Assumption College of Nabunturan

Arellano St. Poblacion Nabunturan Compostela Valley Province

Bus Law 1 : Law on Obligations and Contracts

Prelim Exam
Name:________________________________ Course and year:______________________
I. Encircle the letter of your choice.
1. The juridical necessity to give, to do or not to do refers to:
a. social obligation. c. moral obligation.
b. civil obligation. d. natural obligation.
2. Which of the following is not an element of a civil obligation?.
a. Active subject c. Prestation.
b. Passive subject. d. Sufficient cause.
3. The active subject of an obligation is also known as:
a. debtor. c. obligee.
b. obligor. d. debtor.
4. The passive subject of an obligation is also known as:
a. creditor c. object.
b. obligee. d. debtor.
5. The prestation of an obligation is also known as:
a. subject matter. c. creditor.
b. debtor. d. efficient cause.
6. The efficient cause of an obligation is also known as:
a. active subject. c. subject matter.
b. passive subject. d. legal tie.
7. A civil obligation differs from natural obligation in that in a civil obligation:
a. the obligation is enforceable by court action.
b. the obligation exists in equity and moral justice.
c. if payment is voluntarily made although it was no longer required, the same can no longer be
recovered.
d. there is no juridical necessity to perform it.
8. The obligation of a husband and wife to love and support each other is an obligation arising from:
a. contract. c. quasi-contract.
b. law. d. agreement.
9. F and M are the parents of S, a government employee who is married to D. F is an employee of a private
Firm, while M is a housewife. While S was out-of-town assignment, D was brought to the hospital for
Medical treatment by F and M, her parents-in-law. The hospital wants to collect now from F and M for the
medical expenses.
a. Only F is liable because he is the one employed.
b. Both F and M are liable because it was they who brought D to the hospital.
c. Only S, the husband of D, is liable as he is the one obliged by law to support his wife.
d. The three of them is liable because they belong to the same family and are obligated by law
to support D.
10. The following are obligations imposed by law, except:
a. Obligation to support one’s spouse and children.
b. Obligation to pay license fees before one can engage in business.
b. Obligation to pay tuition fees to a school where one is enrolled.
d. Obligation to take the CPA Licensure Examination before one can practice public accounting.
11. These statements are presented to you:
I. A quasi-contract is an implied contract.
II. A contract is the result of the conformity of wills of the parties.
In your evaluation of the foregoing statements:
a. Both statements are true. C. Only Statement I is true.
b. Both statements are false. d. Only Statement II is true.
12. D stole the carabao of C. D was arrested, tried and convicted. He was ordered by the court to return the carabao.
D’s obligation to return the carabao is an obligation arising from:
a. quasi-contract. c. crime.
b. quasi-delict. d. law.
13. Refer to the preceding number. Before D could return the carabao, it fell into a ravine without his fault and
died.
which of the following statements is incorrect?
a. D’s obligation to C is extinguished because the loss is due to fortuitous event.
b. D must still pay for the value of the carabao.
c. D must pay for consequential damages even if the carabao was not lost.
d. D may be imposed a prison term or other penalty even if the carabao was not lost.
14. D and his playmates were playing baseball on a vacant lot. When D took the bat, he struck so hard that the ball
flew and broke the glass window of N, his neighbor. In this case, D shall be liable to N for damages arising from:
a. quasi-delict. c. crime.
b. quasi-contract. d. D is not liable at all, because the damage to the window
accidental.
15. D, 30 years old, asked B, a 10-year old boy, to climb a coconut tree with a promise to give him P5.00 for every
coconut picked. B climbed the three but fell and died. D is obliged to pay damages to the heirs of B on the basis of:
a. quasi-delict.
b. quasi-contract.
c. acts and omissions punished by law.
d. D is not liable because it was not through his negligence that B fell to his death.

Items 16-20 are based on the following data:

On August 1, 2017, D promised to give his agricultural lot to C if C passes the Bar Examination. C took the
Examination on September 20, 2017. The result of the examination was released on April 18, 2018 and C passed it.
16. The obligation of D to give his agricultural lot to C arose:
a. on August 1, 2017. c. on April 18, 2018.
b. on September 20, 2017. d. at any time after April 18, 2018 when D had taken
his oath as a new lawyer.
17. C shall be entitled to the crops (fruits) that had grown on the rice field starting from:
a. August 1, 2017.
b. September 20, 2017.
c. April 18, 2018.
d. the time when C has taken his oath as a new lawyer.

18. The right of C to demand the delivery of the agricultural lot and the crops from the time the obligation to
deliver the lot arose is known as:
a. real right. c. civil right.
b. personal right. d. natural right.
19. Assume that D actually delivered the agricultural lot and the crops to C on May 1, 2018. On such date, what
right was acquired by C over the agricultural lot and the crops?
a. real right. c. Civil right.
b. Personal right. d. Industrial right.
20. Assume that D actually delivered the agricultural lot and the crops on May 1, 2018 to X who bought them in
good faith. Which of the following statement is incorrect?
a. C can go after D for damages.
b. X acquired ownership of the agricultural lot and crops.
c. C shall have a right of action for damages against X.
d. No real right is acquired by C.
21. A person obliged to give a determinate thing is also obliged to take care of the thing with:
a. the good diligence of a father of a family.
b. the diligence of a father of a good family.
c. the diligence of a good father of a family.
d. extraordinary diligence.
22. A period is different from a condition in that a period:
a. may refer to a past event unknown to the parties.
 b. may or may not happen.
c. merely fixes the time when the obligation will arise or cease.
d. shall annul the obligation if it depends upon the sole will of the debtor and it is suspensive.
23. Demand is not required in order for delay to exist in the following cases, except when:
a. time was a controlling motive for the establishment of the contract.
b. demand is useless.
c. the law or the obligation expressly provides that demand is not required.
d. the obligation is silent as to whether demand is required or not for the performance of the obligation.
24. D is obliged to deliver a specific cell phone to C at the latter’s residence on March 1, 2018. On March 1, 2018, C
waited at his residence for the delivery of the cell phone but D did not deliver. On March 2, 2018, the cell phone
was destroyed in a fire that razed the store of D.
a. D will be liable for damages to C.
b. D was already in default at the time of the loss of the cell phone.
c. D’s obligation is extinguished.
d. No demand was required to be made by C upon D for the latter to be in default because a date was
provided for the performance of D’s obligation.
25. D is obliged to deliver 20 bottles of White Castle whisky to C. The parties agreed that should D commit fraud in
one way or another in the performance of his obligation, C would not sue him for damages. On due date, D
intentionally delivered to C 20 bottles of adulterated whisky. Upon learning of the fraud, C threatened to sue D for
damages.
a. C cannot sue D for damages on account of the fraud because he waived his right thereto.
b. C can still sue D for damages because the waiver made by C is void.
c. C can file an action for the annulment of the contract on the ground of fraud.
d. C can file an action for the declaration of the nullity of the contract.
26. D borrowed P100,000 from C. The debt, which bears interest at 10% per annum and is payable at the end of
one year, is evidenced by a promissory note which D executed and delivered to C. Two months before due date, C
died. He was survived by S, his only son and heir to whom the executor of D’s estate delivered the promissory note.
a. The credit right is transmitted to S; hence S can collect from D.
b. The credit right is not transmitted to S since it is purely personal; hence, S cannot collect from D.
c. The law prohibits the transmission of credit right; hence, S cannot collect from D.
d. The credit right is not transmitted to S because there was no stipulation to that effect; hence S cannot
collect from D.
27. D is obliged to give C P5,000 if C will photocopy a textbook written by X without the permission of X and the
publisher. The book is out stock and D needs the book immediately for his review course. C is able to photocopy
the book and gives it to D in bookbound form.
a. C may now demand the payment of P5,000.00 from D because the suspensive condition has been
fulfilled.
b. C cannot demand the payment of P5,000.00 from D even if he gives a photocopy of the textbook to D.
c. C may demand the payment of P5,000.00 from D because the textbook is a necessity on the part of D.
d. C may demand the payment of P5,000 from D because C was able to comply with his obligation under his
contract with D.
28. D is obliged to give C a house and lot if C will marry X within one year. Which of the following statements is
incorrect?
a. D’s obligation is extinguished if the one-year period expires without C having married X.
b. D’s obligation is extinguished if X dies before the one-year period expires without C having married X.
c. D’s obligation is demandable if C marries X within the one-year period.
d. D’s obligation is demandable if C marries X after the expiration of the one-year period.
29. On November 1, 2017, D obliged himself to give C an agricultural lot if C passes the May 22 to 28, 2018 CPA
Board Examination. The result of the CPA Board Examination was released on May 30, 2018 and C passed it. Based
on the foregoing data, which of the following statements is incorrect?
a. C shall be entitled to the agricultural lot beginning on November 1, 2017.
b. The fruits on the agricultural lot from November 1, 2017 up to May 29, 2018 shall pertain to D.
c. The fruits on the agricultural lot starting from May 30, 2018 shall pertain to C.
d. C shall be entitled to the agricultural lot beginning on May 30, 2017.
30. D agreed to give C a specific tractor if C would complete his course in Agriculture. C completed his course in the
Agriculture but D earlier had the tractor overhauled thereby improving its efficiency.
a. The improvement in the tractor shall inure to the benefit of C without any right on the part of D to
demand reimbursement.
 b. D and C must equally share in the cost of improvement.
c. C should reimburse D for the cost of the improvement.
d. D may withhold delivery of the tractor until he and C arrive at an agreement on how the cost of
improvement shall be divided between them.

II. Identification: Write your answers on the blank before the number.
_________________________1. A juridical relation arising from certain lawful, voluntary and unilateral acts, and
which has for its purpose the payment of indemnity to the end that no one shall be unjustly
enriched at the expense of another.
_________________________2. The return of what has been paid by mistake is known as..
_________________________3. The voluntary administration of the property, business or affairs of another without his
his consent.
_________________________4. It is a thing that is particularly designated or physically segregated from all others of the
same class.
_________________________5. They refer to the spontaneous products of the soil and the young and other products of
animals.
_________________________6. The rice, corn and other products of land that come into existence through the human
labor.
_________________________7. A condition, the happening of which extinguishes the obligation.
_________________________8. A condition, the happening of which establishes the obligation.
_________________________9. A condition, that depends upon the sole will of the contracting parties.
________________________10. The condition that some event happen at a determinate time.

III. Case Analysis : State your opinion on the following. (5pts. Each)

1. Cardo called ABC travel Agency (ABC) to book him for flight to Davao city on April 30, 2018 at 5:00 pm.
Cardo informed ABC that he was the scheduled guest speaker at the Accounting Convention on May 1, 2018 at
9:00 am and that he had to be in Davao city in the evening of April 30 in time for the convention. Per agreement,
ABC would deliver the plane ticket at the Manila Domestic Airport at 3:00 pm of April 30, at which time Cardo
would pay the cost of the plane ticket as has been their usual arrangement since Cardo was a regular customer of
ABC. On April 30, Cardo waited at the airport at the time agreed upon but no representative of ABC came to deliver
the plane ticket. As a result, Cardo missed his flight. Cardo now sued ABC for damages, but the latter maintained
that it should not be liable. Is ABC correct? Why? or Why not?

2. Gavino obtained a loan of P200,000 from Ang. The loan bears interest at 12% per annum and is secured by a
chattel mortgage constituted on Gavino’s only fishing boat. Gavino and Ang agreed that the former has the option
to pay the loan and the accrued interest on or before the end of the year. Six months before due date, the fishing
boat sank during a storm. What is/are the remedies available to Ang?.