MIDTERM EXAMINATION

LAW ON OBLIGATIONS AND CONTRACTS

GENERAL INSTRUCTIONS: Select the BEST answer for each of the following questions by shading the letter of your
choice on the answer sheet provided. Mark only one answer. NO ERASURES ARE ALLOWED.

1. It is one of the essential elements of an obligation

a. A maker or drawer c. A drawee
b. An object or prestation c. Money

2. A is obliged to deliver a Rolex watch to B on December 1, 2009.

a. Before December 1, 2009, A has to take care of the Seiko watch with the diligence of a good father of the family.
b. In case of loss of the Seiko watch by negligence of A, A is liable in damages.
c. A is not required to exercise the diligence of a good father of a family.
d. The obligation of A to B is not valid.

3. A is obliged to deliver to B one of his three (3) cars.

a. The obligation is not valid because the object is not determined.
b. The obligation is valid because the object is determinable.
c. The obligation is valid. B can choose which one of the 3 cars.
d. The obligation is valid because there is consent between A and B.

4. In an obligation to deliver a generic thing:

a. The debtor is not liable for fraud or delay or negligence in the performance of the obligation.
b. The debtor can choose which thing pertaining to the class to deliver.
c. The creditor has the right of choice.
d. Loss by fortuitous event extinguishes the obligation.

5. Statement 1. Accessions are necessary to the principal thing.

Statement 2. Accessories are not necessary to the principal thing but both must go together.
a. True; False c. False; True
b. Both statements are true. d. Both statements are false.

6. A binds himself to pay B P1,000 on December 10, 2011.

a. If December 10 has elapsed but A has not paid B, A is in delay.
b. A shall be liable to pay B P1,000 plus legal interests.
c. If the P1,000 is lost by fortuitous event the obligation is extinguished.
d. A is not in delay unless B has made a demand.

7. A agreed to B not to construct a fence between their 2 houses.

a. The obligation is not valid. c. This is a negative real obligation.
b. This is valid but cannot be enforced. d. A will never be in delay.

8. When a debtor is in delay:

a. He is liable for damages. c. He is liable even for fortuitous event.
b. All of the above. d. None of the above.

9. A source of liability is:

a. Dolo causante c. Pare delicto
b. Dolo incidente d. Culpa aquiliana

10. Statement 1. If the law or contract does not state the diligence which is to be observed in the performance of the
obligation, neither party is liable for negligence.
Statement 2. If a party is negligent and at the same time in bad faith, he shall be liable for damages by reason of fraud.
a. True; False c. False; True
b. Both statements are true. d. Both statements are false.

11. A binds himself to give B, P1,000 if B sells A’s car and P2,000 if B will kill C.
a. The obligation is null and void.
b. The obligation is partly valid and partly null and void.
c. The obligation is null and void because the first condition is potestative and the second is contrary to law.
d. The obligation is partly subject to a period and partly conditional.

12. Statement 1. A potestative period does not make an obligation void.

Statement 2. A potestative condition does not necessarily make an obligation void.
a. Both statements are true. c. Both statements are false.
b. True; False d. False; True

13. A owes B P10,000 to be paid after one year. As security A mortgages his car in favor of B. If before due date the car is
lost by fortuitous event:
a. A does not lose the benefit of the period because no one shall be liable for fortuitous event.
b. A does not lose the benefit of the period if he gives another security equally satisfactory.
c. A does not lose the benefit of the period because it was not stipulated.
d. A does not lose the benefit of the period because he is not in delay.

14. In a reciprocal obligation, the remedy of the injured party is:

a. Alternative c. All of the above
b. Cumulative d. None of the above.
 15. In case both parties have committed a breach of the obligation:
a. The second infractor may choose between rescission or fulfillment.
b. The first infractor is more is more liable than the second.
c. Each party must bear his own damage.
d. The liability of the first infractor shall be equitably tempered by the courts.

16. Statement 1. A period cannot prevent the fulfillment of an obligation.

Statement 2. A condition may prevent the fulfillment of the obligation.
a. True; False c. False; True
b. Both statements are true. d. Both statements are false.

17. Statement 1. In an alternative obligation either party may choose as to who has the right of choice.
Statement 2. If it is the creditor who has the right of choice, he loses his choice if all the prestations are alternatively
lost by fault of the debtor.
a. True; False c. False; True
b. Both statements are true. d. Both statements are false.

18. A and B by their joint act of negligence caused damage to X in the sum of P10,000.
a. The obligation is joint because A and B acted jointly.
b. The obligation is joint because there is plurality of debtors.
c. The obligation is solidary because the law so provides.
d. The obligation is solidary because either A or B is liable for the full amount.

19. This person is liable for the loss of the subject matter by fortuitous event.
a. Creditor c. Both A and B
b. Debtor d. None of them.

20. One is not a requisite in order that obligation shall be extinguished by loss or destruction of the thing due:
a. When the thing is lost without the fault of the debtor.
b. When the thing lost is generic
c. When the thing is lost before the debtor has incurred in delay.
d. When the thing lost is specific

21. The obligation is demandable on the date of the obligation and shall continue in force up to the arrival of the day
certain.
a. In diem period c. Resolutory Condition
b. Ex die period d. Suspensive Condition

22. Article 1251 gives the rules regarding the place for the payment of an obligation without prejudice to venue under the
Rules of Court.
I. If there is a stipulation, the payment shall be made in the place designated.
II. If there is a stipulation and the thing to be delivered is specific, the payment shall be made at the place where the
thing was, at the perfection of the contract.
III. If there is no stipulation and the thing to be delivered is generic, the place of payment shall be the domicile of the
debtor.
a. I, II and III c. II and III only
b. I and II only d. I and III only

23. I. As a general rule, in an obligation with a penal clause, the penalty takes the place of the indemnity for
damages and the payment of interests in case of non-compliance.
II. Proof of actual damages suffered by the creditor is necessary in order that the penalty may be enforced.
a. True; True c. True; False
b. False; True d. False; False

24. I. The nullity of the penal clause does not carry with it that of the principal obligation.
II. The nullity of the principal obligation carries with it that of the penal clause.
a. True; True c. True; False
b. False; True d. False; False

25. 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. X can collect from C P8,000.00. c. X can collect from C P4,000.00.
b. X can collect from C P12,000.00 d. X can collect nothing from

26. One of the distinctions between a facultative obligation and an alternative obligation is that in an alternative obligation:
a. Only one thing is principally due.
b. The right of choice belongs to the debtor alone.
c. If the obligation to give a principal thing is void, the obligation to give the substitute is also void.
d. If all prestations except one are impossible, that which is possible must still be given.

27. The following are characteristics of a facultative obligation, except:

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.

28. 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?
 a. P12,000.00 plus damages for delay. c. P8,000.00 plus damages for delay.
b. P4,000.00 plus damages for delay. d. P4,000.00 without any damages.

29. D is obliged to deliver either a specific bracelet, a specific necklace or a specific ring to C. No mention was made in the
agreement of the parties as to who has the right of choice. Before due date, C wrote D informing the latter that he (C)
preferred that the ring be delivered to him. D received the letter but did not give any response to C. Subsequently, the
ring was lost through a fortuitous event.
a. D`s obligation to C is extinguished by fortuitous event.
b. D is obliged to pay damages to C because he was in default when he did not respond to the letter.
c. D`s obligation is not extinguished as he may deliver either the bracelet or the necklace.
d. D`s obligation became a simple obligation when C informed D of his (C`s) preference on the object to be given to
him.

30. Three of the following are the characteristics of a condition. Which is the exception?
a. It may or may not happen
b. It may refer to the future
c. It merely fixes the time for the efficaciousness of an obligation
d. It may refer to a past event unknown to the parties

31. On May 1, 2018, D executed a written undertaking obliging himself to deliver 100 sacks of rice to C on May 31, 2018. On
May 28, 2018, C demanded the delivery of 100 sacks of rice from D but D did not comply. The following day, a fire of
undetermined origin destroyed D`s warehouse together with about 500 sacks of rice stored therein and from which D
intended to get 100 sacks of rice for delivery to
a. D`s obligation to deliver 100 sacks of rice to C is extinguished, the cause of the loss being a fortuitous event.
b. D`s obligation to deliver 100 sacks of rice to C is not extinguished because he can get 100 sacks of rice from
other sources.
c. D`s obligation to deliver 100 sacks of rice to C is not extinguished because D was in defaults.
d. D`s obligation is to pay damages because he was in default.

32. A, B, C and D obliged to give V, W, X, Y and Z P20,000.00.

a. V may collect from A, P20,000.00 c. V may collect from A, P5,000.00
b. V may collect from A, P1,000.00 d. V may collect from A, P4,000.00

33. A, B, C and D, joint debtors, are obliged give V, W, X, Y and Z, solidary creditors, P20,000.00.
a. V may collect from A, P20,000.00 c. V may collect from A, P4,000.00
b. V may collect from A, P5,000.00 d. V may collect from A, P1,000.00

34. A, B, C and D, solidary debtors, are obliged give V, W, X, Y and Z, joint creditors, P20,000.00.
a. V may collect from A, P20,000.00 c. V may collect from A, P4,000.00
b. V may collect from A, P5,000.00 d. V may collect from A, P1,000.00

35. D obliged himself to give P50,000.00 to C if C does not fly to the moon.
a. The obligation is immediately demandable.
b. Both the obligation and the condition are void.
c. The condition of an obligation is physically impossible.
d. The obligation becomes demandable at some future time.

36. It is not a source of liability which will entitle the injured party to damages:
a. Culpa aquiliana or negligence committed in the performance of a spontaneous act.
b. Mora or delay.
c. Dishonesty, malice or bad faith in the performance of an existing valid obligation.
d. Contravention of the tenor of obligation.

37. These statements are presented to you:

I. A quasi-contract is an implied contract
II.There is no delay in obligation not to do.
In your evaluation of the foregoing statements:
a. Both statements are true. c. Both statements are false.
b. Only statement I is true. d. Only statement I is false.

38. Which of the following is not considered as a conditional obligation?

a. D to pay C P5,000.00 if D wants.
b. D to pay C P5,000.00 if C marries Y.
c. D to pay C P5,000.00 if C tops the CPA Board Examinations.
d. D to pay C if X dies of malaria.

39. Salas and Benjamin entered into a contract whereby Salas would deliver 5 pieces of genuine Rolex wristwatches to
Benjamin. Salas proposed to Benjamin that should Salas deliver 5 units of fake pieces of Rolex wristwatches by reason of
financial difficulties on his part, Benjamin would not sue him for damages on the ground of fraud. Benjamin accepted the
proposal. On due date, Salas delivered 5 pieces of fake Rolex wristwatches. Upon discovery of the fraud, Benjamin sues
Salas for damages. Salas contends that he cannot be held liable for damages because Benjamin waived his right to hold
him (Salas) liable on the ground of fraud if the reason thereof is the financial difficulties of Salas:
a. Benjamin cannot sue Salas for damages because the reason for the waiver is valid, i.e., financial difficulties of Salas,
which is a valid reason for the waiver.
b. Benjamin can sue Salas for the annulment of the contract since it is voidable
c. Benjamin can sue Salas for damages because the waiver he made is void. Nonetheless, the contract is valid.
d. Benjamin can sue Salas for the rescission of the contract since it is rescissible.

40. The absence of stipulation on liability in case of fortuitous event is generally to the advantage of the:
 a. Debtor c. Creditor
b. Both the debtor and the creditor d. Neither the debtor and the creditor

41. On June 1, 2019, Demetrio obtained a loan of P100,000.00 from Cornelio. The loan, which is payable on or before June 1,
2020, is secured by a chattel mortgage on Demetrio`s brand-new Toyota car with plate number XYZ 123. On February 1,
2020, while Demetrio was opening the trunk of his car at the parking lot of a grocery store to place the groceries he had
just purchased, three unidentified men approached him and took his car at gunpoint. He reported the carnapping to the
authorities but his car has not been recovered.
a. Cornelio may demand immediate payment of the loan unless Demetrio gives another security therefor.
b. Cornelio may demand payment only on June 1, 2020 because Demetrio has the benefit of the period and the loss of
the car was due to force majeure.
c. Cornelio may no longer demand payment since the loan was extinguished by reason of the loss of the car due to
fortuitous event.
d. Cornelio may demand immediate payment even if Demetrio offers another security because the car is determinate
and could not be replaced.

42. The following obligations are demandable at once, except:

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.

43. Orlando brought his typewriter at the shop of Remigio for repair. Orlando made several demands for the repair of work
to be done but Remigio did not undertake the repairs. Eventually, Remigio returned the typewriter, unrepaired and with
several parts mssing.
I. Orlando can have the typewriter repaired by another repairs shop with the repair cost thereof chargeable to
Remigio.
II. Orlando can compel Remigio to undertake the repairs.
III. Orlando can ask for damages for the missing parts of the typewriter at the expense of Remigio.

Which of the above remedies may be availed of by Orlando?

a. I and II c. II and III
b. I and III d. All of I, II and III

44. The kind of fraud which renders a contract voidable is

a. Causal fraud c. Incidental fraud
b. Fraud in performance d. Future fraud

45. A, B and C are solidary debtors of X in the amount of P60,000.00. A, however, was a minor at the time the obligation was
constituted. If X sues B, B will be liable to X for:
a. 60,000.00 c. 40,000.00
b. 20,000.00 d. 30,000.00

46. Bryan borrowed from Bank of China 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, Bryan
must pay Bank of China:
a. P2,000,000.00 c. P5,000,000.00
b. P800,000.00 d. P20,000,000.00

47. Milliones, the owner of sarisari store, purchased several bags of “Bobot” and “Tiratira” candies worth P20,000.00 from
Muslimen, an authorized dealer of the product. On the due date, Milliones who sells the candies at P1.00 each, tendered
his payment to Muslimen consisting of 5,000.00 pieces of P1.00 coins.
a. Muslimen may refuse to accept the payment and demand that she be paid in bills.
b. Muslimen may not refuse to accept the payment because what Milliones was offering as payment is money
circulated in the Philippines.
c. Milliones may consign the payment in court if Muslimen refuses to accept it.
d. The tender made by Milliones was valid because the P1.00 coins came from her sales and she had plenty of them.

48. Yvonne is indebted to Regine for P100,000.00 which is already due. Yvonne offers to give certified check to Regine to
settle the debt.
a. If Regine refuses to accept the check, Yvonne may resort to its consignation to settle the obligation,
b. If Regine refuses to accept the check, Yvonne may replace the check with 100,000 pieces of P1.00 coin and compel
Regine to accept it.
c. If Regine refuses to accept the check, Yvonne may replace the check with 5,000 pieces of P20.00 bill and if
Regine refuses to accept it, Yvonne may consign the payment.
d. If Regine accepts the certified check, this obligation is automatically extinguished.

49. Almira, the owner of an apartment, leased the premises to Ryan. The terms of the lease provide for a monthly rental of
P6,000.00 which Ryan must pay at the residence of Almira about two blocks from the apartment. For the month of
December , Ryan went to the residence of Almira but the latter was not around to receive the payment. Not wanting to
go back, Ryan left the payment with Arsad, a neighbour of Almira, who promised to give the payment to Almira.
However, Arsad spent the amount he received for himself. Based on the foregoing facts, which of the following is
incorrect?
a. The payment by Ryan is not valid because Arsad was not authorized to receive the payment.
b. The payment by Ryan to Arsad is valid since the latter is a neighbour of Almira.
c. Almira can demand payment from Ryan for the December rental.
d. Ryan can go after Arsad for the amount misspent by Arsad.

50. Which of the following is a remedy of the creditor to enforce payment of his claims against the debtor?
 a. Pursue the property in the possession of the debtor including those exempt by law.
b. Exercise all the rights and bring all the actions of the debtor including those personal to him.
c. Impugn the acts which the debtor may have done to defraud his creditors.
d. All of the above.

51. Which of the following is an indivisible obligation?

a. Divine to give a rendition tonight of Whitney Houston`s “Listen” in a concert at MOA Arena.
b. Radzak to construct a pavement of SCC measuring 2 meters wide and 10 meters long.
c. Ronel to lecture for 5 Saturdays in a Law on Obligation and Contract review.
d. Bryan to pay a loan obligation of P100,000.00 in 10 equal monthly instalments.

52. Jezon, a depositor of China Bank, visited the branch of the bank at Quezon Avenue to withdraw from its A utomated
Teller Machine (ATM). After pressing correctly the amount P500.00, the machine dispensed 10 pieces of P500 bills or a
total of P5,000.00. The receipt released by the ATM showed the only P500.00 was withdrawn.
a. Jezon does not have to return the excess of P4,500.00 because it was not his fault that the ATM would dispensed
more than what he wanted to withdraw.
b. Jezon does not have to return the excess of P500.00 because the receipt did not indicated that the said amount was
withdrawn.
c. Jezon must return the excess the return of P4,500.00 because it was the case of payment that was not due.
d. Jezon must return the excess of P4,500.00 because the bank will likely discover that he was the one using
the ATM when the overpayment was made.

53. D is obliged to deliver 20 sacks of Dinorado rice to C. The parties agreed that should D fail to perform his obligation as
stipulated, D will pay a penalty of P1,000.00. On due date, D made a delivery of 20 sacks of rice, but each sack contain a
mixture of Dinorado and another variety lower quality. C discovered the fraud.
a. C may demand the payment of the stipulated penalty only.
b. C may demand the payment of the stipulated penalty as well as the damages although there no stipulation
in the latter.
c. C may demand the payment of damages in addition to the stipulated penalty only if there was stipulation with
respect to damages.
d. C may demand of damages in addition to stipulated penalty only of D refuses to pay the penalty.

54. I. Payment made by a third person who does not intend to be reimbursed by the debtor is deemed to be a donation,
which requires the debtor’s consent. But the payment is in any case valid as to the creditor who has accepted it.
II. Whoever pays on behalf of the debtor without the knowledge or against the will of the latter can compel the creditor
to subrogate him in his rights, such as those arising from a mortgage, guaranty, or penalty.
a. True; True c. True; False
b. False; True d. False; False

55. Thru some mistake on the part of a bank personnel, A was given One Million Pesos instead of One Thousand Pesos. This
situation will be governed by the provisions on:
a. Contracts d. Quasi-delicts
b. Quasi-contracts d. Law

56. Which of the following is not an obligation arising from law?

a. Delict c. Quasi-delict
b. Quasi-contract d. Contract

57. Jo owes John the following debts:

Debt 1 – P10,000 payable January 1, 2011
Debt 2 – P10,000 payable February 1, 2011
Debt 3 – P10,000 payable March 1, 2011
Debt 4 – P10,000 payable April 1, 2011
Suppose Jo pays John P10,000 on February 1, 2011 without stipulating to which debt his payment shall be applied. To
which of the following debt can he have his payment applied?
a. Debt 1 c. Debt 3
b. Debt 2 d. Debt 4

58. Del, a resident of Perez St., Dagupan City, Pangasinan, owes Cony a resident of Sampaloc, Manila, P20,000 and the
contract fails to stipulate the place of payment. The place of payment must be:
a. Wherever they may see each other upon the maturity of the debt.
b. In Sampaloc, Manila
c. Anywhere in Dagupan
d. In the domicile of Del in Perez St., Dagupan City

59. Which of the following is not a special mode of payment?

a. Adjudicacion en pago c. Tender of payment
b. Payment by cession d. application of payment

60. Debtor Beth in indebted to Jane, Karla and Babe a total amount of P300,000 made up of: Jane – P100,000; Karla –
P50,000 and Babe – P150,000. On maturity, Beth cannot pay his obligation so he assigns or cedes to them all his
property, to be sold by the creditors and the proceeds thereof applied to their corresponding credits. The creditor’s sold
Beth’s properties for only a total of P180,000. Is the obligation of Beth extinguished? Decide.
a. Yes, the obligation is extinguished.
b. Jane, Babe and Karla will divide the P180,000 equally.
c. Jane will get P60,000; Karla – P30,000; and Babe – P90,000.
d. None of the above.

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