Midterm Examination in RFBT (Cumulative Law on Partnership & ObliCon)

1. If the partnership agreement does not specify how profit is to be allocated, profits or losses
should be allocated
A. Equally
B. In accordance with their capital contribution.
C. In proportion to the average of capital invested during the period
D. Equitably so that partners are well compensated for their time and effort

2. Which of the following will not result in dissolution of a partnership?

A. Incapacity of a partner.
B. Negative capital balance of a partner.
C. Bankruptcy of a partner.
D. Admission of a new partner

3. Which of the following results in the dissolution of a-partnership?

A. The winding up of the partnership and the distribution of remaining assets to the
partners.
B. The contribution of additional assets to the partnership by an existing partner
C. The receipt of share by an existing partner.
D. The withdrawal of a partner from a partnership.

4. A limited partnership has A, as general partner, B as limited partner and C as industrial

partner contributing P100,000, P50,000 and services respectively. The partnership failed
and after disposing all its assets to pay partnership debts, there still remains a note
payable in the sum of P30,000. Against whom can the creditor demand payment?
A B C
A. P30,000 P0 P0
B. P15,000 P0 P15,000
C. P15,000D P 7,500 P 7,500
D. D. P10,000 P10,000 P10,000

5. If a partner is insolvent, his personal properties shall first be distributed

A. To the partnership creditors.
B. To the partners by way of additional contribution when the assets of the partnership
were insufficient to settle all obligations.
C. To partnership and separate creditors in the ratio of their loan exposures
D. To separate creditors

6. In a liquidation, the liabilities of the partnership should be paid

A. Before any sale of assets.
B. Before the distribution of cash to partners
C. Before the distribution of gains and losses on the disposal of assets
D. After a revaluation of assets
7. Claims against partners' personal assets by creditors if the partnership can't pay its debt
refers to
A. Unlimited liability
B. Dissolution
C. Mutual agency
D. Liquidation

8. The following is the priority sequence in which liquidation proceeds will be distributed for
a partnership
A. Partnership liabilities, partnership loans and partnership capital balances.
B. Partnership drawings, partnership liabilities, partnership loans and partnership capital
balances.
C. Partnership liabilities, partnership loans, partnership drawings and partnership
balances
D. Partnership liabilities, partnership capital balances and partnership loans.

9. A liquidation differs from a dissolution in that liquidation

A. There may be an adjustment of partners capital accounts.
B. Assets maybe revalued
C. The business will not continue.
D. Gains and losses are distributed according to the partnership agreement.

10. X, Y and Z form Y Partnership to engage in import-export business. The partners agrees
that the profit will be divided on the following ratio: X - 20%, Y-30%, Z 50%, but no
agreement as to losses. After one year of operation, there was a loss of P 10,000. How
will you apportion this losses if the capital contributions are as follows: X - P20,000; Y- P
15,000; Z - P – 5,000
A. According to their capital contribution: X-P5,000; Y-P3,750, Z- P1,250.
B. Equally among X, Y and Z
C. X – P2,000; Y - P3,000, Z - P 5,000
D. A third party may be called to make the distribution.

11. R, S and T decided to form a universal partnership of all present property. The contract of
partnership was executed on October 10, 2009 but they commenced business on October
18, 2010. One of the following is not correct?
A. If the partnership is for 15 years, but one of the partners withdraws from the partnership
on the 12th year, the firm is dissolved
B. The partnership began its existence on October 10, 2009.
C. If after the expiration of the its term, the partners continue to transact business, the
partnership is converted to a partnership at will
D. In the absence of any partnership agreement specifically covering the division of
losses among the partners, they will be deemed to share the losses in accordance
with their capital contributions
12. Partners A, B and C met a tragic accident. A and B instantly died on the spot, while C was
brought to the hospital but died a few hours later. Who may wind up partnership affairs?
A. Legal representative of A
B. Legal representative of B.
C. Legal representative of C
D. The court should appoint a representative who will wind up the affairs.

13. This feature distinguishes a partnership from co-ownership.

A. The purpose is to make profits.
B. It has no juridical personality
C. The profits are divided in proportion to one's interest.
D. Created not only by agreement of the parties but also by law.

14. A B and C formed a Universal Partnership of Profits. The partners contributed the
following: A-20 sewing machines: B-14 Furniture and Fixtures; C-4 storey building. The
parties agreed that only the use of the fruits of the objects contributed shall pertain to the
partnership. Which of the following statements is true?
A. The partnership upon delivery shall be the owner of the objects contributed
B. Upon dissolution, the objects shall be converted into cash and the proceeds shall be
divided equally among the partners including the fruits.
C. During the term of the partnership, the contributing partner remains to be the naked
owner of the object contributed but upon dissolution all objects are to be converted
into cash and proceeds shall be divided equally among the three partners.
D. During the term of the partnership, the loss of the objects contributed shall be borne
by the partners concerned

15. April, May and Jun formed a general partnership with a capital of P100,000 and the
partners contributing 50%, 30% and 20%, respectively. Mars has acclaim of P160,000
against the partnership. If Mars files a suit to collect her claim, which of the following is not
correct?
A. All the partners are liable to the extent of their separate property.
B. All the partners shall be liable pro-rata with all their property only after the partnership
assets have been exhausted
C. The personal liability of the partners is merely joint and not solidary
D. After exhaustion of the partnership assets, April, May and Jun shall be liable 50%,
30% and 20% respectively to Mars for unpaid claim

16. May, Jun and Jules are partners in an import and export business. Customers desiring to
place an order for imported articles are always required to make a deposit of 25% of the
total cost of the order. Augie, a regular customer deposited P2,000 to May for his order.
May instead of turning over the said amount of the partnership, misappropriated it. As a
result, one is not correct?
A. Augie may institute a claim against the partnership and all the partners
 B. The personal liability of the partners is merely joint and not solidary
C. The partnership is bound to make good the loss where one partner acting within the
scope of his apparent authority received money or property of a third person and
misapplies it
D. All the partners are liable solidarity with the partnership for everything chargeable to
the partnership.

17. A and B are partners. On January 2, 2010, C was admitted as a new partner. At the time
of C's admission, the partnership creditors were M for P50,000 and N for P30,000. After
January 2, 2010, the partnership borrowed from O-P20,000 and P40,000 from P. On May
15, 2010, the partnership became insolvent leaving an obligation amounting to P140,000
and partnership assets amounting to P30,000. The creditors are going after the separate
properties of the partners to satisfy their remaining claims, How are the creditors' claims
satisfied?
Statement 1-M and N can go after the separate properties of A and B but C's separate
properties are not answerable to their claims
Statement 2-0 and P can go after the separate properties of A, B and C.
A. True: True
B. False, True
C. True, False
D. False, False

18. On April 1, 2010, A and B entered into a contract of partnership for the purpose of buying
and selling textbooks, with the former as capitalist partner and the latter as industrial
partner. It was agreed that A shall contribute P100,000 to the common fund on May 2,
2010. Upon the arrival of the designated date, A failed to deliver the contribution he
promised. As a result
A. B should make a demand upon A for the delivery of his contribution to render A in
default.
B. The contract of partnership becomes void because A failed to give his contribution to
the common fund.
C. B can compel A to deliver his contribution with interest and damages without the
necessity of demand
D. The contract of partnership was never perfected because there was no delivery of
contributions by the partners

19. Three of the following are rights of a partner, which one is not? Right to
A. Admit another partner.
B. Inspect and copy partnership books.
C. Associate another person to his share.
D. Ask dissolution of the firm at the proper time.

20. As regards a limited partner, which of the following is correct?

 A. He is automatically an agent for the partnership with apparent authority to bind the
limited partnership in a contract
B. He can not own limited partnership interest in other competing limited partnership.
C. He has no liability to creditors even the taken part in the control of the business as
long as he is held out as being a limited partner.
D. He can contribute money and/or property but not services

21. X sold his motor vehicle to V who bought it for P200,000. It turned out however, that X has
2 motor vehicles: Toyota valued at P230,000 and Lancer valued at P220,000. Which is
correct?
A. There is no contract of sale between X and V
B. The parties may ask for interpretation or reformation
C. The parties can ask for annulment of the contract
D. V may choose between the Toyota or Lancer

22. X, the guardian of V, sold V's house and lot worth P480,0000 for P430,000.
A. The contract can be rescinded because of inadequacy of price
B. The contract cannot be rescinded because there is no fraud, mistake or undue
influence
C. The contract cannot be rescinded because all the elements of a contract are present
D. The contract can be rescinded by X.

23. X, 17 years old, sold to Z of legal age, her necklace worth P20,000 for P15,000, Later, Z
sold the necklace to Y for P20,000. Which of the following statements is correct?
A. X has got a voidable title because at the time of sale, she is a minor
B. X can ask for rescission of the sale to Y because she suffered a lesion of more than
¼ of the value of the property
C. If Y is in bad faith, Y becomes the owner of the necklace upon delivery to him but his
title is voidable
D. X can ask for the annulment of the sale to Y because at the time of sale she is a minor.

24. Which of the following contracts is not void ab initio?

A. The contract where the object is beyond the commerce of man
B. The contract whose cause, object or consideration is against the law, morals, good
customs or public order.
C. The contract which is relatively simulated or fictitious.
D. The contract where the intention of the relative to the object thereof cannot be
ascertained

25. On July 15, 2016, X entered into a contract with Y. On February 10, 2017, 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
A. Within three years from the time of the fraud.
B. Within four years from February 10, 2017
 C. Within four years from the time A entered into the contract
D. On February 10, 2017

26. A delivered his van to B for the latter's use for one week without any compensation. The
cause of the contract is
A. The van of A
B. The generosity of A
C. The period of one week
D. The delivery of the van

27. 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 constitute an offer?
A. An offer made to an agent
B. Business advertisement of things for sale.
C. Advertisement for bidders.
D. Answer not given.

28. Contracts entered into during lucid-interval

A. Voidable
B. Void
C. Unenforceable
D. None of the above.

29. Classifications of contracts according to form are

I. Informal or common contract or that which may be entered into in whatever form
provided all the essential requisites for their validity are present
II. Formal or solemn contract or that which is required by law for its efficacy to be in a
certain specified form.
A. True, True
B. True, False
C. False True
D. False, False

30. S1: If the contract is not in the form provided by law for its validity, the contract is void
S2: If the contract is not in the form provided by law for its enforceability, the contract,
though it has all the essential requisites for validity, cannot be enforced against the party
sought to be charged.
A. True, True
B. True, False
C. False, False
D. False, True

31. The transfer to a third person of all the rights appertaining to the creditor.
A. Delegacion
 B. Expromission
C. Subrogation
D. Novation

32. Andy makes a check payable to bearer, and hands the check to Ben, who hands it to Cyn
who finally hands it to Andy. This is an example of -
A. Condonation or remission of debt
B. Compensation
C. Confusion or merger of rights
D. Prescription

33. A obliged himself to give B a car if 8 places among the top ten in the CPA Board Exam.
Subsequently, they agreed that A would give B the car if B merely passes the CPA Board.
This is an example of
A. Mixed novation
B. Real novation
C. Implied novation
D. Personal novation

34. If a third person pays without the debtor's knowledge or against his will, the payor is
entitled to
Reimbursement of what he has paid.
Subrogation to the rights of the creditor.
A. False, True
B. True, False
C. False, False
D. True, True

35. 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. A Debt 1
B. Debt 2
C. Debt 3
D. Debt 4

36. A owes B P1,000. A, knowing that the debt has prescribed, nevertheless, still pays B. Can
A recover what he voluntarily paid?
First answer: Yes, because B has no right to demand the payment effected by A.
Second Answer: No, the payment extinguished the natural obligation.
 A. Both answers are correct
B. Only the first is correct
C. Both answers are wrong.
D. Only the second is correct

37. 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.

38. Which of the following is not a generic obligation?

A. Obligation to pay P1,000,000
B. Obligation to deliver 1999 Nissan Sentra Series III
C. Obligation to deliver 50 cavans of rice
D. Obligation to give a delimited generic object

39. Elmo is obliged to give Bert, either a ring worth P5,000 or bracelet worth P4,500; or a
watch worth P4,000. All the objects were lost due to Elmo's fault in the order stated.
A. Elmo's obligation is extinguished.
B. Elmo's obligation is to pay the value of the ring plus damages
C. Bert's right is to demand the value of any of the objects plus damages.
D. Elmo's obligation is to pay the value of the watch plus damages

40. "I will give you my car provided that if I like to have it back, you will return the same to me."
A. The obligation is void, because the fulfillment depends upon the will of the debtor.
B. The obligation is vold, because the fulfillment depends upon the will of the creditor.
C. The obligation is valid because the condition merely causes the loss of rights already
acquired
D. Both A and B

41. The following persons are disqualified to form a universal partnership. Who are the
exception?
a. Brother and sister
b. Husband and wife
c. Those guilty of adultery and concubinage
d. Those guilty of the same criminal offense, if the partnership is entered into a
consideration of the same

42. A is the capitalist partner and B the industrial partner. A is engaged personally in the same
kind of business the partnership is engaged in
a. If there are losses, the partnership will bear the losses
b. If there are profits, the profits will be shares by A and the partnership
c. If there are profits. A will give the profits to the partnership
 d. A will be excluded from the partnership and pay damages.

43. Three (3) of the following are rights of a general partner and also of a limited partner in a
limited partnership. Which is not?
a. To inspect and copy at reasonable hours the books of the partnership and have them
kept at the principal place of business
b. To demand true and full information of all matters affecting the partnership and a
formal account of partnership affairs
c. To have dissolution and winding up by decree of court
d. None of the above

44. The partnership is insolvent. These are preferred as regards to the partnership property.
a. Partnership creditors
b. Partners separate creditors
c. Partners with respect to their capital
d. Partners with respect to their profits

45. When cash or property worth P3,000 or more is contributed as capital. The Articles of Co-
Partnership shall be in a public instrument and be registered with the Securities and
Exchange commission. If the said requirements are not complied with:
a. it will render the partnership void
b. It will not affect the liability of the partnership and the partners to third parties
c. It will not give a legal personality to the partnership.
d. It will give the partnership a de-facto existence.

46. A, B and C are equal partners in Santos Brothers Partnership. The partnership is indebted
to PC for P150,000. Partner A is indebted to SC for P20,000 PC attached and took all the
assets of the partnership amounting to P90,000. B and C are solvent while A is insolvent
and all what he owns is a land valued at P15,000.
a. SC has the priority to the land of A as a separate creditor.
b. PC has priority to the land of A to cover A's share of the P60,000 remaining liability of
the partnership
c. B and C have priority to the land of A if they paid PC the 60,000 remaining liability of
the partnership
d. PC and AC shall have priority to the land of A in proportion to their claim of P60,000
and P20,000 respectively

47. When the capital (of a partnership) is P3,000 or more, it must be in a public instrument
and must be recorded with the Securities and Exchange Commission (Article 1772). A, B
and C agreed to form a partnership and each contributed P10,000 as capital of the
partnership. There was no compliance in the provisions of Article 1772
a. The partnership was not established
b. The partnership did not have juridical personality
 c. The partnership was established and any partner may compel the execution of a public
instrument
d. The partnership is void

48. A, as a partner contributed P30,000; B as partner, P15,000; and C as industrial partner,

his services in the partnership. After payment of all liabilities and expenses, only P18,000
remain as partnership assets.
a. A, P12,000, B, P6,000, C, None
b. A, P6,000, B, P6,000, C, P6,000
c. A, P9,000; B, P9,000, C, None
d. A, P8,000, B, P4,000, C, P6,000

49. This is the order of preference in the liquidation of a partnership:

a. 1. Outside creditors. 2. Partners with respect to their capital 3. Partners with respect
to their profit 4. Partners aside from capital
b. 1. Partners with respect to their capital 2. Partners with respect to their profit 3.
Partners aside from capital and profit 4. Outside creditors
c. 1. Outside creditors 2. Partners aside from capital and profit 3. Partners with respect
to their capital 4. Partners with respect to their profit
d. 1. Partners aside from capital and profit 2. Outside creditors 3. Partners with respect
to their capital 4. Partners with respect to their profit

50. W, X, Y and Z formed a partnership. W, X and Y are general partners and contributed
P50,000 each while Z, an industrial partner contributed his services only. All the partners
signed an agreement stipulating that the liability of W is limited to its contribution. After all
the assets of the partnership were exhausted there remains an unpaid liability of P40,000.
The creditors of the partnership can compel:
a. X and Y to pay the P40,000
b. X, Y and Z to pay the P40,000
c. W, X, Y and Z to pay P10,000 each and W and Z can demand reimbursement from X
and Y.
d. X and Y to pay P40,000

51. A, B and C are partners engaged in a retail business. Their contribution is P20,000 each.
D is admitted as a new partner with a contribution of P8,000. At the time of his admission,
the partnership has an outstanding obligation to E in the amount of P80,000 In this case
a. D is not liable to E for this obligation
b. D is liable to E for this obligation so that amounting to P68,000 will be exhausted
leaving a balance of P12,000. Only A, B and C shall be liable jointly or pro-rata, out of
their separate property.
c. D is liable to E for this obligation so that after the assets of the partnership will be
exhausted, leaving a balance of P12,000, all the partners shall be liable jointly or pro-
rata, out of their separate property
d. Answer not given.
52. A. B and C are partners in D-3 Partnership. On April 29,2010, partner C died. Not knowing
that C died, on May 1, 2010, A contracted a liability to D who also do not know the death
of C. The partnership debt is in the amount of P30,000, he can collect
a. P30,000 from A
b. P15,000 from A and P15,000 from B
c. P10,000 from estate of C, P10,000 from A: P10,000 from B
d. P20,000 from A and P10,000 from B

53. This the order of preference in the liquidation of a general partnership:

a. Outside creditors; Partner as creditors; Partners capital, Partners profit
b. Partner as creditors: Outside creditors; Partners capital, Partners profit
c. Partners capital, Outside creditors, Partneras creditors Partners profit
d. Outside creditors, Partner capital: Partners profit, Partners as creditors

54. W, X, Y and Z are partners. They contributed capital as follows: W, P50,000; X, P30,000,
Y, P20,000 and 2, is an industrial partner, his services. The partnership's obligation to
outsiders exceed the total net assets by P18,000. Who and by how much will the partners
be liable for the payment of the P18,000?
W X Y Z
a. P9,000 P5,400 P3,600 P0
b. bP4,500 P4,500 P4,500 P4,500
c. P6,000 P6,000 P6,000 P6,000
d. P4 500 P2,700 P1,800 P9,000

55. Which of the following is a characteristic of partnership as a contract?

a. Formal
b. Gratuitous
c. Innominate
d. Preparatory

56. I. The arrival of the term of a partnership with a fixed term or period shall not dissolve the
partnership if the partners continue with the business of the partnership but such
partnership may be terminated anytime dependent on the will of the continuing partners
II. The general rule is that the loss of the specific thing contributed to the partnership when
only the use of the thing is contributed by the partner and such thing after its transfer to
the partnership which used the same or sometime was subsequently lost, the partnership
is not dissolved.
a. True; True
b. True; False
c. False; True
d. False; False

57. A limited partner who takes active part in the management of the firm becomes
 a. A managing partner
b. Liable as a general partner
c. A general partner
d. A general partner and a limited partner at the same time

58. Which of the following losses will not cause the dissolution of a partnership?
a. Loss before delivery of a specific thing which a partner had promised to contribute to
the partnership.
b. Loss of a specific thing after its delivery to and acquisition of its ownership by the
partnership from the partner who contributed the same.
c. Loss after delivery of a specific thing where the partner contributed only its use and
enjoyment where such partner reserved the ownership thereof.
d. Loss before delivery of a specific thing where the partner promised to contribute only
its use and enjoyment, reserving the ownership thereof.

59. A and B orally agreed to form a partnership two years from today, each one to contribute
P1,000. If at the arrival of the period, one refuses to go ahead with the agreement, can
the other enforce the agreement?
a. Yes, because the partnership contract is not governed by the Statute of Frauds
b. Yes, because the prior agreement was voluntarily made.
c. No, because the agreement was merely oral and executory
d. No, since the agreement is to be enforced after one year from the making thereof, the
same should be in a public instrument to be enforceable.

60. 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

61. A and B are equal partners in AB Partnership by contributing P50,000 each on June 1,
2010. On July 1, 2010, the partnership contracted an obligation to pay Z the amount of
P180,000 on August 31, 2010. On August 10, 2010, C was admitted as a new partner. C
contributed P50,000. How will the obligation be paid?
a. A P60,000, В Р60,000, С P60,000
b. A P90,000; B P90,000; C. None
c. A P180,000 or B P180,000 and C P50,000
d. A P65,000, В Р65,000; С P50,000

62. A owes B P1,000, A, knowing that the debt has prescribed, nevertheless, still pays B. Can
A recover what he voluntarily paid?
First answer: Yes, because B has no right to demand the payment effected by A.
Second Answer: No, the payment extinguished the natural obligation.
a. Both answers are correct
 b. Only the first is correct
c. Both answers are wrong.
d. Only the second is correct.

63. Which of the following is not a generic obligation?

a. Obligation to pay P1,000,000
b. Obligation to deliver 1999 Nissan Sentra Series III
c. Obligation to deliver 50 cavans of rice
d. Obligation to give a delimited generic object

64. S1: Ibarra obliged himself to give Maria Clara a specific car tomorrow. If Ibarra failed to
deliver tomorrow after demand is made, Maria Clara may compel Ibarra to do his obligation
and may ask for damages.
S2: Darna obliged to deliver a car to Captain Barbel tomorrow. If Darna failed to deliver
tomorrow after demand is made, Captain Barbel's right is to ask a third person to deliver
a car to him at the expense of Dama plus damages.
a. Both statements are true.
b. Statement 1 is true while statement 2 is false.
c. Both statements are false.
d. Statement 1 is false while statement 1 is true.

65. S1: The debtor shall lose the right to make use of the period when he does not fumish any
guaranty or security to the creditor. $2. In an obligation subject to a suspensive period,
what is suspended is birth of the obligation
a. True; true
b. true; false
c. false; false
d. false; true

66. "I will give you my car provided that if I like to have it back, you will return the same to me."
a. The obligation is void, because the fulfilment depends upon the will of the debtor.
b. The obligation is void, because the fulfilment depends upon the will of the creditor,
c. The obligation is valid because the condition merely causes the loss of rights already
acquired.
d. Both A and B

67. Elmo is obliged to give Bert, either a ring worth P5,000, or bracelet worth P4,500, or a
watch worth P4,000. All the objects were lost due to Elmo's fault in the order stated
a. Elmo's obligation is extinguished.
b. Elmo's obligation is to pay the value of the ring plus damages.
c. Bert's right is to demand the value of any of the objects plus damages.
d. Elmo's obligation is to pay the value of the watch plus damages.
68. Dennis owes Cart P1M, Xanabelle, without the knowledge or against the will of Dennis
paid Cart P2M. Can Xanabelle get reimbursement from Dennis?
a. P2M by way of reimbursement from Dennis by reason of solutio indebiti
b. P1M only for that is the extent of benefit of Dennis,
c. No reimbursement because the payment was not proper being without the knowledge
or against the will of Dennis
d. P1M plus interest from the time of payment until reimbursement

69. A owes B P11,000 due on July 2, 2010. B owes A P6,000 due on July 3, 2010 and P4,000
due on July 10, 2010. B owes C P11,000 due on July 2, 2010. On July 2, 2010, B cannot
pay C so B assigns to C her credit of P11,000 against A, without the knowledge of A. On
July 10, 2010 C tries to collect from A the P11,000. How much can C compel A to pay?
a. P11,000
b. P9,000
c. P5,000
d. P1,000

70. 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
b. I and II only
c. II and III only
d. I and III only

71. An instrument authenticated by a notary public or competent public official with the
formalities required by law.
a. Private document
b. Public document
c. Memorandum of understanding
d. Written of agreement

72. One of the following contracts is not vitiated by intimidation or violence, and hence valid
a. A contract of sale which was signed by a party because his arm was being twisted by
a third person
b. A contract of sale which was entered into because the other party was pointing a gun
at his wife
c. A contract where a party was compelled to assign his property to the other to pay a
just debt because the latter threatened to sue him in court if he does not pay his debt
 d. A contract of donation of a parcel of land which a party signed because the other party
threatened to burn his house.

73. I-When the from required is for its validity, its non-observance renders the contract
voidable.
II-When the required from if for its enforceability, non-compliance therewith will not permit,
upon the objection of a party, the contract, although otherwise valid, to be proved or
enforced by action.
a. Only I is true
b. Only Il is true
c. Both are true
d. Both are false

74. There is no reformation in the following cases, except:

a. Memorandum of agreement
b. Wills
c. Simple donations inter vivos
d. When the real agreement is void

75. I- In order to judge the intention of the constructing parties, only their preceding shall be
principally considered.
II-However, general the terms of the contract maybe, they shall not be understood to
comprehend things that are distinct and a cases that are different from those upon which
parties intended to agree.
a. Only I is true
b. Only 11 is true
c. Both are true
d. Both are false

76. On January 1, 2015, V, Inc, and X Corp. entered into a Consultancy Agreement by virtue
of which the former obligated itself to render medical services to employees of X Corp.
The said service contract stipulated among other: “The this AGREEMENT takes effect on
January 1, 2015 to December 31, 2015, provided however, that either party who desires
to terminate the contract may serve the other party a written notice at least 30 days in
advance." On December 1, 2015, V, Inc. wrote X Corp. to inform that V, Inc. was assuming
from their silence that subject Agreement was renewed from January 1, 2016 to December
31, 2016. In X Corp.'s reply dated December 23, 2015, X Corp notified V Inc. of the
termination of the contract in question upon its expiration on December 31, 2015. But such
reply was formally received by V Inc. only on January 9, 2016. Is the 2015 consutancy
agreement deemed renewed for another term?
a. No, because there is no implied renewal of a consultancy agreement
b. Yes, because the second clause of the contractual provision in dispute is to effect the
written notice of termination should be served at least 30 days in advance.
c. No, because there was a reply dated December 23, 2015 which is within the year 2015
 d. Yes, because the reply was received only on January 9, 2016.

77. An accessory contract must be read in its entirety and together with the principal
agreement.
a. No-segregation principle
b. No-ambiguity principle
c. Not clear principle
d. No-interpretation principle

78. It is act of making intelligible what was before not understood, or on obvious, by which the
meaning of the contract is ascertained.
a. Annulment
b. Ratification
c. Reformation
d. Interpretation

79. Ann offered to sell her cellular phone for P10,000 to her friend, Beth. Beth accepted the
offer but is willing to pay only P8,000. Is there a perfected contract?
a. a . Yes, for a price of P10,000,
b. b . Yes, for a price of P8,000.
c. c . No, because the acceptance was qualified and it constituted a counter-offer.
d. No, because the offer was rejected.

80. An offer made through an agent is accepted from the time acceptance is communicated
to the
a. Agent
b. Principal
c. Agent and the principal
d. Agent and/ or the principal