law on obligations - Sources of obligations and their concepts

1. When A voluntarily takes charge of the neglected business of B without the latter’s authority where
reimbursement must be made for necessary and useful expenses, there is a: (Phil CPA, 97-2)
General Feedback
Negotiorum gestio

2. 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. (Phil
CPA, 88-1)
General Feedback
Z is entitled to the baby horse which was born after the perfection of the contract
3. The obligation of the employer to pay death benefits and funeral expenses for his employer’s death
while in the course of employment as sanctioned by the Workmen’s Compensation Act is one that
arises from: (Phil CPA, 91-1)
General Feedback
Law
4. Unless the law or the stipulation of the parties required another standard of care, the obligation to
give a thing carries with it the obligation to take care of it with: (Phil CPA, 91-1)
General Feedback
Diligence of a good father of a family
5. The buyer of a thing has the right to the fruits of the thing: (Phil CPA, 89-2)

General Feedback
From the time the obligation to deliver the thing bought arises .

law on obligations - Kinds of obligations in general under the Civil Code

1. A, B and C solidarily owe X and Y P30,000. X remitted the entire obligation in favor of A. The effect is: (Phil
CPA, 97-2)

General Feedback
A cannot recover from B and C because remission in his favor extend to the benefit of B and C

2. This is the promissory note: We promise to pay A, B and C the sum of ONE HUNDRED EIGHTY THOUSAND
(P180,000) PESOS within 60 days. Signed X, Y and Z”: (Phil CPA, 89-2)

General Feedback
X is obliged to pay A P20,000
3. When the debtor binds himself to pay when his means permit him to do, the obligation is considered
as one: (Phil CPA, 91-1).
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With a period.
4. In this case, advance payment by the debtor is recoverable: (Phil CPA, 90-1)

General Feedback
If the debtor was unaware of the period
5. When the period is “on or before a date”, the debtor has the benefit of the period. This benefit is lost
and the obligation becomes demandable when: (Phil CPA, 90-2)
General Feedback
The debtor attempts to abscond
6. A and B are solidary debtors of X, Y and Z, joint creditors to the amount of P15,000. How much can
Z collect from B? (Phil CPA, 88-2)
General Feedback
Z could recover P5,000 from B
7. A solidary obligation is one in which each of the debtor is liable for the entire obligation or debt and
each of the creditors is entitled to the entire credit. Obligations shall also be considered solidary
under the following three exceptions. Which does not belong to the exception? (Phil CPA, 87-1)
General Feedback
When the prestation is indivisible and there are two or more debtors and creditors
8. A, B, and C solidarily bound themselves to deliver to X a Honda Motorcycle. The obligation was not
fulfilled through the fault of A. Thereupon, X filed an action in court against C and the court
awarded P36,000 to X. Which of the following situations is valid? (Phil CPA, 96-2)
General Feedback
If C pays X the P36,000, C can collect from A and B P12,000 each representing their proportionate share in
the value of the prestation
9. In a Joint obligation, A,B, and C are debtors of joint creditors D, E, and F, in the amount of
P180,000. A’s obligation is: (Phil CPA, 96-1)
General Feedback
Pay D P20,000.00
10. X and Y are solidary debtors of A, B and C, joint creditors to the amount of P30,000. How much can
B collect from X? (Phil CPA, 95-1)
General Feedback
B can collect P10,000 from X
11. Mr. AB owes Mr. CD P150,000 due on August 31, 1987. Mr. AB executed a mortgage in favor of
Mr. CD on Mr. AB’s building to guaranty the obligation. On August 10, 1987 the mortgaged building
was totally lost due to a strong typhoon. On August 12, 1987, Mr. CD demanded payment from Mr.
AB. Is Mr. CD’s demand valid? (Phil CPA, 88-1)
General Feedback
Yes. The debt becomes due at once because the guaranty was lost even through a fortuitous event unless
the debtor can mortgage another property that is equally satisfactory

In three (3) of the following cases advanced payment by the debtor is not recoverable. Which is the exception?
(Phil CPA, 89-2)
General Feedback
The debtor was not aware of the period

XYZ are solidarily liable to A for P30,000 which mature on July 1 1993. On May 1, 1993, X paid A
for the whole amount of the debt. If on December 1, 1993, X will be reimbursed by Y, the latter will
be liable for: (Phil CPA, 98-1)
General Feedback
P10,000 with interest from July 1, 1993 to December 1, 1993

In an obligation where only one (1) prestation has been agreed upon, but to extinguish the obligation
the debtor is allowed and does render another substitute, the obligation is
General Feedback
Facultative Obligation
 X obliged himself to pay Y the amount of P30,000 30 days after May 31, 1993 plus a penalty of P3,000 if he
fails to pay the obligation on due date and after demand for payment by Y, offered to pay on July 30, 1993. Y
can demand from X: (Phil CPA, 94-2)
General Feedback
P30,000 plus P3,000 plus legal interest

Bertulfo and Claudio promise to deliver a particular car valued at P100,000 to Manuela on or before
September 15, 1991. September 15, 1991 came and upon demand by Manuela for delivery from
Bertulfo and Claudio. Bertulfo was willing to deliver but Claudio refused to deliver. In the case at
bar: (Phil CPA, 91-2)
General Feedback
Bertulfo shall be liable for P50,000 without damages and Claudio shall be liable for P50,000 and damages

A-1 and A2 are solidary debtors of B-1, B-2 and B3, joint creditors in the amount of P90,000. How
much can B-3 collect from A-2? (Phil CPA, 90-2)
General Feedback
B-3 could collect P30,000 from A-2

In a joint obligation, A, B and C are debtors of joint creditors, D, E and F in the amount of
P180,000.00. A’s obligation is: (Phil CPA, 92-2)
General Feedback
Pay D P20,000.00

12. The creditor shall have a right to indemnity for damages when, through the fault of the debtor, all the
things which are alternatively the object of the obligation have been lost or compliance of the
obligation has become impossible. The indemnity shall be fixed as a basis: (Phil CPA, 87-1)
General Feedback
The value of the last thing which disappeared
13. OE is obliged to give OR his 1982 Mitsubishi, 4 door sedan Lancer with plate number NBA 123 on
September 30, 1989. On October 10, 1989, OE is not yet deliver the car which was totally destroyed
by an earthquake on such date. Is OE still liable? (Phil CPA, 89-2)
General Feedback
No. The obligation is extinguished. The specific thing was lost due to fortuitous event and no demand or
deliver was made by OR
14. This is a promissory note: “We promise to pay Dalsa, Cristina and Catherine the sum of P18,000”
(Signed) Jeng, Bambi and Gail: (Phil CPA, 92-1)
General Feedback
Gail is obliged to pay Catherine P2,000
15. A obliges himself to pay X P100,000 in 30 days plus a penalty of P20,000 if A fails to pay the obligation in due
time. A failed to pay the obligation in 30 days. X can demand from A: (Phil CPA, 90-2)

General Feedback
The principal of P100,000 plus P20,000 penalty
 16. A, B and C borrowed P24,000 from Y and Z signed a promissory note dated January 15, 1987 and due within
six (6) months. How much can Y collect from A? (Phil CPA, 88-2)

General Feedback
P4,000
17. It refers to joint obligation: (Phil CPA, 93-1)
General Feedback
One in which each of the debtors is liable only for a proportionate part of the debt and each creditor is
entitled only for a proportionate part of the credit
18. This is the promissory note: We promise to pay A, B and C the sum of ONE HUNDRED EIGHTY
THOUSAND (P180,000) PESOS within 60 days. Signed X, Y and Z”: (Phil CPA, 89-2)
General Feedback
X is obliged to pay A P20,000
19. A, B and C secured a load from D. The promissory note which evidence the obligation states: “I
promise to pay D or order P10,000 payable on demand” (Sgd) A B C. The obligation is: (Phil CPA,
95-1)
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Solidary
20. A, B and C secured a load from D. The promissory note which evidence the obligation states: “I
promise to pay D or order P10,000 payable on demand” (Sgd) A B C. The obligation is: (Phil CPA,
95-1)
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Solidary
21. A promissory note signed by Martiniano and dated March 15, 1991 is worded as follows: “I promise
to pay Juanita the sum of Fifty Thousand Pesos (P50,000) provided that if she should fail in the
October, 1991 CPA Examination, she shall return to me said amount.” The above note gives rse to an
obligation with: (Phil CPA, 91-2)
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Resolutory condition
22. The obligation is demandable on the date of the obligation and shall continue to be in force up to the
arrival of the day certain: (Phil CPA, 95-1)
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Suspensive period
23. X and Y are solidary debtors of A, B, C and D joint creditors to the amount of P8,000. How much can A
collect from X? (Phil CPA, 88-1)

General Feedback
A could recover P2,000 only from X.
24. When the thing deteriorates pending the fulfillment of the suspensive condition without the fault of
the debtor, the impairment is: (Phil CPA, 98-1)
General Feedback
to be borne by the creditor
25. A and B are joint creditors mancomunados of X and Y, joint debtors for a total sum of P9,000. A
owns 1/3 of the credit; B owns 2/3 of it. But X owns 2/5 of the debts; Y owes 3/5 of the debt. In this
case: (Phil CPA, 87-2)
General Feedback
A can only collect from X, P3,600 and from Y, P5,400
26. A-1 and A2 are solidary debtors of B-1, B-2 and B3, joint creditors in the amount of P90,000. How
much can B-3 collect from A-2? (Phil CPA, 90-2)
General Feedback
B-3 could collect P30,000 from A-2
 27. O gets a loan of P100,000 from P, which becomes due on November 23, 1993 and mortgaged his
house as security for the debt. On September 22, 1993, the mortgaged house was completely
destroyed by fire. A week after, P demanded payment from O on September 29, 1993. Is P’s
demand valid? (Phil CPA, 93-2)
General Feedback
Yes, the debt becomes demandable because the collateral was lost through a fortuitous event
28. Carlo and Cleo are solidary debtors of Cxc z0orina, Luis, Edward, and Abelito, Joint creditors in the
amount of P20,000. How much can Corina collect from Carlo? (Phil CPA, 92-1)
General Feedback
Corrina could collect P5,000 from Carlo
29. Mr. Santos secured and Mr. Dizon granted a loan of P100,000 due for payment on December
31,1988. Mr. Santos executed a first mortgage of his residential house in favor of Mr. Dizon to
guaranty the P100,000 loan. On October 19, 1988 the residential house was totally destroyed by
typhoon Unsang. On October 31, 1988 Mr. Dizon demanded payment of the loan from Mr. Santos. Is
the demand of Mr. Dizon for payment valid. (Phil CPA, 89-1)
General Feedback
Yes. The obligation became due at once because the guaranty was lost through a fortuitous event
30. An obligation where only the presentation has been agreed upon but the debtor may render another in
substitution is: (Phil CPA, 98-1)

General Feedback
facultative obligation
31. A, B, C and D are joint creditors of E and F, solidary debtors in the amount of P40,000. How much
can A, B and C collect from E? (Phil CPA, 90-1)
General Feedback
A, B, C and D could collect all the P40,000 from E
32. This is a promissory note: “We promise to pay Dulce, Carina and Corina the sum of P180,000.00”
(sgd) Jovy, Bimbo and Garry. (Phil CPA, 96-1)
General Feedback
Garry is obliged to pay Corina P2,000.00
33. Carlito, Alfredo and Francis owed in solidum P15,000 to Ricardo as evidenced by a promissory note
due on September 30, 1981. The note prescribed on September 30, 1991. On October 10, 1991,
Carlito paid Ricardo. In this case, Carlito is: (Phil CPA, 91-2)
General Feedback
Not entitled to reimbursement from his co-debtors for the shares of the latter
34. Which of the following statements is not correct? (Phil CPA, 96-2)

General Feedback
A stipulation that even when the object is delivered to the buyer, ownership will not pass until the price is
fully paid is not valid

law on obligations - Specific circumstances affecting obligations in general

1. Mr. ABC is obliged to give Mr. XYZ his only car on July 15, 1987. Mr. ABC did not deliver the car
on July 15, 1987. On July 20, 1987 an earthquake destroyed the building where the car was in garage
and the car was destroyed. Is Mr. ABC still liable? (Phil CPA, 88-1)
General Feedback
No. Considering that no demand to deliver was made by Mr. XYZ and the specific thing was lost due to
fortuitous event, the obligation is extinguished

2. When the characters of creditors and debtor are merged on the same person, the mode of extinguishing an
obligation is called: (Phil CPA, 86-2)

General Feedback
Confusion or merger
3. It is not a source of liability which will entitle the injured party to damages: (Phil CPA, 93-2)
General Feedback
Culpa Aquiliana or negligence committed in the performance of a spontaneous act
4. On July 1, 1989 A signs a promissory note and binds himself to pay X P100,000 plus 15% per annum
interest on June 30, 1991: (Phil CPA, 90-2)
General Feedback
Because the period is for the benefit of the debtor and creditor, X can refuse any tendered payment before
June 30, 1991
5. A borrower who uses the thing for a purpose different from that intended, delays its return, receives
the thing under appraisal, lends it to a third person, or saves his property instead of the thing
borrowed shall be liable even in case of fortuitous event, because: (Phil CPA, 91-1)
General Feedback
The law so expressly provides
6. X is under obligation to deliver his Toyota car to Y. However, before delivery Z destroys the car.
Which one of the following is not correct? (Phil CPA, 98-1)
 X’s obligation to give his car to Y is extinguished
 X is allowed to recover from Z
 Y has a right to bring action against Z
 X is not obliged to give Y an equivalent value of the car
General Feedback
X’s obligation to give his car to Y is extinguished
7. Mr. Montecillo entered into a contract with Mr. Villarojo by which Mr. Montecillo promised to deliver 1,000
cases of glassware of the class and at the price stipulated in the contract. Such delivery was to be made
during the months of February and March, 1991. In this case, no further demand or notice by Mr. Villarojo
on Mr. Montecillo was necessary because: (Phil CPA, 91-1)
 Time is the essence of the contract
 The obligation expressly so provides
 The demand would be useless
 Answer not given
General Feedback
Answer not given
8. This person is liable for the loss of the subject matter by fortuitous event: (Phil CPA, 85-2; 88-1; 89-
1)
 Creditor
 Debtor
 Creditor and Debtor
 None of them
General Feedback
None of them
9. These statements concerning delay are presented to you:
I. There is no delay in obligations not to do.
II. As a rule, the debtor will be in default if he does not perform his obligation on due date.
In your evaluation of the foregoing statements:
General Feedback
Only Statement I is true.
10. A to sell B his lot and house in the city if A decides to transfer and live, in the countryside” is an
example of: (Phil CPA, 94-1)
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Potestative condition

If the obligor binds himself to perform his obligation as soon as “he shall have obtained a loan from a certain
bank, this obligation is: (Phil CPA, 93-1)
General Feedback
void
11. A condition with, if imposed on an obligation will be disregarded and will therefore make the obligation
immediately demandable: (Phil CPA, 94-1)

General Feedback
If Juan will not rise from the dead

law on obligations - Extinguishment of obligation

1. On June 5, 1991, Jose Dizon of Angeles City is obliged to give Ruben Samia, Jose Dizon’s red crew
cab. There was no delivery until June 15, 1991 when the garage of the red crew cab collapsed due to
heavy ash and sand spewed by Mt. Pinatubo and the red crew cab was totally destroyed. After the
crew cab was destroyed and lost, is Jose Dizon still liable? (Phil CPA, 92-2)
General Feedback
No. Because there was no demand by Ruben Samia to deliver the crew cab and the specific object was lost
due to fortuitous event. The obligation is extinguished

2. When two person in their own rights are reciprocally creditors and debtors of each other and extinguishes
both debts to the concurrent amount, what takes place is known as: (Phil CPA, 91-1)

General Feedback
Compensation
3. Consignation is a mode of payment which extinguishes an obligation. Which of the following is not a
requisite for consignation? (Phil CPA, 87-1)

General Feedback
Prior notice has not been made
4. Dacion en pago as distinguished from sale: (Phil CPA, 98-1)

General Feedback
the object is always existing and specific
5. A obliged himself to give B a car if B places among the top ten in the CPA Board Exam. Subsequently, they
agreed that A will give B the car if B merely passes the CPA Board. This is an example of: (Phil CPA, 94-2)

General Feedback
Real novation
6. The distinction between conventional subrogation and assignment is that in conventional subrogation: (Phil
CPA, 91-1)

General Feedback
An obligation is extinguish and another appears
7. When two (2) persons are reciprocally debtors and creditors, there is: (Phil CPA, 88-2, 89-1)
General Feedback
Compensation
8. A owes X P50,000 payable on or before June 30, 1990. S who is not a party to the contract and without the
consent and against the will of A paid 1990 when the prevailing rate of interest was 12% per annum. (Phil
CPA, 90-2)

General Feedback
S can ask reimbursement from A in the amount of P50,000
9. Takes place when two persons in their own right, are creditor and debtor of each other: (Phil CPA, 98-1)

General Feedback
Compensation
10. This mode of extinguishment of obligations is when two (2) persons, in their own rights, are
creditors and debtors of each other. (Phil CPA, 90-1)
General Feedback
Compensation
11. A thing is not deemed lost when it: (Phil CPA, 98-1)

General Feedback
Deteriorates
12. On October 4, 1987, 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, 1987, X became
insolvent. At the time of delegation, X was already insolvent but this was not known to A. The insolvency is
not of public knowledge. So B sues A on the ground that it was A who made proposal that A guaranteed X’s
solvency. Decide: (Phil CPA, 87-2)

General Feedback
A is not liable, because A does not know the insolvency of X at the time of delegacion and neither was the
insolvency of public knowledge
13. Sale is distinguished from dation in payment in that in sale: (Phil CPA, 91-2)

General Feedback
The cause is the price
14. When an obligation is extinguished because of the passage of time, this is: (Phil CPA, 90-2)

General Feedback
Prescription
15. When the debtor abandons and assigns all his properties in favor of his creditors for the latter to sell to
satisfy his credits, this is: (Phil CPA, 90-1)

General Feedback
Payment by cession
16. A executes promissory note in favor of B and that promissory note is negotiated by B and
subsequently indorsed in favor of A. The obligation to pay the said promissory note is thereby
extinguished because there is: (Phil CPA, 91-1)
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Confusion or merger
17. When the characters of the creditor and the debtor are merged in one and the same person, there is
extinguishment of the obligation by: (Phil CPA, 96-2)
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Merger of rights

It is a mode of extinguishing an obligation when two persons in their own right are creditors of each other:
(Phil CPA, 86-2; 94-1; 94-2)
General Feedback
Compensation

Which of the following is not an element of Compensation: (Phil CPA, 95-1)

General Feedback
There is controversy or adverse claim over any debts to be compensated

When the debtor abandons or transfers all his properties to the creditors so that the creditors may sell the
properties and out of the net proceeds the creditors recover their claims this is called: (Phil CPA, 90-2)
General Feedback
Payment of cession

18. If the creditor to whom tender of payment has been made refuses without just cause to accept it, the debtor
shall be released from responsibility by: (Phil CPA, 91-1)

General Feedback
Consignation of the thing or sum due
19. C is the creditor of D in the amount of P50,000. C is the guarantor of D paid C partially with P20,000. A not
knowing the partial payment of D and against the will of D paid C the amount of P50,000. What is the effect
of this payment in the obligation: (Phil CPA, 89-2)

General Feedback
The obligation is extinguished. A can demand P30,000 from D, but if D cannot pay, A cannot ordinarily
proceed against guarantor C because A is not entitled to subrogation
20. One is not a requisites needed in order that obligation shall be extinguished by loss or destruction of the
thing due: (Phil CPA, 94-2)

General Feedback
When the thing lost is generic
21. Compensation shall take place when: (Phil CPA, 91-1)

General Feedback
Two persons, in their own right are creditors and debtors of each other
22. On June 5, 1991, Jose Dizon of Angeles City is obliged to give Ruben Samia, Jose Dizon’s red crew
cab. There was no delivery until June 15, 1991 when the garage of the red crew cab collapsed due to
heavy ash and sand spewed by Mt. Pinatubo and the red crew cab was totally destroyed. After the
crew cab was destroyed and lost, is Jose Dizon still liable? (Phil CPA, 92-2)
General Feedback
No. Because there was no demand by Ruben Samia to deliver the crew cab and the specific object was lost
due to fortuitous event. The obligation is extinguished
23. Jesus owes Maria P1,000.00 on June 30, 1993.
Maria owes Jesus P600.00 due on June 20, 1993.
Maria owes Jesus P400.00 due on June 30, 1993.
Maria owes Jose P1,000.00 due on June 30, 1993.
On June 25, 1993, Maria cannot pay Jose P1,000.00 so she assigns to Jose her credit card of P1,000.00
against Jesus without the knowledge of Jesus. On July 2, 1993, Jose tries to collect from Jesus the
P1,000.00. How much can Jose compel to pay? (Phil CPA, 93-2)
General Feedback
Zero
24. X, a minor sold to Y his parcel of land for P100,000. From the proceeds of the sale, X deposited P30,000 in
the bank spent for food, clothing and other personal expenses P20,000, joined a tour abroad costing
P20,000, lost in gambling P20,000 and loaned P10,000 to Z who became insolvent. Upon reaching the age of
 21 years, X files an action for annulment which the court granted. Y was required to return the land to X and
X was made to return to Y the amount of: (Phil CPA, 94-1)

General Feedback
P70,000
25. This special form of payment is the conveyance of the ownership of a thing as accepted equivalent of
performance. (Phil CPA, 85-2)
General Feedback
Dation in payment or dacion en pago
26. A owes B P10,000. With consent of both, C pays B P5,000. Now B and C are the creditors of A to the amount
of P5,000 each. Suppose A has only P5,000. Which is correct? (Phil CPA, 98-1)

General Feedback
B should be preferred
27. A owes B P10,000. With consent of both, C pays B P5,000. Now B and C are the creditors of A to the amount
of P5,000 each. Suppose A has only P5,000. Which is correct? (Phil CPA, 98-1)

General Feedback
B should be preferred
28. This special form of payment is the conveyance of the ownership of a thing as accepted equivalent of
performance. (Phil CPA, 85-2)
General Feedback
Dation in payment or dacion en pago
29. Which of the examples given below can compensation take place? (Phil CPA, 95-1)

General Feedback
A owes B P1,000 due on June 30, 1993. B owes A P1,000 due on June 30, 1993 but C has filed an adverse
claim against A
30. An act of liberality whereby a creditor condones the obligation of the debtor: (Phil CPA, 98-
1)ConfusionCompensationRemissionNovation

General Feedback
Remission
31. Mr. Debtor owes Mr. Creditor who has two (2) legitimate emancipated children, P50,000.00 payable on
December 31, 1991. (Phil CPA, 92-2)

General Feedback
If both Mr. Debtor and Mr. Creditor die, the heirs of Mr. Creditor can collect from the heirs of Mr.
Debtor
32. One of the following statement is not true: (Phil CPA, 93-1)

General Feedback
The purchasing power of value of money or currency depends upon, can come into being can be created or
brought about by a law enacted by the legislative department of the Government
33. The leviable properties of the debtor are transferred to the creditors to be sold and from the proceeds, the
creditors are paid: (Phil CPA, 94-2)

General Feedback
Cession
34. The P1,000 bills issued by the central bank and in circulation are considered: (Phil CPA, 93-1)

General Feedback
Legal tender
35. It presupposes not only that the obligor is able, ready, and willing, but more so, in the act of performing his
obligation. (Phil CPA, 93-1)
General Feedback
Tender of payment

law on contracts - Concepts and classification

1. Essential Requisites of a contract:

Consent
Cause
Subject
all of them
General Feedback
all of them

2. The mere liberality of the benefactor is the cause in:

General Feedback
Contract of pure beneficence
3. This is not always an essential element of a contract;
General Feedback
Form;
4. An innominate contract which means “I give that you may do”
General Feedback
Do ut facias
5. DO UT FACIAS:
General Feedback
I give that you make
6. It takes place when the parties do not intend to be bound at all by their agreement: (Phil CPA, 93-1;
96-1; 97-1)
General Feedback
Absolutely simulated contract
7. This is a real contract:
Deposit
Pledge
Mutuum
All of them
General Feedback
All of them
8. Strictly speaking, which of those should not anymore be considered an innominate contract?
General Feedback
Do ut des or I give that you give;
9. These are the basic principles or characteristics of a contract. Which is the exception? (Phil CPA, 90-
1)
General Feedback
Binding on third parties.
law on contracts - Elements and stages -

1. This is not always an essential element of contract:

General Feedback
Terms and conditions imposed by the parties
2. A contract is in the stage of conception when: (Phil CPA, 92-1)
General Feedback
Negotiations are in progress.
3. S offers to sell his car to B for P125,000 cash. B accepts the offer but is willing to pay only
P120,000.
General Feedback
The contract was not perfected because the acceptance by B was qualified and it constituted a
counter-offer.
4. The stage of “conception” of a contract is:
General Feedback
When the negotiations are in progress.
5. Which of these is proof of the perfection of a contract of sale?
General Feedback
Earnest money

law on contracts - Freedom from contract and limitation

1. The contract must bind both contracting parties, its validity or compliance cannot be left to the will
of one of them, and this is
General Feedback
Mutuality of contract .
2. Contracting parties are free to enter into all kinds of pacts, terms or stipulations provided they are
not contrary to law, morals, good customs, public policy or public order. The above is a description
of the characteristic of a contract known as:
General Feedback
autonomy of contracts
3. The principle that the contracting parties may establish such stipulations, clauses, terms and
conditions as they may deem convenient, provided they are not contrary to law, morals, good
customs, public order or public policy.
General Feedback
Principle of liberty of contract.
4. The characteristic of a contract to the effect that a contract binds not only the contracting parties, but
also the heirs or assigns is called:
General Feedback
Relativity of contracts

law on contracts - Persons bound

 1. Eianne signed a promissory note in favor of Flor promising to pay P10,000 30 days after sight. Who
can sue on this note and enforce the obligation? (Phil CPA, 93-1)
General Feedback
Only Flor
2. These persons are bound by contracts. (Phil CPA, 85-2; 88-2)
 Contracting parties
 Heirs
 Assigns
 All of them
General Feedback
All of them
3. Contracts are effective and binding only between the parties, their assigns and their heirs. Three of
the following enumerations are exceptions as provided by law. Which does not belong to the
exception? (Phil CPA, 87-1)
General Feedback
Where the obligations arising from contract are not transmissible by stipulation or by provision of
law.
4. These persons are bound by contracts except:
General Feedback
Third persons
5. The person called to the succession either by the provision of the will or by operation of the law.
(Phil CPA, 94-2)
General Feedback
Heir
6. These persons are bound by contracts.
 Contracting parties
 Assigns
 Heirs
 All of them
General Feedback
All of them

law on contracts - Consent

1. . Mr. Reyes and Mr. Vitug are good friends. Mr. Reyes sold and delivered his car to Mr. Vitug. It
was agreed and understood that on Sunday Mr. Reyes will name and fix the price of the car. Sunday
came. Mr. Reyes called Mr. Vitug by telephone and stated and fixed the price at P150,000. Is the sale
perfected? (Phil CPA, 89-1)
General Feedback
No. The price fixed by the seller was not accepted by the buyer

2. S in Manila offered to sell to B in Cebu his house and lot for P10,000,000 giving the latter 60
days within which to decide. B accepted the offer of S by a letter. While the letter was on its
way to Manila, B changed his mind and sent to S another letter withdrawing his acceptance 2
days after his first letter.
General Feedback
B can withdraw the acceptance because such withdrawal was made before S received his first
letter of acceptance.
3. A wrote a letter to B wherein A offered to sell a piece of land to B for P200,000. B signified his
desire to buy the land. In A’s letter, B was given a period of two (2) months within which to produce
the P200,000. After 45 days, A told B that price of the land is now P250,000. Can B compel A to
accept the P200,000 first offered by A and execute the deed of sale? (Phil CPA, 88-1)
General Feedback
No, for B did not signify his acceptance of A’s offer.
4. . Mr. Santos offered to sell his land to Mr. Calma for P100,000. Mr. Calma accepted the offer and
paid Mr. Santos P100,000and Mr. Santos delivered the owner’s duplicate of the Transfer Certificate
of Title of the land. Mr. Calma wishes to register the land in his name but the Register of Deeds
asked Mr. Calma for the Deed of Sale. What can Mr. Calma do? (Phil CPA, 88-2)
General Feedback
Mr. Calma may compel Mr. Santos to execute the Deed of Sale because the contract is valid .
5. When there is concurrence of offer and acceptance, there is:
General Feedback
Consent
6. Three of the following are option money. Which is the earnest money? (Phil CPA, 89-2)
General Feedback
Given when contract of sale is perfected.
7. Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause
which are to constitute the contract. Which of the following constitutes an offer: (Phil CPA, 91-1)
General Feedback
An offer made through an agent
8. S offered to B the sale of his house and lot for 10,000,000 by means of a letter. At the same time, B
offered to buy from S the same house and lot by way of telegram for P10,000,000 also. B has
received the offer of S and S has also received the telegram of B. Is there a perfected contract of sale
between S and B?
General Feedback
No, because what occurred was not a concurrence of offer and acceptance but a
crisscrossing of offers.
9. Mr. AB offered in writing to sell his house and lot for P750,000 to Mr. CD on July 1, 1989. Mr. CD
requested Mr. AB to give him 60 days within which to raise the P750,000. On August 15, 1989 Mr.
AB informed Mr. CD that the price is raised and now at P1,000,000. Can Mr. CD compel Mr. AB to
sell his house and lot at P750,000 which was offered in writing by Mr. AB? (Phil CPA, 90-1)
General Feedback
No, because Mr. CD has not accepted the offer of Mr. AB.
10. Mrs. Gomez sold and delivered her diamond ring to Mrs. Pangan. It was agreed upon that after ten
(10) days Mrs. Pangan will name and fix the price. On the tenth (10 th ) day, Mrs. Pangan called up by
telephone Mrs. Gomez and stated the price at P10,000. Mrs. Gomez agreed. Is the sale perfected?
(Phil CPA, 88-2)
General Feedback
Yes. The price stated and named by one of the contracting parties was accepted by the other.
11. S offered to sell his house and lot to B for P5,000,000 giving to him an option of 60 days within
which to decide whether or not to buy. After only 15 days, S met T who offered to buy the same
house and lot for P8,000,000. S then notified B of the withdrawal of the option and proceeded to sell
to T. B files an action for damages against S.
General Feedback
B can recover damages from S because the latter violated the option given to the former .
 12. On June 1, 2012, S offered to sell his only car to B for P100,000. B accepted the offer by mailing his
letter of acceptance of June 10, 2012. On June 12, 2012, B revoked his letter of acceptance and
mailed his letter of revocation on the same date. S received the letter of acceptance on June 14, 2012
and the letter of revocation on June 15, 2012.
General Feedback
The contract was not perfected because at the time the acceptance was received, the parties were no
longer of one mind.
13. Mr. A. Santos signed a letter addressed and delivered to Mr. S. Aguas. The terms of the letter are:
1. An offer to sell a 500 sq. m. lot for P300,000.00.
2. An option time up to October 31, 1991 for Mr. S. Aguas to raise the P300,000.00.
3. Upon payment of the P300,000.00, Mr. A. Santos will execute and sign a Deed of Sale.
On October 31, 1991, Mr. A. Santos sent a letter to Mr. S. Aguas asking for a new price of P350,000.00 for
the 500 sq. m. lot. Can Mr. S. Aguas compel Mr. A. Santos to accept the P300,000.00 and make him sign
and execute a Deed of sale? (Phil CPA, 92-2; 96-1 (name modified))
General Feedback
No. Mr. S. Aguas did not accept the offer of Mr. S. Santos

law on contracts - Objects of contracts p

1. 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 latter on refuses to marry Y who has spent for the necessary wedding preparations and X
and Y bring an action against A and B, will the action prosper? Decide: (Phil CPA, 87-2)
General Feedback
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.
2. Requisites of a valid object or subject matter:
 Must be determinate or definite as to its kind
 Must be possible
 Both a and b
 None of them
General Feedback
Both a and b
3. Three (3) of the following may be valid objects of a contract, except: (Phil CPA, 89-2)
 All that are within the commerce of man.
 All services which are not contrary to law.
 Impossible things or services
 All rights that are transmissible.
General Feedback
Impossible things or services
4. Mr. Gambino owes Mr. Eglesia P100,000. Gambino knows that on maturity date, he will not be able
to pay Eglesia, and in order to prevent attachment of his property by Eglesia, Gambino, before
maturity of his debt, executes a contract pretending to sell to Mr. Santos his property. Which of the
following statements is not correct? (Phil CPA 95-2)
General Feedback
The contract is binding between Gambino and Santos
5. Requisites of a valid cause:
 It must be lawful
 It must be real
 It must be true
 All of them
General Feedback
All of them
6. Valentina orally promised to many Pedro as consequence of which the latter contracted the Manila
Cathedral as the venue of the marriage, the whole of the Fiesta Pavilion of the Manila Hotel the
bridal gown to be made by Pitoy Moreno, spending all in all about P1,000,000. On the date of the
marriage, Valentina did not appear:
General Feedback
While Pedro cannot compel Valentina to marry him, he can collect from Valentina damages.
Requisites of a valid cause:
General Feedback
All of them

law on contracts - Considerations of contracts

1. O agreed to transfer to I, verbally, a residential lot in consideration of a service or benefit already

rendered by the latter in favor of the former. Which of these is correct?
General Feedback
The verbal agreement is enforceable because it is not covered by the Statute of Fraud .
2. Three of the following are void contracts. Which is the exception?
 contracts where the cause is immoral.
 contracts to prevent a known supporter of a political rival from voting for his candidate for a
valuable consideration.
 contracts with valid consideration but with unlawful motives.
 absolutely simulated contracts.
General Feedback
contracts with valid consideration but with unlawful motives.
3. X, after the death of his father, sold his inheritance though its amount has not yet been determined to
B, for a consideration of P50,000.
General Feedback
The contract is void if nothing remains of the inheritance to be turned over to B.
4. . Mr. Gamboa sold his car for P200,000 to Mr. Ramos. There was no fixed date for the performance
of the obligations of both parties. The obligation of Mr. Gamboa as vendor is: (Phil CPA, 97-2)
General Feedback
To wait for Mr. Ramos to pay P200,000 and deliver the car.
5. Mr. Santos sold his car to Mr. Garcia for P150,000. No date is fixed by the parties for the
performance of their respective obligations. The obligation of Mr. Santos is: (Phil CPA, 88-1)
General Feedback
To deliver the car upon the payment by Mr. Garcia of P150,000.
6. P.A.U sold to R.D.E the former’s car on April 1, 1992 for P300,000. P.A.U. promised to deliver the
car on April 15, 1992 but A.D.E. did not make any promise as to when to pay. (Phil CPA, 92-1)
General Feedback
R.D.E. will be obliged to pay only at or after delivery.
7. Mr. Guzman sold his owner type jeep to Mr. Montano for P100,000. There was no date fixed for the
performance of the obligation of Mr. Guzman and Mr. Montano. The obligation of Mr. Guzman is:
(Phil CPA, 89-1)
General Feedback
To wait for Mr. Montano to pay P100,000 and deliver the jeep.
8. X sold his car to Y for P50,000. No date was fixed for the performance of the obligations of the
seller and the buyer. The obligation of X is: (Phil CPA, 86-2)
General Feedback
To deliver the car after Y pays X the P50,000.

law on contracts - Formalities of contracts -

1. In a written contract of sale between S and B the true intention of the parties was not incorporated
due to the mistake of S but where B is innocent. Assume that there was a meeting of the minds
between S and B. Who can bring the action for reformation?
General Feedback
Both B and S
2. Statement 1: S orally sold to B a piece of land P1,000,000 where the latter made a down payment of
P500,000 to the former, B can compel S to execute a public document containing the sale.
Statement 2: In reformation of contracts, where the mistake, fraud or accident prevented a meeting
of the minds, the remedy remains to be reformation and not annulment.
General Feedback
Statement 1 is true, but statement 2 is false.
3. Which of these is a formal contract?
 Donation of real property
 A partnership where there is contributed real property
 Both of (a) and (b)
 None of (a) and (b)
General Feedback
Both of (a) and (b)
4. Three of the following contracts must be in writing to be valid. Which is the exception?
 Contract of partnership where immovables are contributed.
 Contract where the amount involved exceeds five hundred pesos.
 Contract of agency to sell the land of the principal.
 Negotiable instruments.
General Feedback
Contract where the amount involved exceeds five hundred pesos.
5. A sold a residential land to B. B paid the consideration. When B wanted to register the sale at the
Register of Deeds, the latter refused to register it and required the presentation of the certificate of
capital gains tax payments. What can B do? (Phil CPA, 92-1; 96-1).
General Feedback
B may compel A to pay capital gains tax and secure the Certificate of Capital Gains Tax payment .
6. Mr. Burgos sold a parcel of land to Mr. Javier for P200,000. Mr. Burgos delivered the transfer
Certificate of Title of the land to Mr. Javier. Later, Mr. Javier wanted to registers the land to his
name and he needed a Deed of Sale. What can Mr. Javier do? (Phil CPA, 89-1)
General Feedback
Mr. Javier can compel Mr. Burgos to execute Deed of Sale
7. X enter into a contract with Y whereby X sold his land orally to Y. The land has been delivered and
the money has been paid. Is the oral sale of the land valid? (Phil CPA, 87-2).
General Feedback
The contract is valid because the contract is already perfected and executed .
8. A loan for P800 was orally contracted. May the lender recover the sum lent?
General Feedback
Yes, because the contract is enforceable.
9. These novations take place automatically or by operation of law. Choose the exception:
 Where a creditor pays another creditor who is preferred.
 Where a third person who has no interest in the obligation makes payment with the consent of
the debtor.
 Where a third person who has an interest in the obligation makes payment to the creditor.
 None of the above.
General Feedback
None of the above.
10. X alleged that Y promised to give X one hectare of land. This is in consideration of X’s meritorious
service to Y. Y pleads in defense that since the promise was not in writing, it is unenforceable under
the Statute of Frauds. Decide. (Phil CPA, 87-2)
General Feedback
To deliver the car after Y pays X the P50,000.

law on contracts - Interpretation and reformation of contract

1. Which of the following contracts may be cured by reformation?

General Feedback
A Contract of Mortgage fraudulently made as a Contract of Sale
2. Which of these is not subject to reformation?
 Simple donations inter vivos where no conditions are imposed.
 Last wills and testaments
 Contract where the real agreement is void.
 All of the above
General Feedback
All of the above
3. Which of the following is not a rule in the interpretation of contracts? (Phil CPA, 87-1)
General Feedback
Although the cause is not stated in the contract, it is presumed that it exists and is lawful, unless the
debtor proves the contrary.
4. Cecilio had Ricardo kidnapped and tortured Eduardo for refusing to sell his (Eduardo’s) laid to
Cecilio. Eduardo who could no longer bear the physical pains inflicted upon him signed a document
of sale in favor of Cecilio. This sale is: (Phil CPA, 91-2)
General Feedback
Voidable
5. Which of the following instrument is not subject to reformation
 Simple donation inter vivos wherein no condition is imposed
 Wills
  When the real agreement is void
 All of the above

General Feedback
All of the above
6. There shall be no reformation of contract in the following cases, except: (Phil CPA, 96-2)
General Feedback
A contract of sale fraudulently made as a contract of lease

law on contracts - Defective contracts

1. Rescission of contract can take place in this case: (Phil CPA, 93-1; 97-1 )
General Feedback
When he demands rescission can return whatever he may be obliged to restore .
2. A guardian of B sold B’s house and lot worth P480,000 for P240,000. (Phil CPA, 87-2)
General Feedback
The contract can be rescinded because of inadequacy of price.
3. The following agreements are covered by the Statute of Fraud. Choose the exception.
 An oral agreement which by its terms is not to be performed within one year from the making
thereof.
 An oral special promise to answer for the debt, default or miscarriage of another.
 An oral agreement in consideration of marriage.
 An oral contract of partnership where the contribution in money or personal property amounts
to P3,000 or more
General Feedback
An oral contract of partnership where the contribution in money or personal property amounts to
P3,000 or more
4. Which of the following contracts is not void ab initio?
General Feedback
The contract which is relatively simulated or fictitious.
5. S and B agreed on the sale of a certain amount of opium for the total price of P1,000,000. Which of
these statements is correct?
General Feedback
The opium and the consideration of P1,000,000 shall be confiscated by the government.
6. The guardian of an insane person sells a house and lot belonging to the latter valued at P100,000 to
B, buyer for P74,000 with the approval of the court. The contract is: (Phil CPA, 97-1)
General Feedback
Valid
7. Factor vitiating consent
General Feedback
Dolo causante
8. . Mr. Esguerra, a former government employee, suffered from severe paranola and was confined in
the mental hospital in 1981. After his release he was placed under the guardianship of his wife to
enable him to get retirement pay. In 1984 he became a mining prospector and sold some mining
claims. In 1987 he sued to annul the sale claiming that he was not mentally capacitated at the time of
sale. The sale in question was: (Phil CPA, 93-1; 97-1)
General Feedback
Valid
9. On September 1, 1987, A entered into a contract with B, whereby A sells to B 5,000 sacks of sugar to
be delivered on the 15 th and to be paid in full on the 30th. There was no agreement for rescission based on non-
payment. 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 and refused to make the delivery. Decide. (Phil
CPA, 87-2)
General Feedback
A can rescind the contract for nonpayment of the price.
10. A intimidated B to marry A’s daughter. After a year, B would like to file action for annulment but
could not do so because A was around to intimidate him. The marriage contract is: (Phil CPA, 93-2)
General Feedback
Void
11. Choose the contracts which are voidable. (Phil CPA, 92-1).
General Feedback
Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud.
12. The stipulation in a contract to the effect that the debtor should remain as a servant in the house and
in the service of her creditors so long as she had not paid her debt, is void because it is: (Phil CPA,
91-1)
General Feedback
Contrary to law and morality
13. S offered to sell to B his house and lot for P10,000,000. In order to pressure B into buying said house
and lot, T, a very good friend of S, threatened B with death as a result of which B accepted the offer
of S. It turns out now that the market value of the house and lot is P15,000,000. Is the contract of S
and B valid?
General Feedback
The contract is voidable because the consent given by B is anyway vitiated even if the intimidation
was employed by a third person.
14. Andy is the representative of Babes, an absentee sells a house and lot valued at P100,000 for only
P60,000. The contract is: (Phil CPA, 97-1)
General Feedback
Rescissble

Three (3) of the following contracts are void. Which is not? (Phil CPA, 92-2)
General Feedback
Oral partnership agreement when capital is more than P3,000.00

15. On July 15, 1986, X entered into a contract with Y. On February 10, 1987, X discovered that fraud
was committed at the time he entered into the contract a fraud that vitiated his consent. The action
for annulment shall be brought. (Phil CPA, 87-2)
General Feedback
Within four years from February 10, 1987
16. A voidable contract:
 Contract agreed to in state of drunkenness
 Contract agreed to during hypnotic spell
 Contract where consent is given through undue influence
 All of the above
General Feedback
All of the above
 17. M, minor, owns a house and lot valued at P1,000,000 and G is his guardian , M sold said house and
lot to B, a capacitated person, for P600,000 in a private writing. The contract between M and B is:
General Feedback
Voidable
18. In order that fraud may make a contract voidable: (Phil CPA, 87-1).
General Feedback
It should be serious and should not have been employed by both contracting parties .
19. Which of the following contracts cannot be ratified? (Phil CPA, 87-1)
General Feedback
Those whose cause or object did not exist at the time of the transaction .
20. The least defective contract:
General Feedback
Rescissible contract
21. A and B who are both unemancipated minors entered into a contract. The contract entered into by
and between them is: (Phil CPA, 87-1)
General Feedback
Unenforceable
22. S and B entered into a contract of sale of a piece of land embodied in a public document on March
14, 2002. On July 20,2002, the said public document was registered with the Register of Deeds. On
December 15, 2002, B discovered that he was defrauded by S. The prescriptive period for the filing
of the action for annulment shall be counted;
General Feedback
Within four (4) years from July 20, 2002 or the date of registration with the Office of the
Registration of Deeds;
23. Contracts which cannot be sued upon unless ratified, thus it is as if they have no effect yet, are: (Phil
CPA, 97-2)
General Feedback
Unenforceable
24. The following, except one, are the characteristics of void or inexistent contract. Which is the
exception? (Phil CPA, 93-2)
General Feedback
The defense of illegality of the contract is available to third persons whose interest is not directly
affected.
25. An oral contract of guaranty:
General Feedback
Unenforceable
26. M is minor who owns a house and lot valued at P1,000,000. G is the guardian who sold the house and
lot to B for only P600,000 but with the approval of the court. The contract between G and B is ?
General Feedback
Valid;
27. Contracts entered into a state of drunkenness or during a hypnotic spell are: (Phil CPA, 93-1; 97-1)
General Feedback
Voidable
28. Which of the following contracts is valid? (Phil CPA, 97-2)
General Feedback
Oral contract of agency giving authority to an agent to sell the land belonging to the
principal.
29. Which of these constitutes fraud?
General Feedback
An expression of opinion which did not turn out to be true if made by an expert and the other party
relied on it.
30. The process of intentionally deceiving others by producing the appearance of a contract which is
different from the true agreement is: (Phil CPA, 96-2)
General Feedback
Relative simulation of a contract
31. Three (3) of the following contracts are void. Which one is not? (Phil CPA, 89-2)
General Feedback
Oral contract of Partnership of three (3) partners and capital contribution is more than P3,000 in
cash.
32. This results in the ratification of a contract violative of the Statute of Fraud:
 Receipt of benefits under the agreement.
 Failure to object to the presentation of evidence proving the oral agreement.
 Both (a) and (b)
 None of (a) and (b)
An agreement in restraint of trade:
General Feedback
Void
To defraud his creditors, A contracted B by selling a land to B. B now seeks to register the land with the
Register of Deeds. X a creditor of A seeks to prevent the registration on the ground that the contract is
rescindable. Despite X’s objection may the land be registered based on the contract in B’s name. (Phil CPA,
87-2)
General Feedback
The land can be registered based on the contract because the contract is not yet rescinded.

General Feedback
Both (a) and (b)
33. Contracts entered into during lucid interval are: (Phil CPA, 89-2)
General Feedback
Answer not given
 Valid
34. In a written contract the true intention of the parties was not reflected therein through the fraud
committed by one of them, which fraud prevented a meeting of the minds. The applicable remedy
would be
General Feedback
Annulment of the contract
35. When one of the parties to a contract is compelled to give his consent by a reasonable and well
grounded fear of an imminent and grave evil upon his person or property, or upon the person or
property of his spouse, descendants or ascendants, there is: (Phil CPA, 91-1)
General Feedback
Intimidation
36. When the object of the contract is outside the commerce of man, the contract is: (Phil CPA, 86-2)
General Feedback
Void
37. Three (3) of the following contracts are void. Which one is not? (Phil CPA, 89-2)
General Feedback
Oral contract of Partnership of three (3) partners and capital contribution is more than P3,000 in
cash.
38. The following is considered fraud or fraudulent: (Phil CPA, 90-1)
General Feedback
Failure to disclose facts when there is duty to reveal them .
39. F disappeared without his whereabouts having been known sometime in 1994. Whereupon in 1996,
W, his wife, sold his house and lot worth P10,000,000 for only P7,000,000 in favor of T in order to
support the family. In 1998, F resurfaced and began staying with his family. In 2003, F decided to
file an action to rescind the contract with T. In this case:
General Feedback
Even if F can return the P7,000,000 and the house and lot has not been sold to a buyer in good faith,
rescission will not lie because more than 4 years had lapsed from the reappearance and, therefore, his
right to rescind has already prescribed.
40. The proper remedy is annulment of contract and not reformation when: (Phil CPA, 91-1)
General Feedback
Mistake, fraud, inequitable conduct, or accident has prevented a meeting of the minds of the parties .
41. Rescission of contract can take place in this case: (Phil CPA, 93-1; 97-1 )
General Feedback
When he demands rescission can return whatever he may be obliged to restore .
42. An oral sale of land for P500,000.
General Feedback
Unenforceable
S defrauded B in making the latter believe that the ring he is selling is gold and diamond when, in fact, it is
copper and glass. On the other hand, B defrauded S in paying him P200,000 in fake Philippine currency.
Which of these statements is correct?
General Feedback
Which of the following contracts is not void ab initio?
Neither S nor B can go to court since they are both guilty of fraud.

Statement 1: A contract whose cause or object did not exist at the time of the transaction is a
defective contract which cannot be remedied by providing a cause or object as the case may be
in the contract.
Statement 2: The nullity of the accessory obligation or of the penal clause does carries with it the
nullity of the principal obligation which remains in force and demandable. Determine whether: (Phil
CPA, 94-1)
General Feedback
Statement I is true but statement II is false.
In a written contract the true intention of the parties was not reflected therein through the fraud committed
by one of them, which fraud prevented a meeting of the minds. The applicable remedy would be
General Feedback
Annulment of the contract
Reluctantly and against her good sense and judgment, Rosemarie entered for the delivery of 5 tables to
Corazon for a price of P15,000. Contract is: (Phil CPA, 93-1; 97-1)
General Feedback
Valid
law on sales - Nature, forms and requisites -

1. Alabang Shoe Store Incorporated (ASSI) entered into separate contracts with 2 movie stars, Kimi and
Honesto. With Kimi, the agreement was that the shoe store shall deliver at a specified date for a price
of P2,000 a pair of shoes of a specified brand which the store had been manufacturing for the general
public but which at the time of the contract had already been sold out, and with Honesto, the
arrangement was that the shoe store shall deliver at a specified date for a price of P3,000 a pair of
shoes to be made specifically for him, in accordance with a design submitted by him.

What is the nature of the contract between Kimi and ASSI?

General Feedback
Contract of sale

Alabang Shoe Store Incorporated (ASSI) entered into separate contracts with 2 movie stars, Kimi
and Honesto. With Kimi, the agreement was that the shoe store shall deliver at a specified date for a
price of P2,000 a pair of shoes of a specified brand which the store had been manufacturing for the
general public but which at the time of the contract had already been sold out, and with Honesto, the
arrangement was that the shoe store shall deliver at a specified date for a price of P3,000 a pair of
shoes to be made specifically for him, in accordance with a design submitted by him.
What is the nature of the contract between Honesto and ASSI?
General Feedback
Contract for a piece of work

2. A sum of money paid or a thing deliverd upon the making of a contract for thesale of goods to bind
the bargain the delivery and acceptance of which makes the final assent of both parties to the
contract
General Feedback
Earnest money
3. Under the Statute of Frauds, the following contracts must be in writing, otherwise they cannot be
enforced in court litigation except
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Sale of personal property at a price not less than P300.00
4. Option money is explained by the statements below except
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Part of the purchase price
5. The following are characteristics of a contract of sale aside from
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Unilateral
6. The following are examples of illicit things “by chance”n except
 Jueteng paraphernalia
 Expired medicine
 Marijuana
 None of the above
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Expired medicine
7. One has the right to transfer ownership if he/ she with the exception of
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Paid half of the total price
 8. Bo decided to buy a condominium in Bonifacio Global City and pays a reservation fee of P100,000.
Is the reservation fee earnest money or option money?
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Option money
9. Alabang Shoe Store Incorporated (ASSI) entered into separate contracts with 2 movie stars, Kimi and
Honesto. With Kimi, the agreement was that the shoe store shall deliver at a specified date for a price
of P2,000 a pair of shoes of a specified brand which the store had been manufacturing for the general
public but which at the time of the contract had already been sold out, and with Honesto, the
arrangement was that the shoe store shall deliver at a specified date for a price of P3,000 a pair of
shoes to be made specifically for him, in accordance with a design submitted by him.

What is the nature of the contract between Honesto and ASSI?

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Contract for a piece of work
10. Pedro has a land under litigation and agrees to sell it to Renel for 500,000 if he wins the case and
recovers said property. When the verdict was given, Pedro’s case lost and was not able to recover
his property. Is Pedro required to provide a replacement property to be sold to Renel?
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No, because their agreement is on the condition that he will only sell if he wins his the case
11. It refers to the money paid by the offeree to the offerer to bind the latter in case the offerer grants the
offeree the privilege to accept an offer within a certain period of time.
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Option money
12. When is the price in a contract of sale can be considered certain?
 All parties agreed on a specific amount
 Capable of being determined in money or its equal
 When there is no specific amount specified, price is left to the judgement of a specified
person or persons
 All of the above
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All of the above
13. Ronald transferred to Vincent a parcel of land for the price of P15,000,000. It was stipulated
in the contract that Vincent will pay P5, 000,000 in cash and for the balance, we will give a boat,
valued at approximately P10, 000,000. What kind of contract is this?
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Contract of barter
14. A contract of agency to sell can be considered when
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Only accounts for the proceeds of the sale he/she may make on the principal’s behalf
15. The following are the characteristics of a contract of sale, except:
 Principal, which means that a contract of sale can stand by itself.
 Real, which requires the delivery of the object of the contract of sale for its perfection
 Onerous, where rights are acquired in exchange of a valuable consideration.
 Bilateral, which means that both parties are bound reciprocal to each other.
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Real, which requires the delivery of the object of the contract of sale for its perfection
16. A contract of sale is except
 Nominate
 Onerous
 Reciprocal
  None of the above

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None of the above
17. Mrs. Lim agrees to sell his watch to Mr. Lomotan for P10, 000 in cash, and places the timepiece
inside the car of Mr. Lomotan, while he goes to an ATM to withdraw money. Before Mr. Lomotan
returns, Mr. Co arrives and claims ownership of the watch Presenting a document signed by Mr.
Lomotan selling the time piece to him. Mrs. Lim discards the claim asserting that she is still the
owner. In this situation, who is the rightful owner of the watch?
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Mrs. Lim, because Mr. Lomotan has not yet paid the agreed price
18. A contract of sale is
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Where title passes to the vendee upon delivery of the thing sold
19. Pedro has a land under litigation and agrees to sell it to Renel for 500,000 if he wins the case and
recovers said property. When the verdict was given, Pedro’s case lost and was not able to recover
his property. Is Pedro required to provide a replacement property to be sold to Renel?
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No, because their agreement is on the condition that he will only sell if he wins his the case
20. Quezon Bed Company (QBC) granted to Happy Sleep Incorporated (HSI) the exclusive right to sell
in North Luzon a certain number of beds which the company was manufacturing at the invoice price
of the beds in Manila, with a discount of 20%, the price to be paid at the end of 60 days. What
contract is perfect here?
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Contract of Agency
21. What is an option contract?
 An agreement granting a privilege to buy or sell with an agreed time period and a determined
price
 It is a separate contract from that which the parties may enter into upon the consummation of
the option
 It is and must be supported by consideration
 All of the above
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All of the above

The contract of sale must always have

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All of the above

One of the following is not a requisite of the object of a contract of sale. Which is it?
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Vendor must have the right to transfer the ownership of the thing at the time of sale.

22. A contract whereby one of the contracting parties obligates himself to transfer the ownership of and
to deliver a determinate thing and the other to pay therefore a price certain in money or its equivalent
is a contract of:
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Sale.
23. A thing can be considered determinate when
 It is standard and within the same classification
 Physically segregated from all others of the same class
  Is specific and is identified by its individuality
 B and C are correct

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B and C are correct
24. As to the presence or absence of conditions, a sale may be
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Conditional
25. Goods which form the subject of a contract of sale may be
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Illicit goods

Goods which form the subject of a contract of sale may be except

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Illicit goods

26. Bo decided to buy a condominium in Bonifacio Global City and pays a reservation fee of
P100,000. If Bo is suddenly in a financial bind, is she still bound to pay the balance of her
condominium after her reservation?
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No, because a reservation can be considered an option money for the reason that it may not be
refundable but it can be forfeited
27. Effect of price fixed by third person can be considered void excepts
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Third person adhere to the instructions laid down by parties involve
28. Earnest money means
 Bind between seller and buyer
 Partial payment of the buyer to the seller
 Proof of the perfection of the contract
 All of the above
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All of the above

law on sales - Rights / obligations of vendor and vendee

1. In Art 1490, a husband and wife, during marriage cannot sell property to each other except
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When separation of property was agreed upon in the marriage settlements
2. Gelo sold his Honda Civic to Jules, who immediately paid the price. Because the vehicle was at the
repair shop at the time, the contract was perfected but no delivery was made. Before delivery could
be made, Anton, a creditor of Gelo, who has filed a suit against him, attached the car.
What right has Jules over the Honda Civic?
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Jules’s acquired a personal right over the car. However, such right has become useless because of the
attachment of the vehicle by Anton, a creditor of Gelo
3. Legal delivery is _________ when, to effect the delivery, the parties use a token to represent the
thing delivered
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Symbolic
4. Which of the following statement is false
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Stoppage in transitu can be exercised by the unpaid seller if the buyer is insolvent and the vendor has
not yet parted with the thing sold
5. The ownership of the thing sold shall be transferred from the vendor to the vendee upon delivery
which may be done by
 Legal delivery
 Actual delivery
 Proof of agreement that possession is already transferred to the vendee
 All of the above
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All of the above
6. This mode of legal delivery happens when the vendee has already the possession of the thing sold by
virtue of another title as when the lessor sells the thing leased to the lessee
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Traditio brevi manu
7. It is a contract by which property is sold but the buyer, who becomes the owner of the property on
delivery, has the option to return the same to the seller instead of paying the price.
 Sale on trial
 Sale on satisfaction
 Sale on approval
 None of the above
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None of the above (Sale or return)
8. Contracts of sale or return can be considered when
 Subject to a resolutory condition
 Depends on the mind of the vendee
 The risk of loss is with the vendee
 All of the above
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All of the above
9. What title is acquired by the buyer if the object which he bought was sold by someone who is not the
owner thereof and who was not authorized to sell it?
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The buyer in such a case acquires no better title to the object the vendor had
10. This mode of delivery Is the opposite of traditio brevi manu. This takes place when the vendor
continues in possession of the property sold not as owner but in some other capacity.
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Traditio constitutum possessorium
11. In Art. 1493, if at the time the contra ct of sale is already perfected but the thing sold was partially lost, what
options does the vendee have over the vendor?

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Vendee may withdraw from the contract with the vendor
12. In Art 1490, a husband and wife, during marriage cannot sell property to each other except
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When separation of property was agreed upon in the marriage settlements
13. The principal obligations of the vendee are except
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To maintain the unit pending delivery
14. When goods are delivered to the vendee on ________________ to give him/her an option to return
goods instead of paying, the ownership passes to the buyer on delivery, but he/she may revest, the
ownership in the vendor by tendering the goods within the time fixed in the contract.
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Sale on satisfaction
15. In Art 1490, a husband and wife, during marriage cannot
I. Donate property to each other
II. Sell property to each other
III. Borrow proper from each other
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I and II are correct
16. What situations can be the buyer is exempted and in turn still acquire the object and claim
ownership?
 Where the true owner is estopped by his conduct from denying the vendor’s authority
to sell
 Where the sale is made by the registered owner in accordance with registration laws
 Where the purchase is made in a merchant’s store of markets, in accordance with the code of
commerce and special laws
 All of the above
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All of the above
17. In Art. 1493, if at the time the contra ct of sale is already perfected but the thing sold was entirely
lost? What are the options of the vendee?
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Vendee has no option available because the contract shall be without any effect
18. Gelo sold his Honda Civic to Jules, who immediately paid the price. Because the vehicle was at the
repair shop at the time, the contract was perfected but no delivery was made. Before delivery could
be made, Anton, a creditor of Gelo, who has filed a suit against him, attached the car.
Between Gelo, Jules & Anton, who is the rightful owner of the Honda Civic, during the time of
lawsuit?
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Jules, because he had already paid for the car
19. In Art 1491, the following cannot acquire by purchase even at a public auction, either in person or
through the mediation of another, except
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Agents who was given consent by the principal

law on sales - Warranties (in relation to consumer laws)

1. What are the implied warranties of the person who negotiates a document of title by delivery?
 Document is authentic or genuine
 Has the legal right to transfer
 Has the legal to negotiate
 All of the above
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All of the above
2. This is not an essential element of a contract of sale
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Warranty against eviction
3. This refers to the implied warranty on the part of the seller that he has the right to sell the thing at
the time when ownership is to pass, and that the buyer from that time shall have and enjoy legal and
peaceful possession of the thing.
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Warranty against eviction.
4. These are common forms of document of title except
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Promissory memo

law on sales - Installment sales -

1. At a mortgage foreclosure, a sale was carried out as a result of a judicial proceeding. Tessa, an
attorney for the mortgage creditor, bought the mortgaged property.
If Tessa bought the property for her client, did she violate the absolute terms of Art.1491 of the
NCC?
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No, because she would be merely acting as agent of her client
2. In a contract of sale of personal property the price of which in payable in instalments, what are the
possible remedies available to the vendor in case of breach?
 Demand completion of the of the obligation should the vendee fail to pay
 Cancel the sale if vendee fails to pay more the 2 months instalment
 Foreclose chattel mortgage on the thing sold
 All of the above
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All of the above
3. Paul sold a second hand car to Trish for P150, 000. The deal between Paul and Trish was the 50% of
the purchase price, of P75,000, shall be paid upon delivery of the car to Trish and the balance of
P75,000 shall be paid in 3 equal monthly instalments of P25,000 each. The car was delivered
to Trish, and she paid the amount of P75, 000 to Paul. Two weeks after, the car was stolen from
Trish’s garage with no fault on Trish’s part and was never recovered. Is Trish legally bound to
pay the unpaid balance of P75,000 to Paul?
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Yes, because ownership was already acquired by Trish the moment the car was delivered to her.
4. The Recto Law applies to which of the following examples of sale?
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Sale of a piano on installments where the buyer constituted a chattel mortgage on the piano .
5. Mike sold a motorcycle to Powee for P50,000 to be paid as follows: P30,000 upon delivery of the
motorcycle to Powee, and the balance at the rate of P5,000 per month until paid in full. The
motorcycle, however, was burned in the possession of Powee without his fault, before the balance
was paid in full. Is Powee obliged to pay the balance?
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Yes, given that the ownership was already transmitted to him upon delivery
 6. One of the following is not an alternative remedy available to a seller of personal property on
installment if buyer defaults
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To take possession of the property and forfeit the amount paid by the buyer
7. At a mortgage foreclosure, a sale was carried out as a result of a judicial proceeding. Tessa, an
attorney for the mortgage creditor, bought the mortgaged property. If she bought it for herself,
is the sale void or voidable?
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Yes, because is it prohibited by the law