts rule c. New York rule d. Chicago rule

34. The rule observed in the Philippines is

a. English rule b.Massachusetts rule c. New York rule d. Chicago rule

35. Warranty against hidden defects is

a. An essential element b. A natural element c. An accidental element d. An artificial element

36. The Realty Installment Buyer Protection Act applies to all transactions involving the sale or financing of
real estate on installment but it excludes the following except:
a. Sale or financing of industrial lots c. Sale to tenants under the Land Reform Code
b. Sale or financing of commercial building d. Sale of residential condominiums

37. In a contract of sale of personal property, the price of which is payable in installments, the vendor may
exercise any of the following remedies, except
a. Exact fulfillment of the obligation, should the vendee fail to pay any installment
b. Cancel the sale, should the vendee’s failure to pay cover two or more installments
c. Foreclose the chattel mortgage on the thing sold, if one has been constituted should the
vendee’s failure to pay cover two or more installments
d. Rescind the sale should the vendee fail to pay any installment.

38. The right of the seller to stop goods in transit, upon discovering that the buyer does not have the funds to
pay for the goods
a. Pre-emptive right b. Appraisal right c. Voting right d. Right of stoppage in transitu
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39. A sold to B a parcel of land for P3.8M. The sale is evidenced by a memorandum of agreement of sale
written in the Bicolano dialect. One week later, A sold the same parcel of land to C for P4M. This is
evidenced by a formal deed of sale. Upon buying the property, C, who was aware of the first sale,
immediately took possession of the lot. When informed of the second sale, B subsequently registered an
adverse claim to the property. Later, C registered the deed of sale in her favor. The parcel of land shall
belong to
a. B because he has got an older title c. C because he is the first to take possession
b. C because he is the fist to register d. No one as both sales are void

40. Voluntary renunciation made by the buyer of his right to warranty against eviction where in case the
buyer is evicted, the seller is liable to the value of the thing at the time of eviction.
a.Waiver intentionada b. Waiver consciente c. Waiver cursunada d. Waiver inocente

41. Using the preceding number, where the seller is no longer liable
a.Waiver intentionada b. Waiver consciente c. Waiver cursunada d. Waiver inocente

42. A contract of sale whereby the seller acquires the right to redeem or repurchase the object of the sale
from the buyer within a certain period agreed upon
a. Equitable mortgage b. Absolute sale c. On sale or return d. Pacto de retro sale

43. A sold to B his car and promised to deliver ten days later. The next day, after the sale to B, A sold the
same car to C and immediately effected delivery. On the day agreed upon, A did not deliver the car to B.
Which is correct?
a. B can cancel the contract between A and C, because the contract between A and B was
perfected ahead of the contract between A and C
b. B should make a demand to make A in default
c. A is liable to B for the value of the car plus damages after B makes a demand
d. A is liable to B for damages and is in default without need of any demand

44. A sold to B her Yamaha organ. It was agreed that A would fix the price a week later. At the agreed
time, A named the price P10,000. B agreed. Was the sale perfected?
a. No, because the price was left to the discretion of one of the contracting parties
b. No, because at the time of sale the price was not fixed
c. Yes, because the price fixed by one of the parties was accepted by the other
d. Yes, because there was agreement that A would fix the price

45. After the death of C, A, C’s son, sold his inheritance though its amount has not yet been determined to B
for a consideration of P1,000,000. Which is correct?
a. The contract is valid if the value of inheritance is at least equal to P1,000,000
b. The contract is valid even though the inheritance to be turned over to B is less than P1M
c. The contract is void as future inheritance cannot be the object of sale
d. The contract is unenforceable

46. A stole a fountain pen from P and sold it to B Merchandise, a “store for pens”, which paid for it in good
faith, not knowing it was stolen. The “store” then sold it to B, a reviewee. Which is correct?
a. C cannot be considered as the owner because the original seller (A) is not the real owner
b. P may recover the fountain pen from C without reimbursement because he is the legal owner
c. C became the owner because he purchased the pen from a merchant store.
d. C became the owner regardless of whether the seller is a store for pens or not because C
bought it in good faith.

47. When goods are delivered to the buyer on “sale or return” for period of seven days, ownership of the
goods passes to the buyer
a. Upon perfection of the contract
b. Upon acceptance by the buyer of the offer of the seller
c. Upon expiration of seven days
d. Upon delivery of the goods
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48. B imported radios from Taiwan and asked for 220 volts radios. The radios arrived clearly labeled 220
volts and B sold them to the public as such. Later the customer complained that the radios have been
mislabeled by the manufacturer and that they were good only for 110 volts. As a consequence
a. B is liable to the vendees for any hidden defects even though he is not aware
b. B is not liable because he is in good faith
c. B is not liable under the principle of “caveat emptor” or let the buyer beware
c. The vendees may hold the manufacturer liable but not B because B specifically asked for 220
volts

49. If redemption is to be made by the seller, one of the following need not be given to the buyer
a. Expenses of the contract c. Necessary expenses on the thing sold
b. Interest on the price of the sale d. Price of the sale

50. Not an element of the sellers right of stoppage in transit

a. The good must be in transit c. The seller must be in possession of the goods
b. The buyer must be insolvent d. The seller must be unpaid

51. A sold his only car to B for P300,000 to be paid as follows: P150,000 upon delivery of the car to B and
the balance at P10,000 per month until full payment of the purchase price. Later the car gets burned in
the possession of B through fortuitous event and without B’s fault, before full payment of the balance. Is
B obliged to pay the balance?
a. No, because the car was lost through fortuitous event and without B’s fault, hence B’s
obligation is extinguished
b. No, because the loss should be borne by the seller as this an installment sale so until the buyer
pays the full amount of the price of the sale, A remains to be the owner
c. Yes, but A must give another car to B because of the principle “genus nunquam peruit” or
generic thing never perishes
d. Yes, because of the principle “res perit domino” or the thing perishes with the owner

52. A, B and C are co-owners of an undivided parcel of land, A sold his 1/3 interest to B absolutely. Which
is correct?
a. C may exercise his right of redemption on the interest sold by A to B
b. C can not exercise the right of redemption because the sale was made in favor of a co-owner
c. The sale made by A to B is void because it was not made in favor of a stranger
d. C may redeem only ½ of the interest sold by A to B

53. Using the preceding number, Suppose, instead of selling his interest to B, A sold it to D, who can
exercise the right of redemption?
a. Both B and C b. B but not C c. C but not B d. A, B and C

54. A offered for sale to B 20 cavans of wagwag rice and fixed the price per cavan at P10 over the price
offered at Y’s store in Quinta Market. The price is
a. Not certain because the price at Quinta Market is not stated
b. Certain because it has got reference to another thing which is certain
c. Certain because there is a price ceiling for price of rice
d. Not certain so the court may fix the price

55. A sold his motor vehicle to B who bought it for P200,000. It turned out however, that A has 2 motor
vehicles: Toyota valued at P230,000 and Lancer valued at P220,000. Which is correct?
a. There is no contract of sale between A and B
b. The parties may ask for interpretation or reformation
c. The parties can ask for annulment of the contract
d. B may choose between the Toyota or Lancer

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56. A offers to B 100 electric fans for P80,000 payable in 60 days with 12% interest per annum. B accepted
the offer by telegram provided that interest is reduced to 6%. If there is a no further communication
between A and B relating to the terms
a. The contract is perfected because of the acceptance by B
b. There is no contract yet between A and B because B made a counter offer
c. The contract is perfected under the terms of A
d. There is no contract yet unless B gives earnest money

57. A owns 50 mango trees bearing fruits, ready for harvest. She sold all the fruits of all the trees to B who
paid P100,000. A told B that he can harvest her fruits anytime he likes and pointing at the mango trees.
For legal purposes, A has fulfilled her obligation to deliver the mango fruits to B by
a. Traditio brevi-manu c. Traditio longa-manu
b. Traditio symbolica d. Traditio constitutum possessorium

58. A sold her specific car to B for P200,000 payable in 5 equal installments. A delivered the car to B but a
mortgage was constituted on the car to answer for the unpaid installments B paid the first 2 installments
but failed to pay the last 3 installments. A foreclosed the mortgaged property and sold it at public
auction for P100,000. Which is correct?
a. A can recover from B the balance of P20,000 even if there is no stipulation to that effect
b. A can recover from B the balance of P20,000 if there is stipulation to that effect
c. A cannot recover the deficiency except if there is stipulation to that effect
d. A cannot recover the deficiency even if there is stipulation to the contrary

59. Ownership of the thing sold is

a. Retained by the seller in ‘sale or return’
b. Transferred to the buyer upon constructive or actual delivery of the thing sold
c. Acquired by the buyer upon perfection of the contract
d. Transferred to the buyer upon acceptance of the price

60. Y sold his horse to Z for P50,000. No payment has yet been made and the sales document does not
provide the date of delivery. Before delivery and payment the horse gave birth to a baby horse, which is
correct?
a. Z is entitled to the baby horse which was born after the perfection of the contract
b. Y is entitled to the fruit (baby horse) as Z has not paid the price yet
c. Y is entitled to the (baby horse) because it was born before his obligation to deliver arises
d. Z should pay additional amount for the baby horse to be entitled to it

61. A contract of sale is in the stage of conception when

a. There is meeting of the minds c. The parties come to an agreement
b. Negotiations are in progress d. The contract is perfected

62. A seller sold to a buyer a piece of jewelry at a price of P20,000. The contract provides that the buyer will
pay the seller cash-P8,000 and for the balance, the buyer will give the seller a micro oven worth P12,000.
What is the nature of the contract?
a. Sale c. Barter
b. Partly sale and partly barter d. Commodatum

63. A, the guardian of B, sold B’s house and lot worth P480,000 for P240,000. Which is correct?
a. The contract can be rescinded because of inadequacy of price
b. The contract cannot be rescinded because there is no fraud, mistake or undue influence
c. The contract cannot be rescinded because all the elements of a contract are present
d. The contract can be rescinded by A.

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64. A leased to B a 5 DOC generator for two years at a lease rental fee of P1,000 per month and signed an
option in favor of B to buy the generator at the end of the term of the lease at P60,000. All rental fees
paid are to be considered as partial payment of the sale. After 12 months B was able to pay the rental fees
for 9 months and was in arrears for three months. A terminated the lease contract and repossessed the
generator. The consequence of the transaction is
a. A can collect the rental fees for three months which are in arrears.
b. A can collect the rental fees for the unexpired 12 months of the lease contract.
c. When A took possession of the generator, he has no further action against B
d. A in terminating the lease and repossessing the generator is obliged to refund the 9 months
rental fee, paid by B even if there is a stipulation to the contrary

65. X sold his car to Y for P50,000. No date was fixed for the performance of the obligation of the seller and
the buyer. The obligation of X is
a. To deliver the car immediately because the sale is a perfected contract
b. To deliver the car only after Y writes to X demanding the delivery of the car
c. To deliver the car only after Y pays the P50,000
d. To rescind the contract because there is no time fixed for the delivery

For numbers 66 – 81
a. both are true c. only the first is true
b. both are false d. only the second is true

66. The vendor need not be the owner at the time the sale is perfected. It is sufficient that he is the
owner at the time the thing sold is delivered.
The sale of a vain hope or expectancy is voidable.

67. There may be a contract of sale of goods, whose acquisition by the seller depends upon a
contingency which may or may not happen.
If the consideration of the contract consists partly in money and partly in another thing, it shall be
considered a barter if the value of the thing given as a part of the consideration exceeds the amount
of the money or its equivalent.

68. If the price is grossly inadequate, the sale is void.

Whenever option money is given in a contract of sale, it shall be considered as part of the price
and a proof of the perfection of the contract.

69. Earnest money and option money both apply to perfected sale.
In a contract of sale of personal property the price of which is payable in installment, the vendor
may cancel the sale should the vendee fail to pay.

70. Should the vendee’s failure to pay, cover two or more installments, the vendor may foreclose the
chattel mortgage on the thing sold but he shall have no further action against the purchaser to
recover any unpaid balance of the price, except if there is an agreement to the contrary.
Sale is a consensual contract, therefore delivery or payment is not essential for perfection.

71. The ownership of the thing sold shall be transferred to the vendee upon perfection of the contract.
An unaccepted unilateral promise to buy or to sell a determinate thing for a price certain is binding
upon the promissor.

72. The husband and the wife cannot sell property to each other, as a rule.
The sale of a piece of land or interest therein when made thru an agent is void unless the agent’s
authority is in writing even if the sale itself is in a public instrument and has been registered.

73. The expenses for the execution and registration of the sale shall be borne by the vendee, unless
there is a stipulation to the contrary.
If the same thing should have been sold to different vendees the ownership shall be transferred to
the person who may have taken possession thereof in good faith.

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74. Any stipulation exempting the vendor from the obligation to answer for eviction shall be void.
The vendor is responsible to the vendee for any hidden faults or defects in the thing sold only if he
was aware thereof.

75. If the animal sold should die within three (3) days after its purchase, the vendor shall be liable to
the vendee.
The fixing of the price can never be left to the discretion of one of the contracting parties.
However, if the price fixed by one of the parties is accepted by the other, the sale is perfected.

76. Option money is considered as part of the purchase price while earnest money is not.
The Maceda Law refers to the sale of personal property by installments while the Recto Law refers
to the sale of real property by installments.

77. If two or more animals are sold together, whether for lump sum or for a separate price for each of
them, the redhibitory defect of one shall give rise to the redhibition of the others.
There is no warranty against hidden defects of animals sold at fairs or at public auctions or of
livestock sold as condemned.

78. The ownership in the thing shall not pass to the purchaser until he has fully paid the price.
If at the time the contract of sale is perfected, the thing which is the object of the contract has been
partially lost, the contract shall be without effect.

79. Where the seller of goods has a voidable title thereto, but his title has not been avoided at the time
of the sale, a buyer in good faith acquires a good title to the goods.
If the vendee has renounced the right to warranty in case of eviction, and eviction should take
place, the vendor shall only pay the value which the thing sold had at the time of sale.

80. Unless otherwise agreed, the buyer of goods is not bound to accept delivery thereof by installment.
In case of doubt, a contract purporting to be an equitable mortgage shall be construed as a sale
with a right to repurchase.

81. The creditors of the vendor cannot make use of the right of redemption against the vendee, until
they have exhausted the property of the vendor.
Sale is a real contract because delivery is necessary to transfer ownership to the buyer.

The End!!

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