LAW 303: AGENCY & BAILMENT CONTRACTS

Semi-Final Test

University of Luzon (UL), College of Accountancy Prof. Bryan Jasper D. Solis

DIRECTION: Choose the best answer from among the choices. Write answer on separate answer sheet. Good
Luck!

1. By mere meeting of minds, this contract is deemed perfected.

a. Agency
b. Commodatum
c. Mutuum
d. Deposit
2. Deposit is characterized as real contract because—
a. it has to be “written” to be valid
b. the parties give their “expressed” conformity thereto
c. the bailor has to “deliver the thing” to perfect it
d. the bailee is obligated to “keep the thing safe and return it to bailor when demanded.
3. Deposit is deemed “Necessary”—
a. When made by order of the court
b. When made by will of the depositor
c. When made with warehouses engaged in business of storage
d. When made on the occasion of calamity.
4. In the absence of stipulation, which contract below is for a fee or compensation.
a. Commodatum
b. Agency
c. Deposit
d. Mutuum
5. Fidel executed power of attorney which reads as follows: “I hereby grant full and absolute
powers to my agent, Castro, without any reservation, in the administration and management
of 808 Bakeshop and Restaurant in Tayug, Pangasinan.” By virtue of this uninhibited grant of
authority to Castro as agent, he is capacitated to—
a. Perform acts of administration only.
b. Perform strict acts of dominion.
c. Perform both acts of strict dominion and administration.
d. Exceed the authority given to him by the principal provided it results into unusual
profits.
6. Refer to the preceding number. Under the present grant of authority to the agent, which act
below cannot be performed by Castro without specific authority?
a. To give donation to victims of typhoon.
b. To purchase flour, lard, and other baking ingredients in bulk.
c. To lease any real property to another person for one year.
d. To sell industrial ovens in surplus and other baking tools and wares.
7. If Castro received the power of attorney from Fidel without expressly giving his consent or
manifesting acceptance, but nevertheless, subsequently performed the duties specified
therein—
a. The contract is perfected by implied acceptance and the subsequent transactions by
Castro bind Fidel
b. The contract is valid but the parties need to reduce it in writing to be enforceable.
c. Agency is not perfected for lack of acceptance and the transactions entered into by
Castro are void as far as Fidel is concerned.
d. Agency is not perfected for lack of acceptance and transactions entered into by
Castro are unenforceable as far as Fidel is concerned.
8. Jeff and Christian are brothers. Jeff delegated Christian as seller of his house and lot in
Mangaldan, Pangasinan for the price of Php500,000.00 cash only. To bind Jeff with the
contract of sale, the authority to sell by Christian must be—
a. Specific
b. Written
c. Either (a) or (b)
d. Both (a) & (b)
9. If the required kind and form of authority is not complied with between the brothers in the
preceding number, the resulting contract of sale is—
a. Still valid when ratified
b. Unenforceable
c. Voidable
d. Void
10. If the property is sold by Christian for Php700,000 cash without prior approval of Jeff
regarding the shift in the price—
a. Christian is guilty of ultra vires act
b. The contract of sale is valid as to Jeff, but Christian is liable for damages for
exceeding the authority given to him
c. The contract is deemed void because Christian acted in excess of authority.
d. Christian is not considered to have exceeded his authority because he acted in a
manner more advantageous to the Jeff; and the contract of sale is valid and
enforceable as to Jeff.
11. If the brothers did not talk about payment of commission fee or compensation between them,
is Jeff obligated to pay Christian for his services?
a. Yes, because the contract is presumed onerous or compensatory.
b. Yes, because to not do so is likened to enriching oneself at the expense of another.
c. No, because as brothers, the act or service is to be considered labor of love.
d. No, because in the absence of stipulation to the contrary, agency is deemed
gratutitous.
12. On June 8, a verbal agreement was reached by sisters Kai and Ioanna where the latter will
borrow the condominium unit of the former in Baguio City for a year to coincide with the
employment of Kai in Chicago. On June 18, Kai turned over the key of the condominium unit
to Ioanna, who thereafter had the place cleaned up and prepared for take-over. On June 28,
Ioanna moved in and settled at her sister’s condo. By mere consent, this contract is perfected
by the sisters--
a. Bailment
b. Commodatum
c. Future Commodatum
d. Agency.
13. _________________________________________, a contract of Commodatum was deemed
perfected between the sisters—
a. Upon verbal agreement was reached by sisters Kai and Ioanna where the latter will
borrow the condominium unit of the former in Baguio City for a year to coincide with
the employment of Kai in Chicago
b. When Kai turned over the key of the condominium unit to Ioanna
c. When Ioanna moved in and settled at her sister’s condo
d. When a written contract is signed by the parties simultaneous with the delivery of the
condo unit
14. Refer to the preceding number. How much, if any, will Ioanna pay to her sister Kai for the use
of the latter’s condo?
a. None, as the contract is strictly gratuitous.
b. Discounted rate or half the prevailing rent of other units in the building.
c. Lump sum of the reasonable rent for the whole year payable upon the return of
the condo.

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 d. In exchange for letting her live in the condo for free, Ioanna must give something
of value to Kai to bring abroad.
15. In the absence of express stipulation, specify the consideration in mutuum or simple loan.
a. Consumption of the object.
b. Transfer of ownership of the thing upon delivery.
c. Liberality of the lender.
d. Payment of interest rates.
16. In a real contract of Commodatum, delivery of the object by the bailor—
a. Transfers its ownership to the bailee.
b. Vests in the bailee the right to use the thing, including its fruits.
c. Obligates the bailee to keep the thing principally for safekeeping.
d. Perfects the contract.
17. In a real contract of mutuum, delivery of the thing by the lender—
a. Transfers its ownership to the borrower.
b. Obligates the borrower to give another non-consummable thing in exchange.
c. Obligates the borrower to pay interest apart from principal, with or without written
agreement to that effect.
d. Obligates the borrower to return the very same thing to the lender.
18. A thing borrrowed in commodatum is not—
a. Only for personal use by the borrower but also for other persons permitted by
him.
b. Non-consumable.
c. Immovable property.
d. Subject to retention by the bailee on the ground that the bailor owes him
something.
19. Loss of the thing in mutuum due to fortuitous event—
a. Extinguishes the obligation of the borrower to pay.
b. Is borne by the borrower before delivery.
c. Is borne by the borrower after delivery.
d. Renders the contract void for absence of an essential element (object).
20. Loss of the thing in commodatum due to fortuitous event—
a. Extinguishes the obligation of the bailee to return it.
b. Is borne by the bailor before delivery.
c. Is borne by the bailor after delivery.
d. All of the above.
21. Bailee’s right to the thing consists of the following, except one. Which is it?
a. Lend the object of the contract to members of his household.
b. Reimbursement for ordinary expense for the use of the thing.
c. Appropriate the fruits of the object if agreed upon.
d. Indemnity for damages arising from the defect in the thing borrowed.
22. Kevin borrowed the car of Joshua to fetch his partner Jacob from the airport. On the return
trip to the province, weighed down by the balikbayan boxes on board, the car stalled on the
highway near San Clemente, Tarlac. The couple found a local mechanic within the area to
check on the car, who quoted a price of Php3,500 for parts and Php750 for labor. The
incident resulted into heavy traffic in the area. Not wasting time and to avoid further
incovenience to other motorists, Kevin decided at once to let the local mechanic fix the car
without prior approval of Joshua. For the repair of the car, who will shoulder the cost?
a. Joshua only
b. Kevin only
c. Joshua and Kevin, pro-rata.
d. Joshua and Jacob, pro-rata.
23. Refer to the preceding number. Assuming Kevin will answer for the cost of the repair, can he
exempt himself from the payment of expenses or damages by abandoning the car to Joshua?

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 a. Yes, as this right is granted to the bailor by law.
b. Yes, if such option is stipulated upon in the contract.
c. No, the bailee can only retain the thing until such time payment is made.
d. No, the bailee can insist on returning the thing borrowed and demanding
reimbursement.
24. ACME Co. wrote a circular letter to its customers introducing Olivia as its duly authorized
agent. Baron, a customer, dealt or transacted business with Olivia. Later, Olivia’s authority
was revoked and was published in a newspaper of general circulation. Without knowledge of
the revocation as he does not read newspapers, Baron continued to transact business with
ACME Co. thru Olivia. Is ACME Co. still liable for the agent’s act even after revocation?
a. Yes, because the notice of revocation was not by special notice to Baron
b. No more, because third persons like Baron are deemed notified by the
publication.
c. No more, because transactions entered after revocation are deemed void.
d. Yes, because ACME Co. is estopped from denying the authority of Olivia.
25. In three of the following, a special power of attorney is required. Which one is considered the
exception?
a. To obligate the principal as guarantor.
b. To effect novations which put an end to obligation already contracted before the
agency.
c. To borrow money not necessary for the preservation of the property under
administration.
d. To lease property to another person for one year.
26. Spot the only fiduciary contract in the mix.
a. Commodatum
b. Mutuum
c. Deposit
d. Agency
27. At the onslaught of typhoon Falcon, Maricar took custody of a lost goat found wandering at
the backyard. For 3 days, Maricar took care of the goat until she came to know of the owner,
Glenda. Upon return of the goat to her, Glenda reimbursed Maricar of the expense incurred
by her with extra gift of goat milk for her kind acts. This obligation by Glenda arises from—
a. Conscience and/or moral grounds
b. Contract of deposit
c. Quasi-contract of Negotiorum Gestio
d. Quasi-conract of Solutio Indebeti
28. Due to flooding, bungalow owner Tim was forced to heave as many small appliances he could
carry and take them to the next house with second floor owned by Kurt, who opened the door
and let Tim in. Kurt nodded when Tim pleaded to have his belongings placed in his house
until the flood waters receded. Kurt’s obligation to take care of the things placed in his house
arises from—
a. Conscience and/or moral grounds
b. Contract of voluntary deposit
c. Contract of necessary deposit
d. Quasi-contract of Negotiorum Gestio
29. Refer to the preceding number. Assume that the water level continued to rise up to the
second floor of Kurt’s house, and Kurt is forced to choose from among the things to save or
bring up on the roof. Lacking time, Kurt preferred those that belonged to him leaving behind
the things belonging to Tim which were lost to the flood. Is Kurt liable for the loss?
a. Yes, because being able to save between his things and that of the depositor, he
chose those belonging to him,
b. Yes, because he reneged on his obligation to take care of the things of the depositor
c. Both (a) & (b)

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 d. No, because the loss is occasioned by calamitous event and he the situation made it
impossible for him to bring all things to safety
30. In a promissory note, Paul acknowledged indebtedness of Php20,000.00 in favour of Joshua
payable today (July 27) without need of demand. As far as consideration goes, this contract
is—
a. Gratuitous
b. Onerous
c. Real
d. Oral
31. On July 28, how much is Paul liable to pay Joshua?
a. Php20,000.00 only
b. Php20,000.00 + 6% per annum legal interest
c. Php20,000 + 12% per annum legal interest
d. Php20,000 + penalty for delay
32. Harry borrowed the book Harry Potter and the Sorcerer’s Stone from UL library, due for return
today. In the Student Handbook as well as in the library borrower’s card, both signed by
Harry, it is specified therein that borrower must return the book on due date without need of
demand. A week after due date, Harry brought the book to campus and intended to return it
after Professor Solis’ class. The book was placed on the table top of Harry’s armchair when a
rogue wind dashed into the open window and blasted the book into a clutter of pages, many
were irretrievably flown away. What becomes of Harry’s obligation to return the book?
a. Harry is liable for the loss of the thing even if should be thru a fortuitous event
because he delays its return.
b. Harry is liable to return what is left of the book.
c. Harry’s obligation to return the book is extinguished as the loss is due to
fortuitous event.
d. Harry is liable only if demand has expressly been made on him by the school
librarian to return the book.
33. Which statement is true about the bailor’s right to demand the return of the thing at will?
a. Bailor is entitled the right to demand the return of the thing at will in all contracts
of commodatum.
b. Bailor is entitled to demand the return of the thing at will only in precarium.
c. Bailor is entitled to demand the return of the thing at will if bailee refuses to
accomodate his sexual advances as this amounts to an act of ingratitude.
d. Bailor is entitled to demand the return at will in case he has urgent need for the
thing.
e. All of the above.
34. In case of temporary use by the bailor of the thing, the contract of Commodatum is ____ while
in the possession of the bailor.
a. Suspended.
b. Interrupted.
c. Terminated.
d. Rescinded.
35. Consider these statements and then make a valid observation:
I. In deposit, depositor can demand the return of the thing at will.
II. In commodatum, the bailor must wait until the period expired before he can demand
the return of the thing.
a. Statement I, true; Statement II, false.
b. Statement I, false; Statement II, true.
c. Statement I, true; Statement II, true.
d. Statement I, false; Statement II, false.

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