Bl.m-1402.Law on Contracts

BL.M-1402 Law on Contracts 1. Essential requisites of a contract: a. Consent b. Cause c. Subject d. All of them. 2. Raymoon makes an offer to Andrew on January 10, 2014. Andrew makes known his acceptance in a letter sent January 12, 2014 and received by Raymoon on January 20, 2014. Meantime, on January 15, 2014, Raymoon became insolvent. a. There is already a meeting of minds, the contract is perfected. b. The contract is voidable because one party is insolvent. c. The contract is void the offer being ineffective. d. The contract is voidable because one party is incapacitated. 3. Based on the same facts, except S is not insane but only a minor at the time the acceptance is communicated to him. a. The contract is binding between the parties. b. There is no meeting of minds between the parties, therefore void. c. The contract is not binding because the party is incapacitated. d. The contract is unenforceable. 4. A forced B to sell him his ring. B sued for annulment, but A had already lost the ring thru fortuitous event. Is A liable for loss? a. A is not liable because the loss was without his fault. b. A is liable to pay damages if he cannot replace the ring. c. A is not liable to because no one shall be responsible for the loss of a thing due to fortuitous event. d. A is liable for the loss even if it was due to fortuitous event because of his bad faith. 5. Element which there cannot be a contract is: a. Natural element b. Accidental element c. Essential element d. All of the above 6. When the contract lacks one of the essential elements, the contract is: a. Voidable b. Rescissible c. Void d. All of the above 7. Although contracts bind only contracting parties, their assigns and heirs, in the following instances, third persons are bound thereby: a. In case of stipulation pour autri b. In contracts creating real rights c. In contracts intended to defraud the creditors d. All of the above

8. A qualified acceptance constitutes: a. Counter offer b. An absolute acceptance c. A meeting of minds between the parties d. All of the above 9. The essential or impelling reason why the parties enter into a contract: a. Motive b. Profit c. Cause d. All of the above 10. The statement of a false cause in contracts shall render the contracts: a. Voidable b. Void c. Unenforceable d. Rescissible 11. Business advertisements of the things for sale are: a. Definite offer b. Counter offer c. Invitation to make an offer d. Acceptance of the offer 12. A contract wherein both contracting parties are incapable of giving consent and yet ratified by the guardian of either parties is: a. Voidable b. Rescissible c. Unenforceable d. Void 13. These persons are bound by contracts except: a. Assigns b. Heirs c. Third persons d. Parties 14. Liable for the loss of the subject matter by fortuitous event a. Creditor b. Debtor c. Both creditor and debtor d. None of the above 15. Valid, binding and enforceable until annulled a. Rescissible contract b. Voidable contract c. Void ab initio contract d. Validable contract 16. Which of the following contract is voidable? a. Those where one of the parties is incapacitated. b. Those whose object is outside the commerce of men. c. Those which are absolutely fictitious. d. Those which contemplate an impossible service.

17. Three of the following are void contracts. Which is the exception? a. Contacts where the cause is immoral. b. Contracts to prevent a known supporter of a political rival from voting for his candidate for a valuable consideration. c. Contracts with valid consideration but with unlawful motives. d. Absolutely simulated contracts. 18. S orally leased to R his parcel of land for a term of two years. The contract is: a. Rescissible b. Voidable c. Unenforceable d. Void 19. Contracts take effect only to the parties, their assigns and heirs except where the rights and obligations arising therefrom: a. Is not transmissible by their nature. b. Is not transmissible by stipulation of the parties. c. Is not transmissible by provision of law. d. All f the above 20. Where damages is caused to either of the contracting parties or to a third person, the contract may be: a. Rescinded b. Annulled c. Reformed d. Ratified 21. An offer becomes ineffective if, before acceptance is conveyed, either parties become: a. Civilly interdicted b. Insane c. Insolvent d. All of the above 22. Contracts entered into in a state of drunkenness or during hypnotic spell is: a. Void b. Voidable c. Unenforceable d. Rescissible 23. If mistake, fraud or accident has prevented a meeting of the minds of the parties, the proper remedy is: a. Reformation b. Rescission c. Annulment d. Resolution 24. The following is an example of a real contract: a. Contract of pledge b. Contract of deposit c. Contract of commodatum d. All of the above 25. A orally leased to B his car for a term of 2 years. B has not taken possession of the car and A has not received any rental. The contract is:

a. Valid and binding b. Unenforceable c. Rescissible d. Voidable 26. Based on the preceding number, if the object were a house, the contract shall be: a. Valid and binding b. Rescissible c. Unenforceable d. Voidable 27. If the object were a parcel of land, the contract is: a. Valid and binding b. Rescissible c. Unenforceable d. Voidable 28. Statement no. 1-As a rule, contracts take effect only between the parties. Statement no. 2Mere incidental benefit of the third person is enough for stipulation pour autri to exist provided he accepts the same. a. Both statements are true b. First statement is true, while the second statement is false c. First statement is false, while the second statement is true d. Both statements are false 29. These are principles in contracts. Which is not? a. Binding on third persons b. Freedom or autonomy of contracts c. Relativity of contracts d. Perfection by mere consent 30. The action to annul a voidable contract is extinguished by: a. Novation b. Ratification c. Rescission d. Estoppel 31. Which of the following contracts must be in writing to be enforceable? a. Acts and contracts for the creation, transmission, modification, extinguishments of real rights. b. The cession, repudiation, renunciation of heredity rights. c. Contract of partnership d. Contract of guaranty 32. A without authority from B sold the latter’s car in the name of the latter. The contract is therefore: a. Rescissible b. Voidable c. Unenforceable d. Void 33. Because A wants to sell his land to B but the latter does not want to buy the same, A forced B to buy his land. The contract is: a. Not binding upon B since his consent was vitiated

b. Valid, binding and enforceable c. Unenforceable as against B but not against A d. May be ratified expressly and tacitly by A 34. D borrowed a sum of money from C with a certain rate of interest. C now wants to increase the rate of interest without the consent of D. What principle in contracts prohibits C from doing so? a. Autonomy of contracts b. Relativity of contracts c. Mutuality of contracts d. Obligatory force and compliance in good faith 35. The following are attributes of a voidable contract. Which is not? a. It is binding, valid and enforceable before annulment. b. Damage is material to be voidable contract. c. It can be ratified and ratification has retroactive effect. d. The capacitated cannot allege the incapacity of the other party. 36. Which of the following can be considered as a feature of a void contract? a. Subject to ratification b. Novation cannot apply c. It exists d. Action or defense of nullity is subject to prescription 37. S offers to sell his house to B for P100,000. B asks him if he would accept P80,000. Which of the following is correct? a. Because of ambiguity, both offers are terminated by operation of law. b. B’s response is a mere inquiry, the P100,000 offer by S is still there. c. B’s response is a counter-offer effectively terminating the P100,000 offer and instigating an offer for P80,000. d. B’s response is a rejection of the P100,000 offer and there is no offer for P80,000 because it is too indefinite to be an offer. 38. Which of the following is not valid? a. Mutual promise to marry entered into orally. b. Sale of immovable property orally entered into. c. The stipulation is void because it is contrary to public policy. d. One of the parties in a contract is incapable of giving consent. 39. An agreement in restraint of trade or establishing monopoly is: a. Perfectly valid b. Voidable c. Void d. Unenforceable 40. One of the stipulations contained in the contract between M Company and its employees is that the company shall pay a bonus to employees of the company who shall continue its employment for at least 2 consecutive years, unless he quits or is discharged before the expiration of the period of 2 years. X, an employee of the company was discharged without just cause, just one week before the completion of the two-year period. a. X is not entitled to the bonus because his discharge was in accordance with the contract.

b. X is not entitled to the bonus because the employer’s right to terminate is superior than the right of the employee to be employed. c. X is entitled to the bonus whether the discharge is with or without case. d. X is entitled to the bonus because the debtor company has voluntarily prevented the happening of the condition. 41. Statement no.1- Dolo incidente entitles the person against whom it was employed to the right to seek the annulment of the contract. Statement no.2- A stipulation pour autrui is an exception to the rule on relativity of contracts a. Both are true b. No.1 is false; no.2 is true c. Both are true d. No.1 is true; no.2 is false 42. Example no.1: S sold to B in a private instrument his land. Later, B wanted to have the sale registered but registration requires a public instrument ; in here, B may compel S to execute the needed public instrument. Example no.2: S sold to B orally his land. After B paid S, he wants to register the in his name but he needed a public instrument of sale. In here, B may compel S to execute the needed public instrument. a. Both examples are false b. Both examples are true c. Only the first is true d. Only the second is true 43. Must be in writing to be enforceable: a. Lease of land for 12 months b. Lease of car for 18 months c. Both a and b d. None of a and b 44. Which of the following is not presumed to be 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 45. Statue of Frauds is not applicable to a. Contract not to be performed within a year from the making thereof b. Executed contract c. Oral contract of loan d. Mutual promise to marry 46. Which of the following contracts is voidable? a. Those where both parties are incapable of giving consent to a contract. b. Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud. c. Those undertaken in Fraud of creditors when the latter cannot in any matter collect the claims due them. d. Those whose object is outside the commerce of men.

47. A verbal agreement was made between A and B whereby A agreed to sell and B agreed to buy A’s farm for P100,000.00. The price was paid. Possession was not given nor the deed delivered. Both being refused. The contract is: a. Rescissible b. Voidable c. Unenforceable d. Void 48. A was forced by B to sign a contract. C a creditor of A wants to annul the contract. Is C allowed by law to do so? a. No, because a third person cannot assail a contract. b. Yes, because the contract is voidable and C is damaged. c. Yes, a third person can annul a rescissible contract. d. No, because a third person cannot assail a voidable contract. 49. A loan for P800 was orally contracted. May the lender recover the sum lent? a. No, because the contract is unenforceable. b. Yes, because the contract is enforceable. c. No, because the contract must be in writing to be valid. d. Yes, if the debtor ratifies the loan. 50. Is a remedy in equity by means of which a written instrument is made or constructed so as to express or conform to the real intention of the parties when some error or mistake has been committed? a. Ratification b. Resolution c. Reformation d. All of the above 51. S and M agreed in print that S, debtor for P30,000, will work as a servant of M without pay until she could find money with which to pay her debt. S failed to comply with her obligation. Under this premise, which of the following statement is correct? a. The agreement to work as a servant is void because it is immoral. b. The contract to work without pay as a servant until the debt is paid is void. c. To act as a servant without pay is unconstitutional because this is equivalent to involuntary servitude. d. The agreement to work without pay since written is enforceable. 52. In an “invitation” to bid, B proposes the following: “I will buy the property for P100,000 and if the bid of any other offer or shall be considered the best in terms of amount and conditions, I am equal to that offer”. a. The offer is speculative, because it cannot be considered as against another offer which is certain. b. The offer is considered a counter offer. c. This is a continuing offer which is very certain. d. The advertiser is not bound to accept the highest bidder. 53. The span of time wherein a person is in possession, temporarily, of all his mental faculties: a. Option period b. Prescriptive period

c. Lucid interval d. Reglementary period 54. The following contracts are valid: a. Rescissible b. Annullable c. Unenforceable d. All of the above 55. A and B mutually promised to marry each other. The promise being verbal and without witnesses to the promise. A did not marry B. B is now suing A for damages. Decide. a. The contract is unenforceable hence A is not liable. b. The contract is unenforceable because mutual promise to marry is covered by the Statute of Frauds. c. A may be liable for damages because mutual promise to marry is not covered by Statute of Frauds. d. A is liable for damages even if the contract is unenforceable. 56. A, minor sold to B a parcel of land registered in his name misrepresenting to the latter that he is of legal age. Having been mislead as to the true age of A, B entered into the contract. Is the contract voidable? a. It is voidable because the seller is the person incapable of giving consent to the contract being a minor. b. It is voidable because of mistake on the part of B when he thought that A was of legal age. c. It is not voidable because of the fraud committed by the minor seller and the buyer being in good faith. d. It is not voidable, but rather void because of lack of consent of A, who is only a minor being in good faith. 57. X alleged that Y promised to give him one hectare of land. This is in consideration of X’s meritorious services to Y. Y pleads in defense that since the promise was not in writing, it is unenforceable under the statute of Frauds, Decide. a. The promise is unenforceable because it5 is not in writing. b. The statute of Frauds is inapplicable here, because the promise to give the land is not a sale of real property. c. The statute of Frauds is applicable because A has rendered services. d. The statute of Frauds can apply to partially executed contract. 58. Which of the following instruments is not subject to reformation? a. Simple donations inter vivos wherein no condition is imposed. b. Wills c. When agreement is void d. All of the above 59. Three of the following contracts are void. Which is the exception? a. Those whose cause, object or purpose is contrary to law, morals, good custom, public order or public policy. b. Those where both parties are incapable of giving consent to a contract. c. Those which are absolutely simulated or fictitious.

d. Those whose cause or object did not exist at the time of transaction. 60. S owns an oil painting. Being in need of money, S sold the painting to B for P1,000. After the sale it was discovered that the painting was valuable and worth P5,000. a. S may rescind the contract due to lesion or inadequacy of cause. b. S may annul the contract because of the fraud. c. B is entitled to the benefit of the contract because it is valid and binding. d. S may annul the contract on the ground of error. 61. D forced C to execute a promissory note a. Contract is rescissible because the contract is fraudulent. b. The contract is void. c. Contract remains to be valid. d. C cannot demand payment from D because the contract is unenforceable. 62. A made a donation to B. Later, A contracted several debts. What A has left as assets are much less than his present liabilities. May the donation be rescinded? a. No, because the debts were incurred after the donation has been made. b. No, if A gave a guaranty or security for his debts. c. Yes, because the donation is rescissible being in fraud of creditors. d. Yes, because A has become insolvent after the donation. 63. A, director of X corporation, through an agent bought the shares of stocks of another stockholder without revealing to the seller stockholder that negotiations were in progress to enhance the value of the shares. The sale is defective contract being: a. Void, because of fraud committed by A against the other stockholder. b. Voidable due to the fraud, concealment by A against a fellow stockholder. c. Voidable because of mistake on the part of the seller stockholder. d. Rescissible because of the damage suffered by the seller. 64. Statement no.1- If the cause is not stated in the contract it is presumed that it is unlawful. Statement no.2- The action for rescission is subsidiary it cannot be instituted except when there is no other legal means to obtain reparation for damages suffered. a. Only the first is false b. Both statements are true c. Both are false d. Only the first is true 65. To defraud his creditor, A sold his house to X. When however the creditor wanted to collect his credit, somebody lent A enough money. Is the sale rescissible? a. Yes, because it was entered into in fraud of creditors. b. No, because the creditor can collect the credit due him. c. No, because the debtor has become in good faith when he was lent enough money to pay his debts. d. Yes, because the debtor was in bad faith when he sold the house to X. 66. A and B entered into an oral sale of the former’s car for P1M which amount has been credited to his bank account although the car has not yet been delivered to the latter. Can B compel A to execute the deed of the sale of the car? a. No, because the sale is unenforceable. b. Yes, if A used the money paid to him. c. No, because the sale is void.

d. Yes, because it is enforceable. 67. L entered into a contract of mortgage with X. T, the clerk of L typed the document. Due to T’s negligence, the document made was that of sale instead of mortgage. a. The remedy is annulment. b. Reformation of instrument is proper. c. Parties may go to court for interpretation. d. Parties may enforce their right because it is enforceable. 68. Without authority from A, B sold in B’s name the land of A to X who was in good faith. The contract is: a. Valid sale provided B is the owner upon delivery. b. Void because B was not the owner at the time of the perfection of the sale c. Unenforceable because B had no authority to sell A’s land d. Voidable because of the fraud committed by B against A 69. Based on the preceding no., if the sale in A’s name the contract is: a. Void, because B was not the owner at the time of the perfection of the sale b. Voidable because of the fraud committed by B against A c. Unenforceable because B had no authority to sell A’s land d. Valid sale provided B is the owner upon delivery 70. A sold to B a genuine of Fundador brandy. However, upon delivery the former substituted a fake. B now wants to annul the sale. Decide. a. The contract is void ab initio therefore, it can be annulled. b. The contract can be annulled since it is voidable due to fraud. c. There is dolo incidente therefore, it is annulled. d. The contract cannot be annulled because it is only incidental fraud. 71. Statement no.1- Just like voidable and unenforceable contracts, rescissible contracts may also be ratified. Statement no.2- In case of fraud or mistake, the action for annulment must be made within four years from the commission of the vice of consent. a. Both statements are true. b. Both statements are false. c. First statement is true, while the second is false. d. First statement is false, while the second is true. 72. Example no.1: Guardian of W, sold W’s house valued at P50,000 for P37,500 or a lesion by ¼ of the value. Example no.2: S sold his house valued at P50,000 for only P10,000 because S did not know the true value of the house. a. Both contracts are rescissible. b. Both contracts are valid and enforceable c. Only no.1 is rescissible d. No. 2 is voidable because there is an error 73. Three of the following are rescissible, which is not? a. Sale of property under litigation made by defendant without the consent of plaintiff or authority of the court. b. Contract of sale and the price is unusually inadequate resulting to lesion. c. Those made to defraud creditors when the latter have no other means to recover their claims.

d. Those agreed upon in representation of absentees, if the absentee suffers lesion by more than ¼ of the value of the property subject of the contract. 74. Statement no.1- Contracts take effect not only between the parties but also their heirs and assigns and the heir is liable beyond the value of the property he received from the decedent. Statement no.2- In stipulation pour autrui, the third person must communicate his acceptance or the stipulation before its revocation. a. Both statements are correct. b. Both statements are incorrect. c. First statement is correct, while the second is incorrect. d. First statement is incorrect, while the second is correct. 75. S sold his parcel of land only for Php 1M although the value of the same is Php 2M. He thus suffered a damage or lesion in the sale due to the inadequacy of the price. Therefore, the contract is: a. Voidable b. Unenforceable c. Not defective d. Rescissible 76. A sent B a letter wherein the former offered to sell his car to the latter for Php 1M. B signed to show intention that he may buy the same. In A’s letter, he gave B two weeks to raise the amount. After one week, A raised the price to Php 1.5M. Can B compel A to accept the Php 1M first offered by A and deliver him the car? a. No, because there was no acceptance yet of the offer. b. Yes since, there was already offer and acceptance. c. Yes, because A cannot change his offer without the consent of B. d. Yes, because A cannot withdraw the offer within two weeks as he is under estoppel. 77. A contract where consent is given through mistake, violence or intimidation is: a. Void b. Unenforceable c. Rescissible d. None of the above 78. A threatened to kill B if the latter would not marry the former’s daughter who was pregnant with B’s child. Intimidated, B married A’s daughter against his will. a. The contract is not voidable because the threat was made by a third person not by one of the parties. b. Voidable is the contract due to intimidation even if employed by a third person. c. The contract is not voidable because the claim for marriage is just or legal and therefore consent is not vitiated. d. The contract is not voidable since B has to answer for it is his fault that A’s daughter became pregnant. 79. X, after the death of his father, sold his inheritance though its amount has not yet been determined to B, for a consideration of P50,000. a. The contract is valid only if the inheritance valued at least equal or more than P50,000.

b. The contract is void if nothing remains of the inheritance to be turned over to B. c. The contract is rescissible. d. Contract is void, future inheritance cannot be the object of sale. 80. The following are attributes of a rescissible contract, except: a. It is valid and rescinded. b. It is a principal remedy of the creditor to collect his credit. c. Damage or lesion is absolutely material. d. Third person whose interest is affected may ask for rescission. 81. B company bought out a competitor, C corporation, with a stipulation that C corporation should not thereafter engage in any business in the Philippines unless consented to and approved by B Company. a. The stipulation is defective subject to ratification. b. The stipulation is valid because the parties are free to enter into any stipulation, terms and conditions such as this one. c. The stipulation is unenforceable as there was no showing that the sale was done in writing. d. The stipulation is void because it is contrary to public policy. 82. Which of the following contracts is not void ab initio? a. Those whose object is outside the commerce of men. b. Those undertaken in fraud of creditors. c. Those whose object did not exist at the time of transaction. d. Those which contemplate an impossible service. 83. In a contract of sale executed by S and B, appears S sold his motor vehicle to B for P50,000. It turned out however, S has three motor vehicles. Gallant valued P80,000, Hiace Van valued P70,00. and a jeep valued at P60,000. Which of the following is correct? a. The contract shall be reformed because there was mistake. b. The parties can ask for interpretation because the word motor vehicle is ambiguous. c. There is no contract. d. The parties can ask for annulment of the contract. 84. S sold to B a fake 2013 model Lebron James pair of shoes on February 3, 2013. On March 2014, B discovered that the shoes he bought from a was an imitation. The law provides the he can annul the sale as a voidable contract within four years. Prescription starts from: a. February 3, 2013 when the sale was perfected. b. March 10, 2014when the fraud was discovered. c. The time of delivery of the shoes to B. d. The time they first talked about the sale of the shoes. 85. In the order that stipulation in favor of a third person would be valid and binding upon the parties thereto, the following are requisites; except: a. There must be a stipulation in favor of a third person. b. That there must be an existing agency between either of the contracting parties and the third person. c. The contracting parties must have clearly and deliberately conferred a favor upon the third person.

d. The third person communicated his acceptance to the obligor before its revocation. 86. In three of the following contract is cleansed of its defect by ratification. Which is not so ratified? a. Contract entered into by a person incapable of giving consent. b. Sale of chattels orally entered into for a price not less than five hundred pesos. c. Contract where the creditor was damaged by the act of the debtor who intended to defraud him. d. Lease of real property for more than one year orally entered into. 87. If the doubts are cast upon the principal object of the contract in such a way it cannot be known what may have been the intention or will of the parties. The contract shall be: a. Voidable due to lack of meeting of minds b. Interpreted for there is doubt c. Reformed to express the true intention of the parties. d. Void 88. An offer made through an agent is accepted from the time acceptance is communicated to: a. Both the principal and the agent b. The principal c. The agent d. The household member of the family 89. A entered into a contract of mortgage. However, as written the document states it is a contract of sale with right of repurchase, the error due to the fault of the clerk/typist. Hence: a. The contract of sale must be annulled since it is voidable. b. The instrument has to be enforced as it is the proof of the agreement between the parties. c. Because of the negligence of the parties in signing without first reading the instrument, they are bound by the contents of the same. d. The instrument may be reformed because it does not express the true agreement of the parties. 90. Raymundo, bachelor Certified Public Accountant, inflicted physical injuries to Bibi Gandang Reyna. Upon learning this, Juan Reyna, the father of Bibi Gandang Reyna, was able to force Raymundo to marry her under pain of being sued in the Professional Regulation Commission for revocation of his licensce. Which statement is correct? a. There was no defect, the marriage was perfectly valid. b. The marriage may be annulled on the ground of force or violence. c. The marriage may be annulled on the ground of threat and intimidation. d. The defective marriage may, however, be ratified. 91. G was appointed guardian of S, the latter being 17 and ¾ years old. S sold his parcel of land in writing to B valued at P100,000 for P65,000 suffering lesion by more than ¼ of the value. What is the status of the contract? a. Voidable b. Rescissible

c. Unenforceable d. Void 92. A and B agreed on June 3, 2012 that B will construct the house of A on March 2014. The contract was orally entered into. B received a down payment from A with the balance payable after completion of the house. The contract is: a. Voidable because it is not in public instrument b. Unenforceable because it is not in writing and yet performance there is after one year from perfection. c. Enforceable even if not in writing, having been ratified. d. Void because it is not in writing as required by law. 93. Contract which cannot be sued upon unless ratified, thus as if they have no effect yet: a. Voidable b. Rescissible c. Unenforceable d. Void 94. A orally sold to B his house at 16 Kiko St, Malate, Manila. In the written deed of sale, both forgot the true number of the house and instead wrote on the contract, “18 Kiko St, Malate, Manila”. The remedy shall be: a. Annulment of a voidable contract because of mutual mistake. b. Reformation of instrument because of mutual error. c. Reformation of instrument because of lack of meeting of minds. d. Declaration of nullity of the contract because of the uncertainty of the intention as to the object. 95. Which of the following is correct? a. An action to enforce judicially a natural obligation prescribes in 4 years. b. An action for annulment is imprescriptible. c. An action to declare a contract void is not subject to prescription. d. An action for rescission of contract prescribes in five years counted from the execution of the contract. 96. Statement no.1- If one party was mistaken and the other acted fraudulently or inequitably in such a way that the instrument does not state their true intention, the former may ask for the annulment of the instrument. Statement no.2- The statement of a false cause in contracts shall render them void if it should not be proven that they were founded upon another cause which is true and lawful. a. No. 1 is false; no. 2 is true b. Both are true c. Both are false d. No. 1 is true; no. 2 is false 97. Statement no. 1- A threatened B with an administrative charge for immorality if the latter does not marry her because she is already pregnant with their child. Fearing that she may do so, B married her. The contract of marriage is therefore voidable because of threat. Statement no. 2- A simple mistake of account may give rise to the annulment of the contract because of mistake. a. Both statements are false.

b. Both statements are true. c. First statement is false, while the second is true. d. First statement is true, while the second is false. 98. G was appointed as the guardian of M who owns a parcel of land valued at Php 1M. M sold the land for Php 0.7M to B. The contract was defective because: a. Unenforceable b. Rescissible c. Voidable d. Void 99. A sold a parcel of land to B by word of mouth and delivered to the latter the Transfer Certificate of Title of the land. Can B compel A to execute the deed of sale of the land? a. B cannot compel A to execute the deed of sale being oral is unenforceable. b. B cannot compel A, because the sale is void being oral. c. B can compel A, because the sale is merely voidable and therefore binding until annulled. d. B can compel A, because the contract is enforceable due to the delivery of the TCT to him. 100. Three of the following contracts must be in writing to be valid. Which is the exception? a. Contract of partnership where immovables are contributed. b. Contract where the amount involved exceeds five hundred pesos. c. Contract of agency to sell the land of the principal. d. Negotiable instruments. 101. A contract entered into in the name of another by one who has no authority or legal representation is: a. Void b. Unenforceable c. Rescissible d. Annullable 102. To defraud his creditors, A sold his real property to B. B now seeks to register the sale. X, a creditor seeks to prevent the registration on the ground that it is a rescissible contract. Despite X’s objection may the land be registered in B’s name? a. No, because the contract is rescissible and therefore without effect. b. Yes, because the contract although rescissible is valid, binding and enforceable before rescission. c. No, because the sale is void and after annulment is not binding. d. Yes, because the contract although voidable is valid and binding. 103. In three of the following defective contracts, ratification cleanses the defect. Which is the exception? a. Both parties are incapable of giving consent b. Sale of immovable property or interest therein orally entered into. c. Contracts is void the offer being ineffective d. Sale of a piece of land thru an agent and the authority is oral.

104. S sold to B his parcel of land worth one million pesos for only half a million pesos. After the sale and realizing his damage, S is now seeking to set aside the sale. Decide: a. The contract is voidable because of mistake of the seller. b. The sale is valid, binding and enforceable because as a rule, lesion or inadequacy of cause or price in sale does not invalidate a contract. c. It is rescissible because of the lesion or damage suffered by S. d. S has the right for an increase in the price to prevent unjust enrichment on the part of B. 105. A sold in writing to B his stereo set for Php 600.00. There is no delivery from A and no payment of the price from B. Contract is: a. Enforceable b. Voidable c. Unenforceable d. Void 106. A being the eldest, sold the minor sister’s parcel of land in the name of the latter and by virtue thereof, the latter was able to finish high school. The contract is: a. Void b. Unenforceable c. Rescissible d. Voidable 107. When his father died but before the delivery of the property to him, a son sold his share of the property inherited. Is sale valid? a. No, because future inheritance cannot be sold. b. Yes, because future inheritance can be object of the contract. c. No, because the son was not the owner due to lack of delivery to him. d. Yes, because what has been sold is present inheritance. 108. A and B agreed on a contract of pledge. However, they entered into a contract of mortgage in the honest belief that the mortgage and pledge are the same. May the instrument be reformed: a. No, the document cannot be reformed since the contract is void. b. No, it cannot be reformed because there was no meeting of minds between the parties and the remedy is annulment of contract. c. No, it cannot be changed. They are bound by the document which speaks for itself. d. Yes, it cannot be reformed because it does not express the true agreement of the parties. 109. Statement no.1- In case of doubt, a contract purporting to be sale shall be construed as mortgage. Statement no.2- In annulment of contracts, there shall always be mutual restitution of both parties thereof. a. First statement is false, while the second is true. b. First statement are true, while the second is false. c. Both statements are false. d. Both statements are true.

110.

Which one of the following constitutes fraud? a. Failure to disclose facts when there is a duty to reveal them as when parties are bounded by confidential reasons. b. Misrepresentation made not in bad faith. c. Misrepresentation by a third person and both parties were mistaken. d. Usual exaggeration in trade or dealer’s /sale or talk. 111. A- In case of divisible contract, if the illegal terms can be separated from the legal ones, that the latter can be enforced. B- The defense of illegality of contracts is available to third persons whose interests are directly affected. a. Both are true b. Both are false c. First is false d. Second is false 112. The act by mean by virtue of which efficacy is given to a contract, which suffers from a vice of curable nullity. a. Resolution b. Resccission c. Ratification d. All of the above 113. D borrowed a sum of money from C with G as a guarantor. The loan is in writing but the guaranty is oral. D failed to pay C. Who now is demanding payment from G? Can G be compelled to pay? a. Yes, because he is the guarantor obliged to pay in case the debtor defaults. b. No, because the guaranty is void having been orally made. c. No, because the guaranty is unenforceable against G, it being oral. d. Yes, because the guaranty is enforceable, writing not needed. 114. Which of the following contracts is valid? a. Oral contract of agency giving authority to an agent to sell the land of the principal. b. Oral partnership agreement where immovables are contributed. c. Oral agreement to answer all the expenses for the wedding reception if A marries B. d. Oral contract of sale of an immovable entered into by an agent who was given oral authority by the principal. 115. A made a donation to B. later, A contracted several debts. What A has left as assets are much less than his present liabilities. May the donation be rescinded? a. Yes, because the donation is rescissible being in fraud of creditors. b. No, if A gave a guaranty or security for his debts. c. Yes, because A has become insolvent after the donation. d. No, because the debts were incurred after the donation has been made. 116. A gave B one million for the latter to kill C. Before B could his accomplish his criminal intent to kill C, A changed his mind and demanded the return of money from B. Decide: a. A cannot recover the payment he made to B because it was void contract which does not allow recovery by the guilty party.

b. A cannot recover the money because the contract is unenforceable. c. No recovery and both A and B will be prosecuted for their crime. d. A can recover the money although the contract is void since the crime was not committed. 117. Statement no.1- If the cause is not stated in the contract it is presumed that it does not exist and therefore the contract is void. Statement no.2- In order that a contrary may be voidable , there must be damage. a. Both statements are true. b. Both statements are false. c. First statement is false, while the second is true. d. First statement is true, while the second is false. 118. D owes C P500. However , C’s right has already prescribed. Notwithstanding the knowledge of this fact, D paid the amount. Realizing this mistake D wants to recover the amount he paid. a. D can recover on the ground of mistake b. D cannot recover c. D can recover because his obligation is not enforceable d. D can recover otherwise C will be enriched at the expense of D 119. Which of the following contracts is not rescissible? a. Those which are entered into by guardians whenever the wards whom they represent suffer a lesion of more than ¼ of the value of the object of the contract. b. Those where one of the parties is incapable of giving consent to a contract. c. Those executed in representation of an absentee, if the latter suffer a lesion more than ¼ of the value of the object of the contract. d. Those undertaken in fraud of creditors when the latter cannot in any other manner collects the claims due them. 120. A appointed B to sell his land: Statement no.1- If the authority of B is oral and the sale is in public instrument, the sale is void. Statement no.2- If the authority of B is oral, the contract is unenforceable. a. Both statements are true. b. First statement is false, while the second is true. c. First statement is true, while the second is false. d. Both statements are false. 121. A offered T-rex toy cars to B for P1,000 each. B answered by letter that he was willing to purchase not 20 but 30 pieces at said price of P1,000 each. Is the perfected? a. Yes, there is perfected sale because the number of pieces is only incidental matter in the sale. b. Yes, because the letter of acceptance was already sent by the offeree. c. No, because there is no offer yet of A that is certain. d. No, because there is qualified acceptance which constitutes an offer by the buyer. 122. D, fearing that his creditor C would go after only his parcel of land to satisfy his claim for payment of D’s debt, sold his land to X who did not know of D’s intention. Decide. a. C can ask for annulment of the sale as this is a voidable contract.

b. C cannot ask for the rescission of the sale. c. C may ask for damages against S since he was damaged by the sale. d. C can file an action for the rescission of the sale. 123. X is a former government employee, suffered from severe paranoia and was confined in the mental hospital in 2000. After his release, he was placed under the guardianship of his wife to enable him to get his retirement pay. In 2004, he became a mining prospector and sold some mining claims. In 2006, he wants to annul the sale claiming that he was not mentally capacitated at the time of sale. The sale in question was: a. Rescissible b. Void c. Voidable d. Valid 124. S was intimidated by B to sell to the latter his parcel of land at a very low price. C, the creditor of S was thus damaged since the former has no other means of collecting from S. The remedy of S is a. Rescission b. Have it declared by the Court as void c. Annulment d. Reformation of the contract 125. Statement no.1- In voidable contracts, there is no need to ratify the same before they can be considered valid. In unenforceable contracts, however ratification is mandatory before they can be considered enforceable. Statement no.2- “There is undue influence if insidious or machinations was employed by a party on the other just to obtain the latter’s consent, without which the latter would not have entered into the contract. a. Both are true b. Both are false c. No. 1 is true; no. 2 is false d. No. 1 is false; no. 2 is true 126. S orally sold to B a parcel of land for which the latter paid P1M. B now wants to register the sale so that he can have a Transfer Certificate of Title in his name. Decide. a. S cannot be compelled to execute the public document of sale because the sale is unenforceable. b. The sale is void and therefore cannot be registered. c. S cannot be compelled to execute the public document of sale because the sale is voidable. d. S can be compelled to execute the public document of sale because the sale is enforceable. 127. On January 20, 2002 A and B agreed verbally to form a partnership on January 25, 2004. a. The contract is void because future property can’t be contributed to a universal partnership of all present property. b. It is voidable if the parties marry each other before they form the partnership. c. Void because there is no public instrument of their agreement.

d. Unenforceable because it is not in writing. 128. Three of the following are objects of contracts, except: a. Those things within the commerce of men. b. Intransmissible rights c. Services which are not contrary to law, morals, good customs. d. Heredity rights 129. Statement no.1- One of the parties at the time of making the offer or acceptance was already insane, the contract is voidable. Statement no.2- If before the acceptance is conveyed to the offeror, either of the parties becomes insane, the contract is void, that is, the offer is noneffective. a. Both statements are incorrect. b. Both statements are correct. c. First statement is correct, while the second is incorrect. d. First statement is incorrect, while the second is correct. 130. A and B orally agreed that A would sell and B would buy A’s radio for P200 three years from the date of the agreement. At the end, of the three years, A refused to hand over the radio although B was willing to pay. Is A bound to deliver the radio sold? a. A is obliged to deliver what he sold since it was an enforceable agreement. b. A is obliged to deliver if B is ready to pay the price. c. A is not bound to deliver because the sale is void. d. A is not bound to deliver because the sale is unenforceable. 131. A borrowed money from B with C as a guarantor. The contract of loan of P1M was not in writing while the guaranty was written. B is now demanding payment from C because A failed to pay. Is C liable? a. C is liable because the guaranty is enforceable although the loan is void it being oral. b. C is liable because the guaranty is enforceable. c. C is not liable because the accessory contract of guaranty is void since the principal contract of loan is void. d. C is not liable because the contract of loan is in amount exceeding P500.00 which must be in writing to be enforceable. 132. A promised to give B a car as a reward after B has killed C. Later, after the killing, the contract was changed to a lease of a big house for a certain period. The contract of lease is: a. Rescissible b. Void c. Unenforceable d. Voidable 133. A was having his house repaired by B, who needed certain materials. So A told the storeowner, “Give B the materials. I shall be responsible. I shall stand good.” This was orally entered into a. The contract is unenforceable because A made an oral agreement to answer for the default of another, that is, B. b. The contract shall be enforceable if there is ratification by A.

134.

c. The contract shall be enforceable if it has been executed. d. The contract is enforceable because A did not make a special promise to answer for the default of another person. Which of the following contract is rescissible? a. Those where one of the parties is incapable of giving consent to a contract. b. Those which are entered into by guardians whenever the wards whom they represent suffer a lesion of more than ¼ of the value of the object of the contract. c. Those where both parties are incapable of giving consent to a contract. d. Those which are absolutely simulated or fictitious.

Suggested Answers: 1. D 2. C 3. A 4. D 5. C 6. C 7. D 8. A 9. C 10. B 11. C 12. A 13. C 14. D 15. B 16. A 17. C 18. C 19. D 20. A 21. D 22. B 23. C 24. D 25. A 26. C 27. C 28. D 29. A 30. B 31. D 32. C 33. B 34. C

35. B 36. B 37. B 38. C 39. C 40. D 41. B 42. B 43. D 44. D 45. A 46. B 47. C 48. D 49. B 50. C 51. B 52. D 53. C 54. D 55. C 56. C 57. B 58. D 59. B 60. C 61. C 62. A 63. B 64. A 65. B 66. D 67. B 68. A

69. C 70. D 71. B 72. B 73. B 74. D 75. C 76. A 77. D 78. B 79. B 80. B 81. D 82. B 83. C 84. B 85. B 86. C 87. D 88. C 89. D 90. A 91. A 92. C 93. C 94. B 95. C 96. A 97. A 98. C 99. D 100. 101. 102.

B B B

103. 104. 105. 106. 107. 108. 109. 110. 111. 112. 113.

C B A B D B B A A C C

114. 115. 116. 117. 118. 119. 120. 121. 122. 123. 124.

C D D B B B A D B D C

125. 126. 127. 128. 129. 130. 131. 132. 133. 134.

C D D B C D B B D B

135.