UNIVERSITY OF SAN JOSE-RECOLETOS

Cebu City

Obligations and Contracts Mock Departmental Exam Atty. Esteban C. Pascua, CPA, JD

1. S sold his only car for P100,000.00 to B. Unknown to S, B bought the car from him
so that he could use the same in a bank robbery. What is the status of the sale of
the car by S to B?
a. The sale is voidable because of the failure of disclose his motive to S.
b. The sale is valid because the illegality of the motive of the parties to the contract
does not have any effect on its validity.
c. The sale is void because the motive of B is illegal.
d. The sale is rescissible at the instance of S would be damaged by the illegal motive of
B.

2. The action for annulment must be brought within four years. Which of the following
is false with respect to the reckoning of the beginning of the prescriptive period?
a. In cases of intimidation, violence and undue influence, the period begins from the
time the defect in the consent ceases.
b. In case of mistake, the period begins to run from the time it was committed.
c. In case of fraud, the period begins to run from the discovery thereof.
d. In cases of contracts entered into by minors or other incapacitated persons, the
period runs from the time guardianship ceases.

3. When bilateral contracts are vitiated with vices of consent, they are rendered.
a. Rescissible c. Void
b. Voidable d. Unenforceable

4. If some stipulation of any contract should admit of several meanings, it shall be

understood as bearing that import which is most adequate to render it effectual.
a. True b. False

5. The various stipulations of a contract shall be interpreted together, attributing to the

doubtful ones that sense which may result from all of them taken jointly.
a. True b. False

6. The following, except one, are the characteristics of void or inexistent contract.
Which is the exception?
a. They are not subject to ratification
b. The action or defense for declaration of the nullity or inexistence of the contract does
not prescribe.
c. The right to raise defense of illegality cannot be waived.
d. The defense of illegality of the contract is available to third persons whose interest is
not directly affected.

7. It is the act of making intelligible what was before not understood, ambiguous, or not
obvious.
a. Interpretation c. Ratification
b. Annulment d. REformation

8. Caloy the guardian of Martinez bought a fertilizer for land cultivation from Jonas for
P400,000 but the market value is only P320,000. The contract is:
a. Voidable c. Rescissible
b. Valid d. Unenforceable

9. Which of the following contracts is rescissible?

a. Those which are entered into by guardians whenever the wards whom they represent
suffer a lesion of more than 1/4 of the value of the object of the contract,
b. Those which are absolutely simulated or fictitious.
c. Those where one of the parties is incapable of giving consent to a contract,
d. Those where both parties are incapable of giving consent to a contract.

10. Three of the following are void contracts. Which is the exception?
a. Absolutely simulated contracts
b. Contracts where the causa is immoral
c. Contracts to prevent a known supporter of a political rival from voting for his
candidate for a valuable consideration
d. Contracts with valid consideration but with unlawful motives

11. The Statute of Frauds applies only to:

a. wholly executory contracts.
b. contracts wholly or partially executed on the part of the creditor
c. wholly executed contracts.
d. contracts wholly or partially executed on the part of the debtor.

12. The rule is that where the language of a contract is plain and unambiguous, its
meaning should be determined without reference to extrinsic facts or aids.
a. True b. False

13. Where the language of a written contract is clear and unambiguous, the contract
must be taken that which, on its face, it purports to mean, unless some good reason
can be assigned to show that the words should be understood in a different sense.
a. True b. False

14. The following agreements are covered by the Statute of Fraud. Choose the
exception.
a. An oral contract of partnership where the contribution in money or personal property
amounts to P3,000 or more.
b. An oral special promise to answer for the debt, default or miscarriage of another.
c. An oral agreement which by its terms is not to be performed within one year from
the making thereof.
d. None of the choices.

15. Orencia is the owner of a car which was sold by Say without authorization in favor of
Billy. The contract between Say and Billy in so far as Orencia is concerned is
a. Voidable c. Unenforceable
b. Valid d. Rescissible

16. The action for annulment on the ground of fraud shall be brought with 4
years from the time of the perfection of contract.
a. True b. False

17. Misrepresentation made in good faith is not fraudulent but may constitute error.
a. True b. False

18. Rescission implies that there is a contract that, while initially valid, produces a lesion
or pecuniary damage to someone.
a. True b. False

19. Elementary is the principle that the validity of a contract precludes its rescission.
a. True b. False

20. Which of the following contracts cannot be ratified?

a. Unauthorized contracts
b. Those whose cause or object did not exist at the time of the transaction.
c. Those that fail to comply with the Statute of Frauds.
d. Those where both parties are incapable of giving consent.

21. Andy is the representative of Babes, an absentee sells a house and lot valued at
P1,000,000 for only P600,000. The contract is:
a. Rescissible c. Voidable
b. Valid d. Unenforceable

22. The usage or custom of the place shall be borne in mind in the interpretation of the
ambiguities of a contract and shall fill the omission of stipulations which are
ordinarily established.
a. True b. False

23. The interpretation of obscure words or stipulations in a contract shall favor the party
who caused the obscurity.
a. True b. False

24. In order to judge the intention of the contracting parties, only their preceding acts
shall be considered.
a. True b. False

25. However general terms of a contract may be, they shall not be understood to
comprehend things that are distinct and cases that are different from those upon
which the parties intended to agree.
a. True b. False

26. 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?
a. Where one of the parties to the contract dies and thereafter a suit is filed on the
basis of the contract.
b. Where the obligations arising from contract are not transmissible by stipulation or by
provision of law.
c. Where the obligations arising from contract are not transmissible by their nature.
d. Where there is a stipulation in favor of a third party

27. Is a remedy granted by law to the contracting parties and even to third persons, to
secure the reparation of damages caused to them by a contract even if this should
be valid, by restoration of things to their condition at the moment prior to the
celebration of the contract?
a. Ratification c. Rescission
b. Annulment d. Enforcement

28. It entails the return of the benefits that each party may have received as a result of
the contract.
a. Ratification c. Annulment
b. Rescission d. Mutual restitution

29. A court's purpose in examining a contract is to interpret the intent of the contracting
parties, as objectively manifested by them.
a. True b. False

30. A contract provision is ambiguous if it is susceptible of two reasonable alternative

interpretations.
a. True b. False
31. A natural obligation under the New Civil Code of the Philippines is one which
a. the obligor has a moral obligation to do, otherwise entitling the obligee to
damages.
b. refers to an obligation in writing to do or not to do.
c. the obligee may enforce through the court if violated by the obligor.
d. cannot be judicially enforced but authorizes the obligee to retain the obligor’s
payment or performance.

32. Which is not considered as quasi contract?

a. Solution indebito
b. Negotiorum gestio
c. When the third person with the knowledge of the debtor, pays the debt
d. Reimbursement due the person who saved property during fire or typhoon
without the knowledge of the owner.

33. When A voluntarily takes charge of the neglected business of B with the latter’s
authority where reimbursement must be made for necessary and useful expenses,
there is a:
a. Contract of agency c. Negotiorum Gestio
b. Quasi contract d. Solutio Indebiti

34. Obligations may arise from any of the following, except:

a. Contracts c. Law.
b. Quasi-contracts. d. Prestation.

35. Payment shall be made to, except:

a. Obligee c. Obligor
b. Creditor’s assignee d. Executor of the deceased

36. It is a claim or title to an interest in anything whatsoever that is enforceable by

law.
a. Right c. Receivable
b. Warranty d. Property

37. It is the act or omission by which a party violates a right of another.

a. Cause of action c. Motive of action
b. Reason of action d. Source of action
38. It refers to an act or omission which causes damage to another, there being fault
or negligence. The parties has no pre-existing contractual relation.
a. Quasi-contract c. Quasi-delict
b. Solutio indebit d. Negotiorum gestio
39. The following are sources of our laws, except:
a. Constitution c. Judiciary
b. Contracts d. Legislative
40. Three of the following are requisites of cession in payment. Which is the exception?
a. One debtor and one creditor c.
b. Complete or partial insolvency
c. More than one debt
d. Abandonment of all debtor's property not exempt from execution

41. To which of these modes of special payment is the law on sales applicable?
a. Dacion en pago c. Tender of payment and considnation
b. Cession en pago d. Application of payment

42. A thing is loss in the following cases. Which is the exception?

a. When the object is perishes c. When the object goes out of commerce
b. When the object disappears. d. When the object is diminish its value
43. Which of the following is not an element of Compensation:
a. Debts to be compensated are due and demandable.
b. There is controversy or adverse claim over any debts to be compensated.
c. There are two or more debts of the same kind.
d. There are two persons who are creditors and debtors of each other.
44. Which of the following is not really a special payment
a. Dation in payment c. Application for payment
b. Payment by cession d. Tender of payment and consignation

45. Which of the following is not legal subrogation?

a. When a creditor pays another creditor who is preferred
b. When a third person, not interested in obligation, pays with the approval of
the debtor
c. When a third person interested in the obligation, pays even without the
approval of the debtor
d. None of them
46. A, B, C, and D solidary debtors, are obliged to give V, W, X, Y and Z, solidary
creditors, P78,000;
a. V may collect from D P78,000
b. V may collect from D P19,500
c. V may collect from D P15,600
d. V may collect from D P58,000
47. A, B, C, and D are joint creditors of X and Y, solidary debtors, in the amount of
P80,000. How much can A, B and C collect from X?
a. A, B and C could collect P40,000 from X
b. A, B and C could collect P60,000 from X
c. A, B and C could collect all the P80,000 from X
d. A, B and C could collect P40,000 from X and P20,000 from Y
48. It may be defined as a tie or vinculum among several creditors of one and the
same obligation.
a. Passive solidarity c. Mixed solidarity
b. Active solidarity d. None of the above
49. I Indivisibility exists even if there is only one debtor and one creditor.
II Solidarity exists even if there are two or more debtors and two or more creditors.
a. Only I is true c. Both are true
b. Only II is true d. Both are false
50. The obligation is extinguished from the time the characters of creditor and debtor are
merged in the same person.
a. Confusion c. Remission
b. Novation d. Compensation

MERRY CHRISTMAS TO ALL AND A PROSPEROUS NEW YEAR!!!

Good luck to your Departmental Examinations.