MQE REVIEWER IN OBLIGATION AND CONTRACTS

1. The elements of a contract without which a contract would not exist are known
as: D
a.    Accidental elements
b.    Natural elements
c.    Special elements
d.    Essential elements
2. The warranty against hidden defects in a contract of sale is an example of: A
a.    Natural element
b.    Accidental element
c.    Original element
d.    Stipulated element
3. A contract that does not have any special name under the law is known as:B
a.    Nominate contract
b.    Innominate contract
c.    Special contract
d.    Nominal contract
4. The contract must bind both contracting parties; its validity or compliance
cannot be left to the will of one of them. This is known as the principle of:A
a.    Mutuality of contract
b.    Relativity of contract
c.    Consensuality of contract
d.    Freedom of contract
5. The principle that contracts are perfected by mere consent is known as: B
a.    Consistency of contract
b.    Consensuality of contract
c.    Consummation of contract
d.    Mutuality of contract
6. It is the manifestation of the meeting of the offer and the acceptance upon the
thing and the cause which are to constitute the contract. C
a.    Consideration
b.    Contract
c.    Consent
d.    Cause
7. Three of the following instances will render an offer ineffective before
acceptance is conveyed. Which one is not? D
a.    Civil interdiction of either party
b.    Insolvency of either party
c.    Insanity of either party
d.    Intoxication of either party
8. One of the following is not incapable of giving his consent. C
a.    Insane persons
b.    Deaf-mutes who do not know how to write
c.    Deaf-mutes who do not know how to read
d.    Unemancipated minors
9. Aside from fraud and undue influence, the following are the vices of consent,
except: D
a.    Violence
b.    Intimidation
c.    Mistake
d.    Dealer’s talk
10.It exists when a person takes improper advantage of his power over the will of
another depriving the latter of a reasonable freedom of choice. D
a.    Intimidation
b.    Duress
c.    Threat
d.    Undue influence
11.An absolutely simulated contract is: A
a.    Void
b.    Voidable
c.    Valid
d.    Unenforceable
12.S and B orally entered into a contract whereby S sold his one year production
of eggs in his poultry farm to B for P50,000.00 which amount B immediately
gave in cash to S. the contract between S and B is: B
a.    Void because the object was not existing at the time of execution of the
contract
b.    Valid because future things may be the object of contracts
c.    Rescissible because B  will likely suffer damage if the eggs do not come
into existence
d.    Unenforceable because the contract was not in writing
13.A contract whose cause is the liberality of the benefactor is: A
a.    A gratuitous contract or contract of pure beneficence
b.    A remuneratory contract
c.    An aleatory contract
d.    An onerous contract
14.The following are characteristics of rescissible contracts, except: D
a.    They may be set aside for equitable reasons
b.    They are valid until rescinded
c.    The action to rescind them prescribes
d.    The action to rescind them are not available to third persons even if their
interests are directly affected
15.The following are the requisites of a rescissible payment, except: A
a.    The debt is already due
b.    The debtor is insolvent
c.    The debtor pays the debt
d.    The payment is not yet due
16.The following contracts are voidable, except: B
a.    Contracts entered into during a state of drunkenness or hypnotic spell
b.    Contracts entered into during a lucid interval
c.    Contracts where one of the parties is incapable of giving consent
d.    Contracts where the consent of one party is vitiated by violence,
intimidation, mistake, fraud or undue influence
17.The following contracts are unenforceable, except: D
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,
fraud or undue influence
18.The statute of frauds applies only to: D
a.    Wholly executed contracts
b.    Contracts wholly or partially executed on the part of the debtor
c.    Contracts wholly or partially executed on the part of the creditor
d.    Wholly executory contracts
19.The following contracts are void or inexistent, except: D
a.    Those whose cause, object or purpose is contrary to law, morals, good
 customs, public order or public policy
b.    Those which are absolutely simulated or fictitious 
c.    Those whose cause or object did not exist at the time of transaction
d.    Those where one of the parties employed fraud to obtain the consent of the
other
20.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:
D
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 favour of the government
d.    The innocent party cannot recover what he has given
21.Reformation of an instrument is available in the following cases, except:
a.    When a mutual mistake of the parties causes the failure of the instrument to
disclose their agreement  D
b.    When one party was mistaken and the other party acted fraudulently or
inequitably in such a way that the instrument does not show the true intention
c.    When a party was mistaken and the other knew or believed that the
instrument did not state their real agreement
d.    When one of the parties has brought an action to enforce the contract
22.A contract of sale is not a: D
a.    Principal contract
b.    Nominate contract
c.    Consensual contract
d.    Real contract
23.D insured his house against fire with C insurance company. The insurance
policy which was prepared and printed by C insurance company was signed by
D after reading its terms. You are to determine which of the following
characterize the contract between D and C insurance company. B
I.    Auto-contract
II.    Contract of adhesion
III.    Aleatory contract
IV.    Nominate contract
The contract between D and C insurance company is:
a.    I, II and III
b.    II, III and IV
c.    I, II and IV
d.    I, III and IV
24.Which of the following contracts is rescissible? C
a.    Contracts entered into during a hypnotic spell
b.    Contracts entered into in a  state of drunkenness
c.    Contracts entered into to defraud creditors when the latter cannot collect
the claims due them
d.    Contracts where both parties are incapable of giving consent
25.P is a minister of a certain church whose members include X. X regularly
confides in P because of his many personal problems. P is interested in buying
the lot of X and uses his position as elder of the church and confidant of X to
convince X to sell to him the lot. Should X sell the lot to P by reason of P
taking advantage of his confidential relationship with X, the contract between
them would likely be voidable because of: B
a.    Intimidation
b.    Undue influence
c.    Fraud
d.    Mistake
26.B bought a baby boy from S. B knew that the baby boy was his illegitimate son
by a woman named W and which W sold to S. the contract between B and S is:
B
a.    Valid
b.    Void
c.    Unenforceable
d.    Voidable
27.D, out of love and affection for C, donated a parcel of land to the latter who
accepted it. The formalities required by law were complied with. The contract
between D and C is: B
a.    An onerous contract
b.    A gratuitous contract
c.    A remuneratory contract
d.    An accessory contract
28.Which of the following contracts is valid and unenforceable? C
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 ring worth P450.00 between an insane and a
minor
29.Which of the following contracts is valid and enforceable? B
a.    A contract where a party gave his consent in a moment of drunkenness
b.    A contract where a party gave his consent because the other party
threatened to sue him for an unpaid debt
c.    A contract where a party gave his consent because the other party
threatened to kill the first party’s spouse
d.    A contract where there was inadequate cause attended by mistake
30.Which of the following contracts is valid and enforceable? C
a.    A written contract for the purchase of a new-born baby who is the
illegitimate child of the buyer
b.    A written contract of employment where the employee agreed voluntarily
not to demand overtime payment for work rendered in excess of the regular
hours of work per day
c.    An oral contract for the sale of a piece of land for P50,000.00 with the
buyer giving a down payment of P20,000.00
d.    An oral contract where the fruits of an immovable belonging to the debtor
are to be applied to the interest and principal of his obligation
31.Which of the following contracts involving real property is valid and
enforceable although not in writing? C
a.    Sale of piece of land for P50,000.00
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 P50,000.00
32.An insurance policy which, in practice, is prepared by an insurance company
and all the insured has to do is to sign thereon if he agrees with its terms, is an
example of: B
a.    An auto-contract
b.    A contract of adhesion
c.    A commutative contract
d.    A gratuitous contract
33.Which of the following statements is true as regards a void contract? D
a.    A void contract is ratified by the acceptance by a party to the contract of a
benefit under its terms
b.    The right to set up the defense of illegality of a void contract may be
waived if the illegality is not raised within a reasonable time
 c.    If there is a novation of a void contract, such novation is valid provided the
new contract is valid
d.    The right to set up the defense of illegality of a void contract does not
prescribe
34.It is a contract by virtue of the terms of which the parties thereto promise and
obligate themselves to enter into another contract at a future time, upon the
happening of certain events, or the fulfilment of certain conditions. B
a.    Contract of adhesion
b.    Contract of option
c.    Contract of sale
d.    Auto-contract
35.D obtained a loan from C amounting to P200,000.00. To secure the loan, D
mortgaged his lot.  C registered with the Register of Deeds. Later, D sold the
lot to X who was not aware that the lot was mortgaged. On the due date of the
loan, C demanded payment but D could not pay. Accordingly, C decided to
foreclose the mortgage on the lot. X, however, opposed the foreclosure
claiming that he was not bound by the mortgage since he was not a party
thereto. A
a.    X was bound by the mortgage although he was not aware of it because the
same is registered
b.    X was not bound by the mortgage because he was not a party thereto
c.    Only D and C were bound by the mortgage contract because they were the
only parties thereto
d.    X was not bound by the mortgage because he was not aware of it
36.The following are the essential elements of a consensual contract, except:C
a.    Consent of the contracting parties
b.    Object certain which is the subject matter of the contract
c.    Delivery of the object of the contract
d.    Cause of the contract which must be established
37.An insurance contract is: C
a.    An aleatory contract
b.    A contract of adhesion
c.    Both (a) and (b)
d.    Neither (a) nor (b)
38.P, the owner of a business, appointed A as his agent to manage it. P authorized
A to borrow money for the business. A himself is the one who lends the money
at the current rate of interest. Thus, in the said contract of loan, A enters into
the contract in his own behalf as lender and represents P as borrower. The
contract of loan in such a case is considered as: A
a.    An auto-contract
b.    An aleatory contract
c.    A remuneratory contract
d.    A gratuitous contract
39.Sermonia agri-products, a supplier of ZZ fertilizer, offered in writing to sell to
Barbados farms, 50 bags of fertilizer at the price of P100.00 per bag. The offer
stated that the price would be good for one week during which Barbados farms
may decide to accept the offer. Three days later and before Barbados could
make any acceptance, the general market price went up. Sermonia attempted to
revoke the offer by informing Barbados, but Barbados claimed sermonia could
not do so. A
a.    Sermonia may withdraw the offer just informing Barbados since there has
not yet been any acceptance thereof
b.    Sermonia may not withdraw the offer since the one-week period within
which Barbados may decide had not yet lapsed
c.    Sermonia may withdraw the offer only after the expiration of the one-week
 period, unless Barbados in the meantime has accepted the offer
d.    Sermonia may withdraw the offer because it would suffer a loss if the sale
was allowed to push through
40.P, the owner of a certain business, instructed A, his agent and manager of the
business to buy goods on credit from S. s issued a sales invoice where A
acknowledged the receipt of the goods by signing thereon. P called S by phone
and promised to S that he (P) would pay for the goods on due date. S was not
paid on due date. Accordingly, he sued P for the price of the goods. P raised the
defense of unenforceability under the Statute of Frauds claiming that a
representation as to credit must be in writing. A
a.    The promise is enforceable against P although it was not in writing
b.    The promise is unenforceable against P because it was not in writing
c.    The promise is enforceable against A because it was he who signed the
invoice
d.    The promise may be enforced both against P and A since they are the
debtors in the transaction
41.Which of the following does not apply to a relatively simulated contract? B
a.    The parties are bound by their real agreement
b.    The parties are not bound at all
c.    The parties are bound by their ostensible agreement if the real agreement
prejudices third persons
d.    The parties are bound by their ostensible agreement if the real agreement is
contrary to law, morals, good customs, public order, and public policy
42.When a physician who takes improper advantage of his power over the will of
his patient in order to get the latter’s consent to a contract between the two of
them, the contract will: C
a.    Likely be voidable because of intimidation
b.    Still be valid because the patient is merely returning the favour to his
physician who takes care of his health
c.    Likely be voidable because of undue influence
d.    Be void because of unlawful service
43.Which of the following contracts is not a void contract? C
a.    A contract of sale of an animal suffering from a contagious disease
b.    A purchase of an illegitimate child by one who is the father of the child
c.    A contract of insurance whereby the insured asked another to take his place
during the medical examination
d.    A contract between F, a Filipino and A, an alien, for the purchase of the
right kidney of F for P200,000.00
44.An aleatory contract is one: A
a.    The fulfilment of which depends upon chance
b.    The parties of which are obliged to perform reciprocal prestations
c.    Where only one party actually and physically enters into the contract
d.    Where delivery of the object is required to be made for his perfection
45.Zenith Cars Corporation (Zenith) engaged the services of Stronghold
Construction Corporation (Stronghold) for the construction of its showroom.
For this purpose, Stronghold bought construction materials on a 60-day credit
from Durable Materials Corporation (Durable). On due date, Durable
demanded payment from Stronghold but the latter contended that it could not
make any payment because it has not yet collected from Zenith. In this case:
A
a.    Durable can hold liable Stronghold only
b.    Durable can hold liable Zenith only
c.    Durable can hold liable both Stronghold and Zenith
d.    Durable cannot hold liable neither Stronghold nor Zenith
46.Erwin applied for insurance with ABC Insurance Company. The application
required Erwin to undertake a physical examination. However, since Erwin was
suffering from asthma, he requested Edwin, his identical twin brother who was
very healthy, to go through the physical examination and pretend that he was
Edwin. ABC Insurance Company thus approved the insurance policy believing
that Erwin had a clean bill of health. A
a.    The fraud employed was dolo casuante
b.    The fraud employed was dolo incidente
c.    The fraud committed is fraud in performance
d.    There was no fraud or misinterpretation at all because Edwin is considered
as an agent of Erwin 
47.The insurance policy (contract) in no. 46 is: B
a.    Valid 
b.    Voidable
c.    Rescissible
d.    Void
48.A  contract of pledge is perfected upon the: B
a.    Meeting of minds of the parties
b.    Delivery of the object of the contract
c.    Execution of the written agreement by the parties
d.    Acknowledgement by the parties of the instrument evidencing the contract
before a notary public
49.It refers to a contract wherein one party imposes a ready-made form of contract,
which the other may accept or reject, but which the latter cannot modify. B
a.    Aleatory contract
b.    Contract of adhesion
c.    Auto-contract
d.    Innominate contract
50.Rescission is different from annulment in that rescission: D
a.    Is a principal action
b.    May be availed of only by the parties whether bound principally or
subsidiarily
c.    Is brought to declare the inefficacy inherent in the contract
d.    Is based on lesion or damage
51.Unless the law or the stipulations of the parties require another standard of care,
every person obliged to give something is also obliged to take care of it with:
C
a.    Extra-ordinary diligence
b.    Diligence of a father of a good family
c.    Diligence of a good father of a family
d.    Good diligence of a father of a family
52.This refers to delay on the part of the creditor. D
a.    Mora solvendi ex re
b.    Compensatio morae
c.    Mora solvendi ex personae
d.    Mora accipiendi
53.One of the following obligations is not immediately demandable. D
a.    Pure  obligation
b.    Obligation with a resolutory condition
c.    Obligation with an in diem period
d.    Obligation with an ex die period
54.The debtor shall lose the right to make use of the period in the following cases,
except when he: D
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 any guaranty or security to the creditor
55.A, B, C, and D, joint debtors, are obliged to give V, W, X, Y, and Z, solidary
creditors, P20,000.00. C
a.    V may collect from B P20,000.00
b.    V may collect from B P4,000.00
c.    V may collect from B P5,000.00
d.    V may collect from B P1,000.00
56.In obligations with a penal clause, the creditor as a rule may recover from the
debtor in case of breach the following: D
a.    The penalty as agreed upon, plus damages and interest
b.    The penalty and damages
c.    The penalty and interest
d.    Only the penalty
57.B borrowed from XYZ bank P2,000,000.00 payable at the end of 5 years.
Before maturity, an extraordinary deflation supervened causing the value of the
debt to rise to P5,000,000.00 on the date of maturity. On due date, B must pay
XYZ bank: C
a.    P2,000,000.00
b.    P5,000,000.00
c.    P800,000.00
d.    P20,000,000.00
58.Consignation alone without any tender of payment is sufficient in the following
cases, except: B
a.    When the creditor is absent or unknown or does not appear at the place of
payment
b.    When the creditor represents the title to the obligation for collection 
c.    When without just cause, the creditor refuses to give a receipt
d.    When two or more persons claim the same right to collect 
59.D owes C P10,000.00 with G as guarantor. C, on the other hand, owes D,
P8,000.00. Both debts are already due but D is insolvent. In this case: B
a.    C may collect from G P10,000.00
b.    C may collect from G P2,000.00 because a guarantor can set up
compensation as regards what the creditor owes the principal debtor.
c.    C may collect nothing form G  because D is insolvent
d.    C may collect P8,000.00 form G
60.On July 1, 2015, D obliged himself to give C P50,000.00 if C will marry X on
or before December 31, 2015. The condition of the obligation is a: A
a.    Positive condition
b.    Negative condition
c.    Joint condition
d.    Impossible condition
61.D owes C P6,000.00. No date for payment was stipulated by the parties. B
a.    C cannot require D to pay because there is no date for payment
b.    C can require D to pay at anytime
c.    D is not liable to C because the obligation is void there being no date of
payment
d.    D is not required to pay unless C goes to court and asks the court to fix a
period for the payment
62.Legal compensation shall not be proper in three of the following cases. Which
is the exception? D
a.    Commodatum
b.    Civil liability arising from a criminal offense
 c.    Gratuitous support
d.    Bank deposit
63.A, B, and C are solidarily liable to X for P30,000.00. A pays X the whole
amount due. C, however, is insolvent. C
a.    A alone will bear the share of C who is insolvent since he (A) made the
payment
b.    A can collect from B P10,000.00
c.    A can collect from B P15,000.00
d.    A can demand a refund of P10,000.00 from X pertaining to C’s share since
C is insolvent
64.D is indebted to C for P20,000.00 which is due on June 10. C owes D
P15,000.00 which is due on June 5. On June 8, C assigned his credit rights to T.
D gave his consent to the assignment but did not reserve his right to the
compensation. On June 10, how much may T collect from D? A
a.    P20,000.00
b.    P15,000.00
c.    P5,000.00
d.    Nothing
65.The return of what has been paid by mistake is known as: A
a.    Solutio indebiti
b.    Negotiorum gestio
c.    Quasi-delict
d.    Natural obligation
66.One of the following obligations is not demandable at once. Which is it? D
a.    D to give his car to C. No date was fixed by the parties for the date of
delivery
b.    D to give his car to C until C completes his course in BS Accountancy
c.    D to give his car to C until X dies
d.    D to give C his car should C enroll in BS Accountancy
67.D promised to give C 10 sacks of rice when X, C’s father, dies. The obligation
of D to C is: C
a.    An obligation with a suspensive condition
b.    An obligation with a resolutory condition
c.    An obligation with a period
d.    A pure obligation
68.The right of C before the delivery, on one hand, and his right after the delivery,
on the other hand, of the agricultural land and its fruits, to him are referred to
as:  A
a.    Personal right and real right, respectively
b.    Real right and personal right, respectively
c.    Both are considered a personal right
d.    Both are considered a real right
69.When the debtor and the creditor agree to a dacion en pago (transfer of
ownership of property to the creditor to settle a monetary obligation), before
such transfer of ownership, there is actually a: D
a.    Compensation 
b.    Confusion
c.    Condonation
d.    Novation
70.Alternative obligation and facultative obligation are similar in which of the
following respects? D
a.    The right of choice may be given either to the debtor or creditor
b.    Several prestations are due
c.    Only one prestation is due but the debtor may render another in substitution
 d.    The obligation becomes a simple obligation once the choice of the
prestation is made and communicated
71.D owes C the following debts: P3,000.00 due on August 10; P3,000.00 due on
August 15; P3,000.00 due on August 20; and P3,000.00 due on August 25
which is secured by pledge of D’s ring. If today is August 22, and D pays C
P3,000.00 with neither D nor C designating the debt to which the payment shall
apply, the payment shall be applied: B
a.    To the debt due on August 10, following the first-due, first-pay basis
b.    To the debts due on August 10, August 15, and August 20, proportionately
at P1,000.00 each
c.    To the debt due on August 25, since it is the most onerous to D
d.    To all the debts proportionately at P750.00 each
72.Which of the following obligations is a pure obligation and is demandable at
once? C
a.    D to allow C to use D’s car until December 31, 2015
b.    D to allow C to use D’s car until C finishes his course in accounting
c.    D to give C his car. No mention is made when D shall give the car
d.    D to give C a car if C finishes his course in accounting
73.D borrowed P100,000.00 from C. the parties agreed at the time  the obligation
was constituted that should D so desire, he may give his agricultural land to C
by way of dacion en pago to pay his loan obligation on due date. The obligation
of D to C is: D
a.    A conjunctive obligation
b.    A simple obligation
c.    An alternative obligation
d.    A facultative obligation
74.D obtained a loan from C in the amount of P50,000.00. Unable to give cash on
due date in payment of his loan obligation, D proposed to C that he would be
giving instead his diamond ring to settle his debt. C agreed and accepted the
ring from D. the new agreement between D and C involved both: B
a.    Novation and application of payment
b.    Novation and dacion en pago
c.    Compensation and payment by cession
d.    Confusion and tender of payment
75.A, B, and C are liable in solidum to X for P12,000.00 X renounced the share  of
A who accepted it. Later, B becomes insolvent. A
a.    X can collect from C P8,000.00
b.    X can collect from C P4,000.00
c.    X can collect from C P12,000.00
d.    X can collect nothing from C
76.D owes C P20,000.00 due on March 15. C, on the other hand, owes D the
following debts: P8,000.00 due on March 1, P3,000.00 due on March 8,
P5,000.00 due on March 14. On March 12, C assigned his right to T with notice
to D but with D not giving his consent to the assignment. On March 15, T can
collect from D: B
a.    P20,000.00
b.    P9,000.00
c.    P4,000.00
d.    None, because the assignment made by C was without the consent of D
77.A, B, and C are solidary debtors of X, Y, and Z. solidary creditors, in the
amount of P2,700.00. X renounces the whole obligation without the consent of
Y and Z. The debtors accepted he renunciation. A
a.    The whole obligation is extinguished
b.    Only P900.00 is extinguished
c.    No part of the obligation is extinguished because not all the creditors
 consented to the renunciation
d.    Only P300.00 is extinguished
78.A, B, and C are obliged to deliver a specific horse to X, Y, and Z.  C
a.    A demand made by X against A, B, and C is a valid demand against all the
debtors
b.    A demand made by X, Y, and Z against A is a valid demand against all the
debtors
c.    If a valid demand is made against all the debtors but debtor C cannot
comply with his part of the obligation, the obligation is converted into a
monetary obligation to pay the value of the horse plus damages
d.    If the debtors default in their obligation because C is insolvent, A and B
will be liable for C’s share of the obligation
79.The following are characteristics of a facultative  obligation, except: C
a.    Only one thing is principally due
b.    The right of choice cannot be given to the creditor
c.    The debtor must give the substitute in case the principal thing is lost due to
the debtor’s fault before substitution
d.    If the principal is void, the debtor is not obliged to give the substitute
80.Dacion en pago and payment by cession are special forms of payment. They are
similar in which of the following respects? C
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 obligation/s
81.When two persons are claiming the same right to collect from you and you are
in doubt as to whom you will give your payment, your remedy so that you will
not pay to the wrong person is: D
a.    Tender of payment
b.    Application of payment
c.    Dacion en pago
d.    Consignation
82.D borrowed P50,000.00 from C. On due date, D did not have any money to pay
the debt so he proposed to C that the latter accept a ring to settle the debt. C
accepted the proposal and received the ring. Immediately after receiving the
ring, C sold it to B. D’s obligation to give P50,000.00 to C is extinguished by:
A
a.    Dacion en pago
b.    Payment by cession
c.    Sale
d.    Application of payment
83.D, professional singer, agreed to sing for a fee of P20,000.00  at the birthday
party of C who was a fan of D. due to numerous commitments, D could not go
to the party of C. He sent X, another professional singer who was known to
sing better than D, to sing at C’s party, and informed C that the latter needed to
pay only P10,000.00 C
a.    D may validly assign his obligation to sing because the reduced fee was
advantageous to C
b.    D may validly assign his obligation to sing because X could perform the
obligation better than him
c.    D may not validly assign his obligation to sing because it is personal in
nature
d.    C cannot refuse the performance of the obligation by X because the
obligation to sing is transmissible since it would not require much effort on the
part of either D or X who both are professional singers
84.One peso, P5.00, and P10.00 coins are legal tender up to: C
a.    P100.00
b.    P500.00
c.    P1,000.00
d.    Any amount
85.D obtained a loan of 5,000.00 from C. On due date, D tendered payment
amounting to P5,000.00 consisting of P5,000 pieces of P1.00 coin D
a.    The payment offered by D is legal tender
b.    C may not refuse to accept the payment
c.    Should C refuse to accept the payment, D may resort to consignation
(deposit of the payment in court)
d.    C may demand that he be paid in bills
86.A, an agent of P, owes B P20,000.00. B, on the other hand, owes P,
P20,000.00. both debts are due.  D
a.    P may claim legal compensation
b.    A may claim legal compensation
c.    B may claim legal compensation
d.    Neither P, A nor B may claim legal compensation
87.The kind of fraud which renders a contract voidable is: A
a.    Causal fraud
b.    Incidental fraud
c.    Fraud in performance
d.    Future fraud
88.D promised to give P20,000.00 to C provided C does not sign a contract with X
on or before December 31, 2014. The condition of the obligation is: A
a.    Negative
b.    Positive
c.    Impossible
d.    No condition exists
89.The delivery of promissory notes payable to order or other bills of exchange or
other mercantile documents shall produce the effect of payment when they are:
B
a.    Delivered
b.    Cashed
c.    Have been impaired through the fault of the debtor
d.    Deposited in bank
90.The following statements concerning payment by cession are true, except: A
a.    The creditors become the owners of the properties of the debtor that were
ceded to them
b.    Payment by cession extinguishes the obligations only to the extent covered
by the proceeds of the proceeds of the sale of the debtor’s properties
c.    The debtor must be insolvent
d.    It affects all the properties of the debtor except those exempt from
execution
91.In order that condonation may extinguish an obligation involving a movable
property whose value exceeds P5,000.00 A
a.    It is sufficient that the condonation and acceptance are in writing, even a
private one
b.    It is required that the condonation and acceptance must be in public
instrument
c.    The delivery of the document evidencing the debt is sufficient since the
property is movable
d.    The condonation and acceptance may be made orally
92.D owes C P50,000.00. Subsequently, D proposed to C that T will assume his
(D’s) debt. C accepted the proposal of D. this type of novation which involves
 the substitution of the debtor is known as: A
a.    Delegacion
b.    Expromision
c.    Objective novation
d.    Subrogation
93.A, 17 years old, B, 25, and C, 30, jointly borrowed P6,000.00 from X. How
much may X collect from B? C
a.    P6,000.00
b.    P4,000.00
c.    P2,000.00
d.    Nothing, because A was a minor at the time the obligation was constituted
94.A, B, and C are jointly liable to X in the amount of P12,000.00. On due date, X
demanded payment from A but A refused to pay. How much may X collect
from B? D
a.    P12,000.00 plus damages for delay
b.    P8,000.00 plus damages for delay
c.    P4,000.00 plus damages for delay
d.    P4,000.00 without any damages
95.The following obligations are demandable at once, except: A
a.    An obligation with a condition antecedent
b.    An obligation without any term or condition
c.    An obligation with an in diem period
d.    An obligation with a condition not to do an impossible thing
96.D is obliged to give object 1, object 2, or object 3 to C. The right of choice as to
which object will be delivered to C belongs to: A
a.    Both the parties
b.    D only
c.    C only
d.    Neither of the parties
97.If there is a concurrence of two or more creditors and/or two or more debtors in
one and the same obligation, the obligation is presumed to be: D
a.    Individual and collective
b.    Solidary
c.    Joint and several
d.    Joint
98.D borrowed P50,000.00 from C. Not having sufficient cash to pay the debt, D
proposed to pay the debt by giving his diamond ring. C accepted the proposal
and received the ring. C
a.    D’s obligation is extinguished by payment by cession
b.    D’s obligation is extinguished by consignation 
c.    D’s obligation is extinguished by dacion en pago
d.    D’s obligation is not extinguished at all because the payment should have
been in cash
99.M obtained a loan of P50,000.00 from P. The loan is evidenced by promissory
note executed by M with G signing as a guarantor of the debt. P assigns the
note to A, A to B, B to C, and C to G. The assignment of the note to G
extinguished C
a.    Both the loan and the guaranty
b.    Only the loan 
c.    Only the guaranty
d.    Neither the loan nor the guaranty with G now as the new creditor
100. The principle of negotiorum gestio does not apply: C
a.    When the property or business is not neglected or abandoned
b.    When the officious manager has been tacitly authorized by the owner
 c.    In both (a) and (b)
d.    In neither (a) nor (b)
101. The following are the elements of an obligations EXCEPT: A
a.    Efficient tie
b.    Obligor
c.    Prestation
d.    Vinculum Juris
102. The following are the sources of an obligation EXCEPT: A
a.    Acts or Omissions not punishable by Law
b.    Quasi-delicts
c.    Contracts
d.    Law
103. _________________ is a thing which can be physically segregated from
all others of the same class or genus.  B
a.    Generic thing
b.    Specific thing
c.    Determinable thing
d.    None of these
104. 4.    The following are the grounds for the liability for damages
EXCEPT:  B
a.    Mora
b.    Contravention of the parties
c.    Contravention of the tenor of the obligation
d.    Dolo
105. 5.    The following are the requisites of legal delay EXCEPT:   D
a.    The debtor does not perform the obligation
b.    The obligation is demandable and already liquidated
c.    The debtor fails to comply with such demand
d.    None of the these
106. The following are instances when a person can be liable even with the
existence of a fortuitous event EXCEPT:  A
a.    When time is of the essence
b.    When stipulated by the parties
c.    When the law expressly provides
d.    None of the these
107. The following are the exceptions to the transmissibility of rights of an
obligation EXCEPT:   D
a.    The right by nature is not transmissible
b.    The parties agreed against transmission
c.    Law prohibits the transmission
d.    None of these
108.  I. A pure obligation is not demandable at once.    A
           II. A Condition is always future and uncertain.
          III. A potestative condition that depends solely on the will of the active
subject is void.
a.    All statements are false
b.    All statements are true
c.    Only III is true
d.    II and III are true
109. I. The happening of a resolutory condition gives rise to the obligation.   
A
II. A mixed condition depends partly upon chance and partly upon the will of a
third person.
a.    Only II is true
b.    Only I is true
 c.    All statements are false
d.    All statements are true
110. I. The effect of the fulfilment of the suspensive condition always
retroacts to the day of the constitution of the obligation.      B
II. The condition is deemed fulfilled if the creditor voluntarily prevents the
fulfilment of the condition.
III. The obligation is extinguished if the thing is lost without the debtor’s fault.
a.    All statements are true
b.    All statements are false
c.    Only III is true
d.    Only II is true
111.
1st Statement: When a fortuitous event concurs with a person’s negligence
resulting to a loss, he is still liable.    C
2nd Statement: The creditor has a right to the fruits of the thing from the time
ownership is transferred.
a.    Both statements are correct.    c.  Only the first is correct.
b.    Both statements are false.    d.  Only the second is correct.
112. A obliged himself to deliver to his dog, his cow, his carabao, his
elephant or his crocodile. The first two were lost due to fortuitous event and the
last three lost due to A’s fault. What is A’s obligation if choice belongs to the
creditor?   D
a.    Creditor, B may convert to cash any of them plus damages
b.    Debtor A may convert to cash the value of the last one lost plus damages
c.    A may rescind the contract plus damages
d.    Creditor, B may convert to cash any of the last three plus damages
113. A obliged himself to deliver to B his cellphone or as a substitute he may
deliver his cute kitten. After substitution was made, the former was lost due to
A’s fault     C
a.    A is liable and must pay damages
b.    A will simply deliver his cute kitten plus damages for the loss of the
cellphone
c.    The loss has no effect to the obligation, obligation to deliver the latter will
subsist
d.    Obligation was extinguished
114. A and B jointly owe C P50,000; they issued a promissory note in favor
of C. C endorsed it to D, D endorsed it to E then endorsed it back to A who is
also E’s creditor in the amount of P50,000.    A
a.    The obligation is partially extinguished by merger
b.    The obligation is extinguished and A cannot recover any amount from B
c.    The obligation is extinguished but A can recover the share of B which is
P25,000
d.    The obligation is partially extinguished by compensation
115. Rose obliged herself to give Jack 1 dozen of eggs on January 15, CY.
When the date arrived, Rose failed to deliver despite repeated demands from
Jack. Jack’s remedy is:   D

a.    Compel Rose to deliver eggs plus damages

b.    Compel Rose to pay the amount of the eggs
c.    Rescind the contract
d.    Ask a 3rd person to deliver the eggs to him but chargeable to Rose

116. Mary obliged herself to give to John her BMW car on October 10, CY
but she failed to deliver on that date. On the following day, a lightning
completely destroyed the car.    B
 a.    Mary is still liable for she is in default already
b.    Mary is no longer liable there being no demand , there is no delay and the
thing is lost due to fortuitous event
c.    John can demand for a substitute
d.    Mary is still liable even if she is in default
117. One is a correct distinction between solidarity and indivisibility.   A
a.    Solidarity refers to the legal tie whereas indivisibility refers to prestation
b.    Plurality of subject is indispensable in indivisibility
c.    In case of breach, solidarity character of obligation is terminated, but the
indivisible character of the obligation remains
d.    Solidarity refers to the parties of the obligation and the prestation whereas
indivisibility refers to the vinculum juris
118. Sale on approval is a sale subject to:    A
a.   Suspensive Condition    c.   Potestative resolutory
b.   Potestative suspensive    d.   Resolutory Condition
119. Here, consignation alone is enough to produce payment except:    C
a.    If the creditor is unknown 
b.    Creditor is incapacitated
c.       Creditor is reluctant to issue receipt
d.    Two or more persons claim to be creditors

MULTIPLE CHOICE

120. Which of the following is correct?   B

a.    An action for rescission of contract prescribes in five (5) years counted
from the execution of the contract
b.    An action to declare contract void is not subject to prescription
c.       An action for annulment of contract is imprescriptible
d.    An action to enforce judicially a natural obligation prescribes in 4 years
121. The following contracts should observe Statute of Frauds, except:   C
a.    Lease of real property longer than one year
b.    Representation as to the credit of a third person
c.       Limited partnership not notarized
d.    Prenuptial agreement
122. S makes an offer to B on January 12, CY. B makes known his
acceptance in a letter sent on January 2, and received by S on January 10.
Meantime, on January 5, S becomes insane.    B
a.    The contract is not binding under manifestation theory.
b.    The contract is not binding under expedition theory.
c.       There is already a meeting of minds, the contract is perfected
d.    The contract is voidable because one party is insane.
123. Which of the following can be considered as feature of a void contract? 
D
a.    Subject to ratification
b.    They exist
c.       Action or defense for nullity is subject to prescription
d.    Defense cannot be waived
124. In three of the following defective contracts, ratification cleanses the
defects. Which is the exception?   B
a.    Contracts entered into by a person who has been given no authority
b.    Sale of a piece of land thru an agent, the authority is oral
c.       Sale of immovable property or interest orally entered into 
d.    Special Power of Attorney involving novation but not notarized
125. S, a minor, owns a specific property valued P 50,000. B, capacitated, by
means of fraud induced S to sell his property to him (B) for P 10,000 which S
 did so. The contract is in writing.    D
a.    The contract is void
b.    The contract is rescissible because the ward suffered lesion by more than ¼
of the value
c.       The contract remains unenforeceable because it falls under the Statute of
Frauds
d.    The contract is anullable
126. Type of defective contract that creates no rights and impose no
obligation, but are susceptible of ratification.   C
a.    Void contracts         
b.    Rescissible contracts
c.       Unenforceable contracts
d.    Voidable contracts
127. The representative of an absentee sells a house and lot belonging to the
latter valued at P2M for P500,000 with court approval. The contract is:   D
a.    Rescissible    c.  Voidable
b.    Unenforceable    d.  Valid

128. Example No. 1: Donation by an insolvent debtor.    D

      Example No. 2: Sale of shares of stocks in violation of preemptive right.
a.    Voidable; Rescissible
b.    Rescissible; voidable
c.       No. 1 is rescissible; while No.2 is unenforceable
d.    Both are rescissible
129. Which of the following contracts cannot be ratified?   A
a.    Those whose cause or object did not exist at the time of the transaction
b.    Unauthorized contracts
c.       Those where both parties are incapable of giving consent
d.    Those that fail to comply with the Statute of Fraud
130. On October 4, CY, A is indebted to B for P50,000 for a 20-day period. A
proposed to B that X will pay A’s debt and that A will be free from all
liabilities. B and X agree to the proposal. On October 25, CY, X became
insolvent. At the time of delegation, X was already insolvent but this was not
known to A. The insolvency is not public knowledge. So B sues A on the
ground that it was A who made then proposal that A guaranteed X’s solvency.
Decide.    B
a.    A is liable because he is presumed to have guaranteed X’s solvency.
b.    A is not liable because he does not know the insolvency of X at the time of
delegation and neither was the insolvency of public knowledge.
c.       A is liable because he did not exercise due diligence in determining the
insolvency of X.
d.    A is liable because X agree to the proposal to make himself solidarity
liable for the obligation.
131. When the thing deteriorates pending the fulfillment of the suspensive
condition without the fault of the debtor, the impairment is:    D
a.    To borne by the party who caused the deterioration
b.    To be borne partly by the debtor and partly by the creditor
c.       To be borne by the debtor
d.    To be borne by creditor
132. X enters into a contract with Y whereby X sold his land orally to Y. The
land has been delivered and the money has been paid. Decide.    A
a.    The contract fully enforceable.
b.    The contract is unenforeceable
 c.       The contract is not valid because the contract is not made in public
instrument
d.    The contract is not valid because it is not in writing as required by the
Statute of Fraud
133. On September 1, CY, A entered into a contract with B whereby A sells
to B 5,000 sacks of sugar to be delivered on the 15th and to be paid in full on
the 30th. There was no agreement for rescission based on prepayment. A did
not deliver on the 15th but on the 30th, he was willing and offering to deliver
but B did not make payment on said date and so A did not like it and refused to
make delivery. Which is incorrect?   D
a.    A cannot rescind the contract for nonpayment of the price
b.    A cannot refuse to deliver the goods
c.       B is not entitled to recover damages
d.    A can rescind the contract for nonpayment of the price since B is at fault
134. A has a daughter, B; X has a son, Y. A, B, X and Y agree together that Y
will marry B. The agreement is oral. If B later on refuses to marry Y who spent
for the necessary wedding preparations, X and Y decided to bring an action
against A and B, will the action prosper? Decide.    C
a.    Between Y and B, the action will prosper because the agreement is made
orally.
b.    In case of A and X, the action will prosper because the agreement which
was made orally in enforceable as it is based in the consideration of marriage.
c.       As to A and X, the action will not prosper because the agreement is not
enforceable as it was not they who mutually promised to marry each other.
d.    The action of X and Y against A and B will prosper because the agreement
is based on the consideration of marriage other than mutual promise to marry.
135. D1, D2 and D3 borrowed from C P300,000 as a security, he mortgaged
their undivided agricultural land to C, Subsequently, D1 paid C P100,000. Is
the mortgage on D1’s share of the land extinguished?    A
a.    No, because mortgages are considered indivisible, payment in part shall not
extinguish the obligation secured by the mortgage.
b.    No. because the obligation is solidary, payment in part shall not extinguish
the obligation secured by the mortgage.
c.       Yes, the obligation of the debtors is joint, D1 is answerable only for
P100,000.
d.    Yes, because the obligation of D1 on the debt is only P100,000.
136. B called up S by telephone, to sell his parcel of land. The land was
purchased by X, but S did not forward the money to B. Now B wants to recover
the parcel of land. Decide.    B
a.    B cannot recover because the sale is valid
b.    B can recover because the sale between S and X is void
c.       B can recover only if B can return the money paid by X to S
d.    The sale is voidable
137. D pledged his ring to C for P100,000. D failed to pay his obligation on
time. C sold it at public auction for P8,000.    B
a.    C can recover die deficiency even without stipulation
b.    C cannot recover the deficiency even there is a stipulation
c.       C cannot recover the deficiency
d.    C can recover the deficiency
138. In novation which of the following is incorrect?    D
a.    If the new obligation is void, original obligation shall subsist
b.    In expromission, the insolvency of the new debtor shall never revive, the
action of the creditor-against the original debtor
c.    If the original obligation is subject to a suspensive condition, the new
obligation is subject to the same condition unless stated
 d.    In Delegacion, insolvency of the new debtor will never revive the old
obligation.
139. A is obliged to give B his only car on September 1, CY. On the said
date, A did not deliver despite demand from B. On September 2, CY, an
earthquake completely destroyed the car. Is A still liable?    C
a.    No. Considering that no demand to deliver was made by B and the specific
thing was lost, due to fortuitous event, the obligation is extinguished.
b.    No. The obligation is extinguished, even if the debtor is already in default
because the debtor can plead impossibility of performance.
c.    Yes. A is already in legal delay, thus the obligation to deliver the lost
specific thing is converted into monetary claim for damages.
d.    Yes. The creditor can instead demand for a substitute of equivalent value
from the debtor.
140. A, B and C are solidary debtors of X for P9,000. Later, C paid X the
whole obligation. Which of the following is considered a false statement as to
the effects of C paying X the whole obligation      C
a.    C becomes a creditor for reimbursement
b.    After C paid X the whole obligation, the same is converted into a joint
obligation of reimbursement
c.    If the debtor A becomes insolvent C can collect from B P6,000
d.    None of the above
141. W, X, Y, Z solidarily liable to A, B, C, jointly creditors for P30,000.
How much can A and B collect from X?    C
a.    P10,000
b.    P2,500 only
c.    P20,000
d.    P30,000
142. On October 4, CY, A is indebted to B for P50,000 for a 20-day period. A
proposed to B that X will pay A’s debt and that A will be free from all
liabilities. B and X agree to the proposal. On October 25, CY, X became
insolvent. At the time of delegation, X was already insolvent but this was not
known to A. The insolvency is not public knowledge. So B sues A on the
ground that it was A who made the proposal that A guaranteed X’s solvency.
Decide.     B
a.    A is not liable anymore because of the principle of expromission.
b.    A is not liable anymore.
c.    A is liable because he did not exercise due diligence in determining the
insolvency of X.
d.    A is liable because X agreed to the proposal to make himself solidarity
liable for the obligation.
143. The minimum standard of care that person obliged to give something
must observe in the preservation of the specific thing subject matter of an
obligation.  A
a.    That diligence of a good father of a family
b.    That diligence which the parties have stipulated on
c.    That diligence which the law provides
d.    All of the above
144. One is incorrect about extinguishment of obligation   B
a.    Novation is not absolute but only a relative mode of extinguishment of an
obligation.
b.    Dacion en pago and payment by cession are governed by civil law.
c.    A stockholder may not compensate what he owes the corporation with his
present stockholdings.
d.    Loss of a determinate thing due to fortuitous event will exempt the debtor
 even if he stole it but he later offered to return and the owner refused to accept
without valid cause.
145. Which is incorrect about damages?   A
a.    Compensatory damages are also known as punitive damages.
b.    Actual damages require proof of accounting.
c.    In crimes and quasi delicts, obligor is liable for all damages which are
natural and probable consequences of the act or omission whether or not
foreseen.
d.    Indemnification for actual damages comprehends not only the value of the
loss but also the profits the obligee failed to obtain.
146. Manuel bought the Oppo phone of Jess for P15,000 by giving 50%
earnest money although delivery of the cell phone would be after 3 days later.
Before delivery however the cell phone was lost due to flood brought by
storm.    C
a.    Manuel can recover the P7,500 he paid to Jess
b.    Manuel may ask for another cell phone at no additional cost because Jess is
liable.
c.    Obligation of Jess to deliver is extinguished by the force majeure event and
Manuel cannot recover the amount paid.
d.    The contract of sale should be rescinded.
147. One is incorrect about elements of contracts:   C
a.    Absence of an essential element voids the contracts
b.    Absence of natural or accidental elements may result to rescission and
damages
c.    In policitation, there is meeting of meetings but contract is incomplete
hence needs reformation
d.    In stipulation, pour autrui consent or acceptance of the third person
involves is mandatory
148. All are essential characteristics of contracts except    D
a.    Relativity of contracts
b.    Obligatoriness of contracts
c.    Autonomy of contracts
d.    Uniformity of contracts 
149. Statement 1: The death, civil interdiction, insanity or insolvency of either
offeror or offeree before acceptance is conveyed makes the offer ineffective
Statement 2: The cause of a contract is the psychological or personal reason
whereas motive is the objective or juridical      C
a.    True; true
b.    False; false
c.    True; false
d.    False; true
150. The following contracts must appear in a public instrument except:    B
a.    Donation of immovable property
b.    Agency to sell land
c.    Partnership where immovable property or real rights are contributed
d.    When limited partnership is formed
151. 1st statement : Rescission of contracts and rescission or resolution of
reciprocal obligation are the same     C
2nd statement:  Prescription does not affect unauthorized contracts.
a.    True, True    c.    False, True
b.    False, False    d.    True, False
152. In void contract neither party may seek to enforce it, neither can they
seek the aid of law. But recovery can be made by the other party in the
following cases, except:     D
a.    The innocent party
 b.    The debtor who pays usurious interest
c.    The party rejecting the void contract before illegal purpose is accomplished
d.    In pari delicto parties
153. Which is most defective?    A
a.    Contracts entered into without authority
b.    One of the parties is a minor suffering lesion by more than ½ of the value
of his property
c.    Contracts entered by a debtor to defraud his creditor
d.    Contracts involving vitiated consent
154. In three of the following defective contracts, ratification cleanses the
defects. Which is the exception?     B
a.    Contracts entered into by a person who has been given no authority
b.    Sale of a piece of land thru an agent the authority is oral
c.     Sale of immovable property or interest orally entered into 
d.    Both parties are incapable of giving consent
155. Example No. 1: A 17 years old sold his car valued at P1M for P50,000
or a lesion by more than one-fourth of the value of the said house.
Example No. 2: G, guardian of W, sold W’s house valued at P50,000 for
P37,000.      A
a.    Voidable; Rescissible
b.    Rescissible; voidable
c.    No. 1 is rescissible; while No.2 is unenforceable
d.    Voidable; valid perfectly
156. The following contracts should observe Statute of Frauds, except:    C
a.    Lease of real property longer than one year
b.    Representation as to the credit of a third person
c.     Lease of a machine longer than one year
d.    Surety
157. Which of the following contracts cannot be ratified?    A
a.    Those involving future inheritance
b.    Unauthorized contracts
c.    Those where both parties are incapable of giving consent
d.    Those that fail to comply with the Statute of Fraud
158. All are incorrect about contracts except one    D
a.    Voidable contracts are also called validable contracts
b.    Stipulation pour autrui is an exception to mutuality of contracts
c.    Fraud in inducement is a ground to nullify a contract
d.    In voidable contracts defect is intrinsic, in rescission defect is extrinsic
159. Which of the following statement is false:    B
a.    In contract to sell, ownership is not transferred to the buyer even if there is
delivery
b.    Stoppage in transit can be exercised by unpaid seller if the buyer is
insolvent and the vendor has not yet parted with the thing sold
c.    The price is considered certain ifI it is in reference to another thing certain
d.    In a right to-resell it is not necessary that the original buyer is insolvent
160. B fraudulently induces S to sell to him (B) a masterpiece painting for
P10,000. Subsequently, B sold it to X for P12,000, a good faith purchaser. S is
entitled to
a.    Rescind the contract with B plus damages          C
b.    Recover the painting from X but no damages
c.    Recover damages from B
d.    Rescind the contract between B and X
161. Which of the following statements is true      D
a.    In a contract of sale the full payment of the price is in nature of suspensive
condition for the transfer of ownership of the thing sold
 b.    Sale or Return is a sale with suspensive condition.
c.    Emptio spei speretae is an absolute sale.
d.    Pacto de retro sale is a sale with resolutory condition.
162. S agreed to sell to B his land and B agreed to pay P10,000 if X will pass
the CPA Exams of 200A. X passed, Meantime, interest earned is P1,200, while
the fruits harvested is P2,000.    C
a.    S will deliver the land to B
b.    B will pay S the price of the sale
c.    Combination of A and B
d.    Combination of A and B, together with the fruits and interest
163. S owns a ring and sold it to B for P10,000. B paid S the price, but the
latter promised to deliver the ring to X in a public instrument and delivered the
ring to X. In a contract of pledge:     C
Statement 1: Between B and X the latter has got a better right, because the
contract of pledge appears in a public instrument and there was delivery.
Statement 2: Some case above, but done through a private instrument.
a.    Both statements are true
b.    Both statements are false
c.    No. 1 is true, No. 2 is false
d.    No. 1 is false, No. 2 is true
164. P wrote A authorizing A to sell a piece of land on his behalf. The land
was purchased by X but A kept the money. What can P do?   C
a.    P may refuse to surrender his land to X
b.    P may require X to pay the agreed price again
c.    P may recover the proceeds of the sale from A
d.    P may recover his land to X thru court action
165. D, as owner of specific car and a parcel of land, properly mortgage the
same to C to answer a principal obligation of P1 million. Later, D sold the same
land to W, while the car sold to Y without informing the creditor/mortgagee.   
D
Statement 1: The sale made to W is unenforceable, valid only if ratified
Statement 2: The car sold to Y is valid and enforceable  but D is liable
a.    Both statements are true
b.    Both statements are false
c.    No. 1 is true, No. 2 is false
d.    No. 1 is false, No. 2 is true
166. Statement 1: In a sale of goods, the fruits shall pertain to the vendee
from the day the goods are delivered to the vendee.
Statement 2: In case of loss or deterioration of improvement of the thing before
the arrival of the period term, the rules during the pendency for the condition in
conditional obligation shall be observed, the vendor being considered as the
debtor.    D
a.    Both statements are true
b.    Both statements are false
c.    No. 1 is true, No. 2 is false
d.    No. 1 is false, No. 2 is true
167. Example 1: S sold to B in a private instrumental his land. Later B wanted
to have the sale registered, but registration requires a public instrument. In here
B can compel S to execute the needed public instrument.
Example 2:  Same case above but it was orally made with partial payment later,
contract is still enforceable.    D
a.    Both examples are false
b.    Only No. 1 is true
c.    Only No. 2 is true
d.    Both examples are true
168. The Recto Law is not applicable    D
a.    Sale of car on straight term
b.    Sale of house on installment
c.    Sale of car on installment where the buyer constituted a mortgage on his
truck
d.    All of the above
169. Not a characteristic of mutuum/ commodatum:    D
a.    Bilateral contract
b.    Principal contract
c.    Gratuitous contract
d.    Consensual contract
170. Not a characteristic of pledge/ mortgages:   C
a.    Nominate contract
b.    Onerous contract
c.    Principal contract
d.    Bilateral contract
171. Not a characteristic of antichresis:    A
a.    Consensual contract
b.    Onerous contract
c.    Nominate contract
d.    Formal contract
172. Affidavit of good faith is required in this contract.    C
a.    Real estate mortgage
b.    Antichresis
c.    Chattel mortgage
d.    Pledge
173. In the following contracts, which is directly affected by Recto Law:     C
a.    Real estate mortgage
b.    Antichresis
c.    Chattel mortgage
d.    Pledge
174. D1, D2 and D3 borrowed from C P300,000 as a security, he mortgaged
their undivided agricultural land to C, Subsequently, D1 paid C P100,000. Is
the mortgage on D1’s share of the land extinguished?    A
a.    No, because mortgages are considered indivisible, payment in part shall not
extinguish the obligation secured by the mortgage.
b.    No. because the obligation is solidary, payment in part shall not extinguish
the obligation secured by the mortgage.
c.    Yes, the obligation of the debtors is joint, D1 is answerable only for
P100,000.
d.    Yes, because the obligation of D1 on the debt is only P100,000.
175. Statement 1: There can be a case of the mortgage appropriating for
himself the mortgaged object should the debtor/mortgagor fail to pay the
principal obligation.
Statement 2: A thing put up by way of pledge may be sold to another person
even without extinguishing the contract of pledge previously entered into by
the seller with his pledge creditor      D
a.    Both statements are true
b.    Both statements are false
c.    No. 1 is true; No. 2 is false
d.    No. 1 is false; No. 2 is true 
176. Which of the following statements is true     C
a.    If a principal appoints an agent in writing with respect to the sale of a piece
of land and the latter sold it to a buyer orally, the contract between the agent
and the buyer is void.
 b.    A contract of agency is generally gratuitous.
c.    To lease personal property to another person for more than one year does
not require a special power of attorney.
d.    The insolvency of the principal but not agent shall extinguish the agency.
177. D borrowed from C P10,000 and as security he pledged his ring to C. by
common agreement D remains in possession of the ring pledged, and a private
instrument was executed to that effect, on the date of maturity, D failed to pay,
which of the following statement is correct:    B
a.    D may go to a Notary Public and caused the sale of the ring because of
failure to pay the obligation
b.    There is no contract of pledge because the ring remains in the possession of
D
c.    The contract of pledge between D and C is not valid because it did not
appear in a public instrument
d.    The contract is unenforceable unless it will be ratified by the parties
178. A seller sold to a buyer a television set at a price of P20,000. At that time
the buyer has only P5,000 cash and he offered a diamond ring worth P15,000
which the seller accepted as payment of the price. The nature of the contract is 
A
a.    Sale
b.    Barter
c.    Partly sales and partly barter
d.    Commodatum
179. Statement 1: In sale or return, the risk of loss is on the vendor; In sale or
trial, the risk of loss is on the vendee.
Statement 2: In sale or return, ownership passes to the vendee upon the delivery
of the goods; in sale on trial, ownership does not pass to the vendee until he
accept the goods      D
a.    Both statements are true
b.    Both statements are false
c.    No. 1 is true; No. 2 is false
d.    No. 1 is false; No. 2 is true
180. Three of the following are considered elements of contract of pledge and
mortgage, which is the exception?    C
a.    Accessory contract
b.    Pledgor or mortgagor must be absolute owner
c.    Thing pledged may be appropriated if debtor cannot pay
d.    Pledgor or mortgagor must have a free disposal of the thing pledged
181. D mortgaged his car to C for P100,000. D failed to pay his obligation on
time. C foreclosed the mortgage and sold it at public auction for P80,000.  D
a.    C can recover the deficiency even without stipulation
b.    C cannot recover the deficiency even there is a stipulation
c.    C cannot recover the deficiency
d.    C can recover the deficiency
182. Statement 1: If the thing pledged is returned to the pledgor, the principal
obligation is extinguished.     B
Statement 2: A contract of pledge is consensual which is perfected from the
time the thing pledged is placed in the possession of the creditor, or of a third
person by common agreement.
a.    Both statements are true
b.    Both statements are false
c.    No. 1 is true; No. 2 is false
d.    No. 1 is false; No. 2 is true
183. Which of the following statements is incorrect?    A
a.    Warranty against hidden defect is a natural element
 b.    The seller need not be owner of the thing sold at the perfection of the sale
c.    There a may be a transfer of ownership over the thing even if the seller has
not delivered the thing sold to the buyer
d.    Warranty against eviction is waivable impliedly
184. S sold his car to B payable in ten (10) equal monthly installments and
with a mortgage constituted on the same property (car). For B’s failure to pay a
month’s installment, which statement is correct?    D
a.    S may foreclose the mortgage on B’s car but he no longer has the right to
recover the balance should it (the car) be sold for an amount lower than what he
claims from B.
b.    S may seek the cancellation of the sale made to B.
c.    S may seek the cancellation of the same and later on foreclose the
mortgage should he find it impossible to collect from B.
d.    S may seek fulfilment of the obligation of B to pay the amount due.
185. Araneta wrote a letter to Bascon wherein in he offered to sell a piece of
land. In Araneta’s letter he gives Bascon a period of two months within which
to pay the price of P500,000. After 50 days Araneta told Bascon that he is
increasing the price of the land to P700,000. Can Bascon compel Araneta to
accept P500,000 first offered by Araneta and execute the deed of sale?    A
a.    No, for Bascon did not signify his acceptance of the offer
b.    Yes, because the period of 2 months has not yet expired
c.    Yes, because Araneta is already estopped by his signed letter
d.    Yes, because there was actual meeting of minds of the parties
186. A sold to B a parcel of land for P30,000. The sale is evidenced by a
memorandum of agreement of sale written in Cebuano dialect. One week later,
A sold the same parcel of land to C for P40,000 which was evidenced by a
formal deed of sale. Upon buying the property, C, who was aware of the first
sale, immediately took possession of the land and registered the deed of sale in
her favor with the Register of Deeds. When informed of the second sale, B
subsequently registered an adverse claim to the property. The parcel of land
shall belong to     A
a.    B, because she has an older title
b.    C, because the sale was made on  formal deed of sale
c.    C, because she is the first to register the deed of sale
d.    C, because she is the first to take possession of the land
187. The guardian of an insane person sells a house and lot belonging to the
latter valued at P1,000, 000 to B, buyer for P700,000 with the approval of the
court. The contract is:     A
a.    Valid perfectly    d.    Unenforceable
b.    Rescissible    e.    Void
c.    Voidable
        
188. The following, except one, are the characteristics of void or inexistent
contract. Which is the exception      A
a.    Void contracts are also unenforceable contracts
b.    They are not subject to ratification
c.    The right to raise defense of illegality cannot be waived
d.    The action or defense for declaration of the nullity or inexistence of the
contract does not prescribe

189. A intimidated B to marry his daughter. After a year, B would like to file
an action for annulment but could not do so because A was around to intimidate
him. The marriage contract is     B
 a.    Rescissible    c.    Void
b.    Voidable    d.    Unenforceable

190. Which of the following contract is enforceable even if not reduced in

writing.    A
a.    Deed of donation involving a car worth P1M but not notarized
b.    Representation as to the credit of a third person
c.    Lease of immovable for a period longer than one year.
d.    Agreement for the sale of immovable property.

191. Simulation of Contract - Absolute or relative. Relative when:    C

a.    Parties not bound at all
b.    The contract is void
c.    The parties conceal their true agreement
d.    None of the above

192. Which of the following instruments is not subject to reformation?    D

a.    Simple donations inter vivos wherein no condition imposed
b.    Wills
c.    When the real agreement is void
d.    All of the above

193. Essential requisites of a contract, except:    B

a.    Consent    c.    Object
b.    Cause or Motive    d.    Subject

194. The offeror must know the acceptance by the offeree is the theory of:   
A
a.    Cognition    c.    Expedition
b.    Manifestation    d.    B or C

195. One of the stipulations contained in the contract between M Company

and its employees is that the company shall pay a bonus to employees of the
company who shall continue its employment for at least 2 consecutive years,
unless he quits or is discharged before the expiration of the period of 2 years.
X, an employee of the company was discharged with just cause one week
before the completion of the two-year period:    A
a.    X is not entitled to the bonus because his discharge was in accordance with
the contract.
b.    X is not entitled to the bonus, because the employer’s right to terminate is
superior than the right of the employee to be employed.
c.    X is entitled to the bonus whether the discharge is with or without cause.
d.    X is entitled to the bonus because the debtor company has voluntarily
prevented the happening of the condition.
  

196. Example No.1- W, a guardian, sold his house valued at P1M for
P500,000 or a lesion by more than one-fourth of the value of the said house.
        Example No.2- A donated his land orally to B. 
The contracts are:     D
a.    Both contracts are unenforceable
b.    No. 1 is rescissible; while No.2 is unenforceable
c.    1st is voidable; while 2nd is unenforceable
d.    The contracts are valid and void respectively

197. Statement No.1: Partnership is a formal and preparatory contract.    D

      Statement No.2: Sales are consensual and reciprocal as a rule.
a.    Both are true    c.    No.1 is true; No. 2 is false
b.    Both are false    d.    No.1 is false; No. 2 is true

198. Statement No.1: Validable contracts can be voided within the period
allowed by law.
        Statement No.2: There is fraud if insidious words or machinations were
employed by a party on the other just to obtain the latter’s consent, without
which the latter would not have entered into the contract.      D
a.    Both are true    c.    No.1 is true; No. 2 is false
b.    Both are false    d.    No.1 is false; No. 2 is true

199. B1 Company bought out a competitor, B2 Corporation, with a stipulation

that B2 Corporation should not thereafter engage in any business in the
Philippines unless consented to and approved by B1 Company.    D
a.    The stipulation is defective but subject to ratification.
b.    The stipulation is valid because the parties are free to enter into any
stipulation, terms and conditions such as this one.
c.    The stipulation is unenforceable as there was no showing that the sale as
done in writing
d.    The stipulation is invalid.
200. All are void contracts except:     B
a.    Those whose object is outside the commerce of men.
b.    Holographic will in a private instrument 
c.    Those with unlawful consideration.
d.    Donation of building in a private instrument