EXERCISES IN OBLIGATIONS INCLUDING CPA EXAMINATION QUESTIONS

TRUE OR FALSE

1. Efficient cause is the legal or juridical tie which binds the parties to the obligation.
2. Prestation is the object or subject matter of the obligation.
3. Obligations arising from contracts have the force of law between the contracting parties
and should be complied with in good faith.
4. Without demand from the creditor, the debtor, even if he fails to perform the obligation on
the agreed date, does not incur delay.
5. Suspensive condition is one which extinguishes the obligation upon the happening of the
condition.
6. Every person obliged to give something is also obliged to take care of it with the proper
diligence of a good father of a family.
7. Unless the law or stipulation of the parties requires another standard of care, the debtor is
obliged to take care of the thing with the proper diligence of a good father of a family.
8. As a rule, the creditor has a right to the right to the fruits of the thing from the time the
obligation is perfected.
9. As a rule, the creditor has a right to the right to the fruits of the thing from the time the
obligation to deliver it arises.
10. Payment made by a third person who does not intend to be reimbursed by the debtor is
deemed to be a donation, which requires the debtor’s consent. If the debtor’s consent is
not given, the obligation is not extinguished.
11. In question No. 10, if the debtor’s consent or permission is not given, but the third person
paid the creditor, his right is to proceed against the creditor, not the debtor, for
reimbursement.
12. Payment made by the debtor to a third person who is not the creditor shall never
extinguish the obligation.
13. D binds himself to pay C P10,000. The court in this case shall fix the period, since the
parties failed to fix the period.
14. Obligation for whose fulfillment a day certain has been fixed, shall be demandable only
when that day comes. Obligation with a resolutory period takes effect at once. But
terminates upon arrival of the day certain.
15. D binds himself to pay “little by little”. The obligation is for the benefit of the debtor.
16. The concurrence of two or more debtors and two or more creditors in the same obligation
is presumed to be a solidary obligation.
17. The creditor acquires real rights over the thing from the moment the thing is delivered and
not from the time the obligation to deliver it arises.
18. Solidarity may exist although although the creditors and the debtors may not be bound in
the same manner and by the same periods and conditions.
19. In obligations with a penal clause, the penalty shall substitute for damages and the
payment of interest in case of noncompliance.
20. The nullity of the principal obligation does not carry with it that of the penal clause.
21. Mora is a term used to denote delay or default in the performance of fulfillment of an
obligation. Mora accipiendi is that delay or default which is attributable to both parties in
reciprocal obligations.
22. The delivery to and acceptance by the creditor of a certified cashier’s check produces
payment of the debtor’s obligation.
23. Loss of a generic thing which is the object of an obligation, even without the fault of the
debtor, does not extinguish the debtor’s obligation.
24. An example of debt that may be compensated is that arising from a deposit.
25. Interests are recoverable if obligations consist in payment of money upon judicial demand.
26. Responsibility arising from negligence or culpa in the performance of an obligation is
demandable. Culpa aquiliana is that fault or negligence which results from breach of
contract.
27. Negligence signifies the idea of delay in the fulfillment of an obligation.
28. A person is obliged to deliver a determinate thing including its accessions and accessories,
even though they may not have been mentioned in the agreement.
29. An example of an obligation with a period is when A promises to pay B P10,000 one month
from the death of C.
30. Solidarity cannot exist if the creditors and the debtors are not bound in the same manner
and by the same periods and condition.
31. A solidarity debtor is at all times entitled to reimbursement from his co-debtors if the pays
for their obligations.
32. When the debtor is guilty of fraud in the fulfillment of an obligation, a creditor can demand
payment of damages and interest in addition to the penalty.
33. In joint obligation, if one of the debtors is insolvent, the others shall not be liable for the
payment of his share.
34. A solidary creditor cannot assign his rights without the consent of the others.
35. In case an extraordinary inflation or deflation of the currency stipulated should supervene,
the value of the currency at the time of the maturity of the obligation shall be the basis of
payment.
36. If the debt produces interest, payment of the interest shall not be deemed to have been
made until the principal has been covered or paid.
37. In alternative obligation, both parties have equal rights of choice.
38. The condition not to do an impossible thing shall render the obligation demandable at
once.
39. Payment by cession does not always extinguish the whole obligation.
40. In order that the creditor can demand the penalty in an obligation with a penal clause, it is
necessary that he show proof of actual damage suffered by him.
41. In an alternative obligation, the right of choice belongs to the creditor, unless it has been
expressly granted to the debtor.
42. The concurrence of 2 or more creditors of 2 or more debtors in one and the same
obligation does not imply that each of the creditors has a right to demand, or that each
one of the debtors is bound to render entire compliance with the obligation.
43. Novation which consists in substituting a new debtor in the place of the original one, may
not be made without the consent of the debtor.
44. In delegation, the insolvency of the new debtor will never revive the original debtor’s
obligation.
45. In expromission, the insolvency of the new debtor may at times revive the original debtor’s
obligation.
46. An obligation with a period may at times become a pure obligation demandable at once.
47. Fixed, savings, and current deposits made with a bank are considered money deposits but
are governed by contract of loan susceptible of compensation.
48. If the original obligation was subject to a suspensive or resolutory condition, the new
obligation shall be under the same condition, unless it is otherwise stipulated.
49. There is legal subrogation when, even without the knowledge of the debtor, a third person,
not interested in the obligation, pays the creditor.
50. The nullity of the penal clause carries with it that of the principal obligation.
51. There is no delay in an obligation not to do something.
52. The payment of debts is money shall be made in the currency stipulated, and if it is not
possible to deliver such currency, then in the currency which is legal tender in the
Philippines.
53. The creditor is not compelled to accept payment in check or other negotiable instruments.
54. When the fulfillment of the suspensive or resolutory condition depends upon the sole will of
the debtor, the conditional obligation shall be void.
55. The thing is deemed lost when it perishes, or goes out of commerce, or disappears in such
a way that its existence is unknown or it cannot be recovered.
56. When the debtor binds himself to pay when his means permit him to do so, the obligation
shall be deemed to be conditional.
57. When the conditions have for their purpose the extinguishment of an obligation to give, the
parties, upon the fulfillment of said conditions, shall return to each other what they have
received.
58. Whenever in an obligation, a period is designated, it is presumed to have been established
for the benefit of the debtor, unless from the tenor of the same, it should appear that the
period has been established in favor of the creditor.
59. Whenever in an obligation, a period is designated, it is presumed to have been established
for the benefit of both the creditor and the debtor.
60. If an obligation states that the debtors bind themselves jointly and severally, the obligation
is considered joint.
61. Proof of actual damage suffered by the creditor is not necessary in order that the penalty
in an obligation with a penal clause may be demanded.
62. An obligation payable “as soon as possible” is an obligation with a period for the benefit of
both the debtor and the creditor.
63. A stipulation to pay domestic obligation in foreign currency shall render it void but the
obligation remains to be valid.
64. Payment of the debtor’s obligation may be made by a third person even without the
knowledge and consent of the debtor
65. Payment made by one who does not have the free disposal of the thing due and capacity
to alienate it is not valid.
66. Payment to an incapacitated creditor is not valid, except when he has kept the thing
delivered, or insofar as the payment has been beneficial to him.
67. Unless it is otherwise stipulated, the extrajudicial expenses required by the payment shall
be for the account of the creditor.
68. In an obligation to deliver a generic thing, the loss or destruction of anything of the same
kind does not extinguish the obligation.
69. Condonation or remission is generally gratuitous.
70. The renunciation of the principal debt shall extinguish the accessory obligations; but the
waiver of the latter shall leave the former in force.
71. Solution indebiti is a contract.
72. Ten sacks of corn cannot be compensated legally by ten sacks of rice.
73. In civil obligation, the fulfillment of the obligation depends solely on the conscience of the
person.
74. Civil fruits are those produced by lands of any kind through cultivation.
75. A quasi-contract does not require consent of the contracting parties.
76. A is obliged by contract to deliver a specific car to B. A is not obliged to deliver the “jack”
of the car to B because the delivery of the jack is not mentioned in the contract.
77. The giving of money order for the full amount of the obligation is payment.
78. Prescription is the extinguishment of an obligation by the passage of time.
79. Payment made in good faith to any person in possession of the credit shall extinguish the
debtor’s obligation.
80. Payment means not only the delivery of money but also the performance, in any other
manner of an obligation.
81. A lender ca recover the principal of a loan in a usurious contract even if the contract is void
as to interest.
82. A person can assume an obligation in favor of another even without any contractual
relationship.
83. Resolutory condition is one which suspends the effectivity of the obligation until the
condition is fulfilled.
84. The obligation to give a determinate thing includes that of delivering all the accessions and
accessories, even though they may not have been mentioned in the agreement.
85. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action
for future fraud is void.
86. No person shall be responsible for events which could not be foreseen, or which, though
foreseen, were inevitable.
87. All rights acquired in virtue of an obligation are transmissible in the absence of any law or
stipulation to the contrary.

MULTIPLE CHOICE

1. Three of the following are requisites of an obligation. Which is the exception?

a. prestation b. efficient cause c. delivery d. passive subject
2. As a rule, every person obliged to give something is obliged to take care of it with the:
a. Diligence of a good father of the family.
b. Diligence stipulated.
c. Diligence required by the law.
d. Diligence of a father of a good family.
e. All of the above.
3. On July 1, 2011, A signs a promissory note and binds himself to pay X P100,000 plus 15%
per annum interest on June 30, 2013.
a. Before June 30, 2013, X can demand payment.
b. If on June 30, 2012, A is paying X, X cannot refuse the payment.
c. Because the period is for the benefit of the debtor, A can compel creditor X to accept
payment any date before June 30, 2013.
d. Because the period is for the benefit of the debtor and creditor, X can refuse any
tendered payment before June 30, 2013.
4. “I will give you this book 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 void, 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
required.
d. Combination of A and B.
5. Statement No. 1: When one of the solidary debtors cannot, because of his insolvency,
reimburse his share to the debtor paying the obligation, such share shall be borne by all his
co-debtor, in proportion to the debt of each.

Statement No. 2: Payment by a solidary debtor shall not entitle him to reimbursement from
his co-debtor shall not entitle him to reimbursement from his co-debtor if such payment is
made after the obligation has prescribed or become illegal.
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.
6. Statement No. 1: In an obligation with a penal clause, interest and damages, aside from
the penalty, may be awarded to the creditor if the debtor is guilty of fraud.

Statement No. 2: In an obligation that is impossible of division, the debt can be enforced
only by proceeding against all the debtors. If one of the debtors should be insolvent, the
other shall not be liable for his share.
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.
7. D obliged himself to give a specific car to C on December 25, 2015, stipulating that D is
liable even if the thing is lost due to fortuitous event, and without the need of a demand.
On the due date, the car got lost due to fortuitous event. Which of the following is correct?
a. Obligation remains to subsist, but converted into monetary consideration.
b. C can compel D to deliver another car.
c. C can require another person to deliver a car, expenses chargeable to D.
d. Obligation is totally extinguished.
8. D owes C P10,000 payable on December 25, while C owes D P10,000 payable on December
30. In here, C can set up compensation (or cum pondere) on December 25, and this is
called:
a. Legal b. Partial c. Judicial or “set-off” d. Facultative
9. The passage of time extinguishes the obligation:
a. Prescription
b. Fulfillment of resolutory codition.
c. Arrival of resolutory period.
d. Remission
e. Rescission
10. The delivery and transmission of ownership of thing by the debtor to the creditor as an
accepted equivalent of the performance of the obligations is called:
a. Decion en pago
b. Payment by cession
c. Consignation
d. Remission.
11. Which of the following is not a special mode of payment?
a. Decion en pago
b. Payment by cession
c. Tender of payment and consignation
d. Consignation alone without the need of tender of payment in cases provided for by
law.
e. None of the above.
12. D owes C P10,000 payable on December 25. Later, D forced C to sign a promissory note
for P10,000 payable on December 25. If all the other requisites of compensation are
present, are both debts extinguished?
a. Yes, under legal compensation.
 b. No, B’s consent was obtained by force.
c. Yes, with the approval of the court.
d. Not given
13. Which of the following is not a conditional obligation?
a. D to give C P1,000 if C passes the examination.
b. D to give C P1,000 if C has the means.
c. D to give C a horse if C marries X.
d. None of the above.
14. Example 1 – D obliged himself to give C a specific ring upon failure to give C P10,000.

Example 2 – D obliged himself to give C a specific ring. However, if he so desires, D may

instead give C P 10,000.
a. Both are valid obligations.
b. Only No. 2 is valid.
c. Only No. 1 is valid.
d. Both obligations are invalid because both depends upon the sole will of D.
15. A and B are solidary debtors of X and Y, solidary creditors to the amount of P4,000. On the
due date, X renounced in favor of A the entire obligation. Which of the following is correct?
a. B shall give A P2,000.
b. Y can still collect from A or B P2,000.
c. Y can collect from X P2,000.
d. Any of the three.
e. None of the above.
16. In novation, which of the following is incorrect?
a. If the new obligation is void. Original obligation shall subsist.
b. In expromission, the insolvency of the debtor shall not revive the action of the
creditor against the original debtor.
c. If the original obligation is subject to a suspensive condition, the new obligation is
not subject to the same condition unless stated.
d. If the condition is resolutory, the new is also resolutory condition, unless otherwise
stated.
17. The buyer has the right to the fruits of the thing from:
a. The time the thing is delivered.
b. The time the obligation to deliver the thing arises.
c. The time the sale is perfected.
d. The time the fruits are delivered.
18. Contracts entered into during lucid-interval:
a. Voidable b. unenforceable c. void d. none of the above
19. An absolutely simulated or fictitious contract is:
a. Voidable b. void c. unenforceable d. none of the above
20. The delay on the part of the creditor to accept the performance of an obligation:
a. Dolo incidente
b. Mora accipiendi
c. Dolo causante
d. Mora solvendi
21. The meeting in one person of the qualities of creditor and debtor with respect to the same
obligation is called:
a. Compensation
b. Merger
c. Remission
d. Novation
22. The extinguishment of obligations when two persons, in their own right, are debtors and
creditors of each other is called:
a. Compensation b. Merger c. Remission d. Novation
23. When the period is “on or before a date”, the debtor has the benefit of the period. This
benefit is lost and the obligation becomes demandable when
a. The debtors attempted to abscond.
b. After contracting the obligation, the creditor suspects the debtor to becoming
insolvent.
c. The guarantee given by the debtor is not acceptable to the creditor.
d. Demand by the debtor could be useless.
24. A was badly in need of money. He offered to sell his parcel of land to B for P100,000. B
agreed and paid A the P100,000 and A signed a receipt. When B wanted to register the
sale, he needed a Deed of absolute Sale. What can B do?
a. B may sue A to return the P100,000 under the legal maxim “No one shall enrich
himself at the expense of another”
b. B may possess and utilize A’s land as a buyer in good faith.
c. B may compel A to execute the Deed of Absolute Sale because the contract is valid.
d. B cannot get back the P100,000 because the contract is not enforceable.
25. Three of the following are requisites of cession in payment. Which is the exception?
a. One debtor and one creditor.
b. Complete or partial insolvency.
c. More than one debt.
d. Abandonment of all debtor’s debtor’s property not exempt from execution.
26. A promissory note signed by D and dated March 15, 2012 is worded as follows: “I promise
to pay C the sum of Fifty Thousand Pesos (50,000) provided that if she should fail in the
October, 2012 CPA Examination, she shall return to me said amount” The above note gives
rise to an obligation with
a. Suspensive condition
b. Casual condition
c. Resolutory condition
d. None of the above
27. B and C promise to deliver a particular car valued at P100,000 to M on or before
September 15, 2012. On September 15, 2012, M demanded delivery from B and C. B was
willing to deliver but C refused to deliver. In the case at bar,
a. An action for specific performance will lie against both B and C.
b. Both B and C shall be liable for P50,000 each with damages.
c. B shall be liable for P50,000 without damages and C shall be liable for P50,000 and
damages.
d. None of the above.
28. An obligation wherein various things are due, but the payment of all is required in order to
extinguish the obligation is called:
a. Simple obligation
b. Alternative obligation
c. Conjoint obligation
d. Facultative obligation
29. An obligation where only one prestation has been agreed upon is called:
a. Simple obligation
b. Alternative obligation
c. Conjoint obligation
d. Facultative obligation
30. An obligation where only one prestation has been agreed upon but the debtor may render
another substitution is called:
a. Simple obligation
b. Alternative obligation
c. Conjoint obligation
d. Facultative obligation
31. A, B and C executed a promissory note worded as follows: “We promise to pay X, Y, and Z
the sum of P90,000”.
a. A is obliged to pay to X, Y and Z P90,000.
b. A is obliged to pay to X P30,000.
c. A is obliged to pay to X P60,000.
d. None of the above.
32. If in the situation given in No. 31, there is a diamond ring pledged by the debtors,
subsequently returned by the creditors:
a. The total principal obligation is extinguished.
b. Only P30,000 of the obligation is extinguished.
c. Only P60,000 of the obligation is extinguished.
d. Principal obligation is not extinguished at all.
33. A is indebted to B for P20,000. X is the guarantor of A. B is also indebted to A for P8,000.
How much will X be liable as guarantor if B sues A, and A cannot pay?
a. P12,000 b. P20,000 c. P8,000 d. X has no liability
34. In three of the following cases, compensation shall not be proper. Which is the exception?
 a. Commodatum
b. Gratuitous support
c. Civil liability arising out of criminal offenses
d. Band deposit
35. Which of the following is an obligation with a period for the benefit of the debtor and the
creditor?
a. Payable when “you like”
b. Payable when debtor’s means permit him to do so.
c. Payable on or before December 25, 2012
d. Any of the above
36. D obliged himself to give C 100 cavans of rice on December 25, 2012. On said date, D
failed to make delivery, despite repeated demands by C. What is the remedy?
a. C can compel D to delivery 100 cavans of rice plus damages.
b. C has no remedy under the law.
c. C may ask a third person to deliver 100 cavans of rice to him, the value recoverable
from D plus damages.
d. D can rescind the contract because the object is indeterminate.
37. A and B are solidary debtors of W, X, Y and Z joint creditors to the amount of P2,000. How
much can W collect from debtor A?
a. W could recover P2000 from A, W, in turn, has to give P500 each to X, Y and Z.
b. W could recover P1000 from A, W, in turn, has to give P250 each to X, Y and Z.
c. W could recover P500 only from A.
d. W could recover P250 only from A.
38. A obliges himself to pay X P100,000 in 30 days plus a penalty of P20,000 if A fails to pay the
obligation in due time. A failed to pay the obligation in 30 days. What can X demand from
A?
a. The principal of P100,000 plus P 20,000 penalty.
b. The principal of P100,000 plus P 20,000 penalty, plus legal interest.
c. The principal of P100,000 plus legal interest.
d. The principal of P100,000 plus P 20,000 penalty, plus legal interest, plus damages.
39. The debtor loses the benefits of the period, and his obligation becomes demandable when:
a. Demand by the creditor would be useless.
b. The guarantees as promised and delivered by the debtor are not acceptable to the
creditor.
c. After contracting the obligation, the creditor suspects that the debtor is becoming
insolvent.
d. The debtor attempts to abscond.
40. D obliged to give C, either object No. 1 valued at P15,000; or object No. 2 valued at
P10,000; or object No. 3 valued at P5,000. All the objects were lost due to D’s fault in the
order stated.
a. D’s obligation is extinguished.
b. D’s obligation is to pay the value of object No. 1 plus damages.
c. C’s right is to demand the value of any of the objects plus damages.
d. None of the above.
41. In question No. 40, if object No. 1 is lost due to fortuitous event; No. 2 is lost due to
debtor’s fault; No. 3 is subsisting.
a. The right of C is to demand the value of object No. 2 plus damages.
b. C has no right because he did not communicate what object the debtor will deliver.
c. The obligation of D is to deliver object No. 3.
d. D’s obligation is totally extinguished.
42. A wrong committed independent of contract and without criminal intent is:
a. Culpa contractual
b. Culpa aquiliana
c. Delict
d. Quasi-contract
e. None of the above
43. Proof of pecuniary loss is not necessary for the award of:
a. Moral damages
b. Nominal damages
c. Temperate damages
d. Exemplary damages
e. None of the above
44. Proof of pecuniary loss is not necessary for the award of:
a. Liquidation damages
b. Exemplary damages
c. Actual damages
d. Temperate damages
e. None of the above
45. In the execution of obligation, liability for malice or bad faith:
a. Extends to natural consequences even if they exceed the debtor’s expectations.
b. Extends only to results intended but excluding exemplary damages.
c. Is demandable in all obligations but may be renounced in advance.
d. Extends not only to results intended but also to their foreseen consequences.
46. Extinguishes the obligation upon the happening of the condition:
a. Resolutory b. Suspensive c. Pure d. None of the
above
47. Extinguishing of debt may be made by creditor either verbally or in writing:
a. Partial payment b. Implied remission c. Express remission d. None of the
above
48. In contracts and quasi-contracts, the liability of the debtor who acted in good faith:
a. Extends to all natural and probable consequences of the breach of the obligation,
and which the parties have foreseen or could have reasonably foreseen at the time
the obligation was constituted.
b. Extends only to results intended but excluding exemplary damages.
c. Extends to all damages which may be reasonably attributed to the non-performance
of the obligation.
d. Extends to all damages which may be renounced in advance.
49. In delicts and quasi-delicts, the defendant shall be liable for:
a. Damages which are the natural and probable consequences of the act or omission
complained of whether or not such damages have been foreseen or could have
reasonably been foreseen by the offender.
b. Not only for results intended but also to their foreseen consequences.
c. Damages which may be renounced in advance.
d. Damages intended but excluding exemplary damages.
50. The creditor is entitled to recover damages and interest in addition to the penalty
stipulated:
a. When the parties so agreed.
b. When the debtor refuses to pay the penalty.
c. When the debtor is guilty of fraud in the fulfillment of the obligation.
d. All of the above.
51. Which of the following is not a ground for the extinguishment of an obligation?
a. Remission
b. Merger
c. Compensation
d. Death of either debtor or creditor
e. None of the above
52. The indemnity or compensation in money which the law gives to the injured party for the
breach of a contract or a duty is called:
a. Damages b. damage c. injury d. none of the above
53. The wrongful act or tort which causes loss or harm to another is called:
a. Damages b. damage c. injury d. none of the above
54. The loss or harm suffered by one person on his property is called:
a. Damages b. damage c. injury d. none of the above
55. When the debtor binds himself to pay when his means permit him to do so, the obligation
is:
a. Pure b. Conditional c. With a period d. Simple e. None of the
above
56. Every obligation whose performance does not depend upon a future or uncertain event, or
upon a past event unknown to the parties, is demandable at once. This refers to:
57. This mode of extinguishment of obligations shall take place when two persons, in their own
rights, are creditors and debtors of each other.
a. Compensation.
b. Condonation or remission of Dept.
c. Confusion or Merger of Rights.
 d. Novation.
58. When there is a return of what was not lawfully required, there is:
a. Solutio indebiti
b. Negotiorum gestio
c. Cession en pago
d. None of the above
59. Consignation alone shall give rise to the extinguishment of an obligation, EXCEPT:
a. When the creditor is absent or unknown, or does not appear at the place of
payment.
b. When he is incapacitated to receive the payment at the time it is due.
c. When two or more persons claim the same right to collect.
d. When the title of the obligation has been lost.
e. None of the above.
60. Obligations may be modified by:
a. Changing their object or principal conditions.
b. Substituting the person of the debtor.
c. Subrogating a third person in the rights of the creditor.
d. All of the above.
61. The following are causes vitiating consent, EXCEPT:
a. Violence d. Fraud
b. Intimidation e. None of the above
c. Mistake
62. Remission is:
a. Essentially gratuitous c. Absolutely gratuitous
b. Naturally gratuitous d. All of the above
63. Statement No. 1: The debtor of a thing cannot compel the creditor to receive a different
one, although the latter may be of the same value or more valuable than that which is due.

Statement No. 2: In dation in payment, ownership of the thing delivered is transferred to

convert the property into cash and out of the proceeds to extinguish the obligation partially.
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.
64. Effect of the loss of the thing in a facultative obligations. Which is incorrect?
a. Before substitution: if the principal thing is lost due to fortuitous event, there is no
more obligation.
b. Before substitution: if the substitute thing is lost due to debtor’s fault, there is no
more obligation.
c. After substitution, if the principal thing is lost, the debtor is no longer liable even if it
was lost due to his fault.
d. None of the above.
65. On October 4, 2012, A is indebted to B for P50,000 for a 20-day period. A proposed to B
that X will pay A’s debt, and that A will be free from all liabilities. B and X agree to the
proposal. On October 25, 2012, when B tries to collect from X, he finds that X is insolvent.
At the time of delegation, X was already insolvent but this was not known to A. The
insolvency is not of public knowledge. So B sues A on the ground that it was A who made
the proposal and that A really guaranteed X’s solvency. Decide.
a. A is liable because he is presumed to have guaranteed X’s solvency.
b. A is not liable, because A does not know the insolvency of X at the time of
delegation and neither was the insolvency of public knowledge.
c. A is liable because he did not exercise due diligence in determining the insolvency of
X.
d. A is liable because X agreed to the proposal to make himself solidarily liable for the
obligation.
66. D1 and D2 are joint debtors of C1, C2, C3 and C4, solidary creditors to the amount of
P1,000. How much can C3 collect from D1?
a. 500 b. 1000 c. 250 d. 125
67. D1 and D2 are solidary debtors of C1, C2, C3 and C4, joint creditors to the amount of
P1,000. How much can C3 recover from D1?
a. 500 b. 1000 c. 250 d. 125
68. Contract with a false cause is:
 a. Voidable b. void c. unenforceable d. none of the above
69. A thing is considered lost when it:
a. Perishes
b. Goes out of commerce
c. Stolen or robbed
d. All of the above
70. The debtor who cedes or assigns his property to his creditor in payment of his debt shall be
released from his obligation.
a. To the extent of the net proceeds of the thing leased.
b. To the extent allowed by the creditor.
c. Only to the extent of the net proceeds of the thing assigned.
d. Totally extinguished under dation in payment.
71. Assignment or abandonment of all the properties of the debtor for the benefit of his creditor
in order that the latter may sell the same and apply to proceeds thereof to the satisfaction
of his credits:
a. Remission
b. Expromission
c. Payment by cession
d. None of the above
72. Obligation which is susceptible of partial performance based on the purpose of the
obligation:
a. Solidary
b. Divisible
c. Joint
d. None of the above
73. Payment of the obligation by a solidary debtor shall not entitle him to reimbursement from
his co-debtors
a. If such payment was made before the obligation is due.
b. If such payment was made after the obligation has prescribed or become illegal.
c. If such payment was made in compliance with the demand made to him by all the
creditors.
d. If such payment was made after the obligation has become due and demandable
and notice of payment was made only to him.
74. Statement No. 1: When the fulfillment of the suspensive or resolutory condition depends
upon the sole will of the debtor, the conditional obligation shall be void.

Statement No. 2: If the original obligation is subject to a suspensive or resolutory condition

and the contract is novated, the new obligation shall be under the same conditions unless
otherwise stipulated.
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.
75. Acceptance of commercial documents is equivalent to payment when
a. The check has been cashed.
b. The check became valueless due to the creditor’s fault.
c. Creditor is in estoppel.
d. All of the above.
76. A is obliged to give B his only car on September 1, 2012. On the said date, A did not
deliver. On September 2, 2012, an earthquake completely destroyed the car. Is A still
liable?
a. No. Considering that no demand to deliver was made by A and the specific thing was
lost due to fortuitous event, the obligation is extinguished.
b. No. The obligation is extinguished, even if the debtor is already in default because
the debtor can plead impossibility of performance.
c. Yes. A is already in legal delay, thus the obligation to deliver the lost specific thing
is converted into monetary claim for damages.
d. Yes. The creditor can instead demand for substitute of equivalent value from the
debtor.
77. On June 1, 2013, S sold to B the former’s horse for P10,000. S promised to deliver on June
25, 2013, while B did not promise when to pay.
 a. B can demand delivery from S anytime after June 1, upon payment of the price of
the sale.
b. S cannot demand payment until he delivers the horse.
c. Obligation of B to pay is subject to the condition that S will deliver the horse.
d. S can demand from B payment anytime from June 1, because B’s obligation is not
subject to any condition.
78. Example No. 1: D owes C P10,000 due on December 25. C owes D P6,000 due on
December 25. D’s obligation is guaranteed by G. On the due date, D is insolvent. G is
liable to C for P10,000, he (G) cannot set up compensation because he is not a principal
debtor.

Example No. 2: D owes C P10,000 payable on December 25. Later, D through intimidation,
was able to make C sign a promissory note stating that C is indebted to D for the same
amount. In here, D cannot be required to pay C P10,000 because he (D) can set up
compensation against C.
a. Both examples are true.
b. Both the false.
c. Only No. 1 is true; No. 2 is false.
d. Only No. 1 is false; No. 2 is true.
79. A sold to B the former’s horse for P5,000. No date is fixed by the parties for the
performance of their respective obligations. The obligation of A is:
a. To deliver the horse immediately as there is a perfected contract.
b. To deliver the horse upon the payment of B of P5,000.
c. To deliver the hose within a reasonable time of two months from the contract date.
d. To rescind the contract as there is no time fixed for the delivery and payment.
80. The act of abandoning or transferring all the debtor’s property to his creditors so that the
creditors may sell them, and out of its net proceeds, to recover their claims is called:
a. Dacion en pago
b. Payment by cession
c. Tender of payment and consignation
d. remission
81. The substitution or change of an obligation by a subsequent one which extinguishes or
modifies the first, either by changing the object or principal conditions, or by substituting
the person of the debtor, rights subrogating a third person in the rights of the creditor is
called:
a. Commodatum
b. Compensation
c. Merger
d. novation
82. X obliged himself to give to Y his brand-new Rolex watch if the latter cannot make a circle
that is at the same time a square.
a. The obligation is unenforceable because the condition is immoral.
b. The condition is void because of the positive impossible condition.
c. The obligation is valid because the impossible condition is negative.
d. The obligation is void, not enforceable.
83. Which of the following is an obligation with a period for the benefit of the debtor?
a. An obligation payable little by little.
b. An obligation payable when the debtor’s means permit him to do so.
c. An obligation payable within 2 years on demand.
d. An obligation payable on or before December 25, 2012.
84. In tender and consignation: if after consignation is made, the creditor allows the debtor to
withdraw the thing deposited in court, which of the following statements is incorrect?
a. Co-debtors, guarantors, and sureties are released from the obligation unless they
consented.
b. The obligation remains to subsist.
c. The obligation is extinguished.
d. None of the above.
85. A-1 and A-2 are solidary debtors of B-1, B-2 and B-3, joint creditors in the amount of
P90,000. How much can B-3 collect from A-2?
a. B-3 could collect P30,000 from A-2.
b. B-3 could collect P90,000 from A-2 and give P30,000, each to B-1 and B-2.
c. B-3 could collect P45,000 from A-2 and give P13,000, each to B-1 and B-2.
 d. B-3 could collect P15,000 from A-2 and P13,000 from A-1.
86. In three of the following enumerations, the proper remedy is reformation of the instrument.
Which is the exception?
a. If mistake, fraud, inequitable conduct or accident has prevented the meeting of the
minds of the contracting parties.
b. If the true intention of the contracting parties is not expressed in the instrument
purporting to embody the agreement by reason of mistake, fraud, inequitable
conduct or accident.
c. If the mutual mistake if the parties causes the failure of the instrument to disclose
their real agreement.
d. If one party was mistaken and the other acted fraudulently or inequitably in such a
way that the instrument does not show their true intention.
87. Statement No. 1: The giving of a negotiable check in payment of debt, accepted by the
creditor, is equivalent to payment.

Statement No. 2: In case extra-ordinary inflation should supervene, the basis of payment is
the value of the obligation at the time the obligation was constituted.
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.
88. Statement No. 1: In solution indebiti, the contract of the parties is the basis for damages in
case of non-performance.

Statement No. 2: “Dolo”, as a ground for awarding damages, is the deliberate intention to
cause damage or injury to another person.
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.
89. In which of these cases is advanced payment recoverable by the debtor?
a. If the payment is only interest credited for the proper period.
b. If the debtor believed that the obligation was already due and demandable.
c. If the debtor was unaware of the period.
d. If the obligation is reciprocal and both parties advanced payment.
90. A judicial relation known as negotiorum Gestio takes place.
a. When a person voluntarily takes charge of another’s abandoned business or property
without the owner’s consent.
b. When something is received and there is no right to demand it and it was delivered
through mistake.
c. When a person is appointed by a court to take the property or business of another.
d. None of the above.
91. A owes B P2,000 demandable and due on September 10, 2012. B, on the other hand, owes
A P2,000 demandable and due on or before September 30, 2012. If B claims compensation
on September 10, 2012, can A rightfully oppose?
a. No. B who was giving the benefit of the term, may claim compensation because he
could then choose to pay his debt on September 10, 2012 which is actually “on or
before September 30, 2012.
b. Yes. A can properly oppose because for compensation to take place, mutual
consent of both parties is necessary.
c. Yes. A can properly oppose and if B still refuses to accept his payment made on
September 30, 2012, A can deposit his payment in court.
d. None of the above.
92. Mr. Debtor owes Mr. Creditor who has two (2) legitimate emancipated children, P50,000
payable on December 31, 2012.
a. If Mr. Debtor dies before December 31, 2012, Mr. Creditor cannot collect from the
heir of Mr. Debtor.
b. If Mr. Debtor dies before December 31, 2012, Mr. Creditor can collect from the heirs
of Mr. Debtor.
c. If Mr. Creditor dies, his two (2) legitimate emancipated children cannot recover from
Mr. Debtor his obligation.
 d. If both Mr. Debtor and Mr. Creditor die, the heirs of Mr. Creditor can collect from the
heirs of Mr. Debtor.
93. A and B are solidary debtors of X and Y, solidary creditors to the amount of P4,000. On the
due date, X renounced in favor of A the entire obligation. Which of the following is correct?
a. B shall give A P2,000.
b. Y can still collect from A or B P2,000.
c. Y can collect from X P2,000.
d. Any of the three.
e. None of the above.
94. A owes B P5,000. C is the guarantor of A. A was able to pay B P3,000, thus leaving P2,000
unpaid. X, against the will of A and without the knowledge of the partial payment made by
A, paid B the sum of P5,000. How does this payment affect the obligation?
a. The obligation is extinguished. X, however, cannot recover any amount from A since
the payment was made against the will of A. Instead, X can demand payment from
C, the guarantor, to the amount of P5,000.
b. The obligation is extinguished. X, however, can demand only P2,000 from A as this
is the amount which benefited A. If A cannot pay, X, having been subrogated into
the rights of B can proceed against guarantor C.
c. The obligation is extinguished. X can demand P2,000 from A, but if A cannot pay, X
cannot ordinarily proceed against guarantor C because having paid against the will
of A, X is not entitled to subrogation.
d. X’s payment, having been made against the will of A does not extinguish the
obligation.
95. The officious manager or gestor is liable for any fortuitous event, EXCEPT:
a. If he has undertaken risky operations which the owner was accustomed to embark
upon.
b. If he has preferred his won interest to that of the owner.
c. If he fails to return the property or business after demand by the owner.
d. If he assumed the management in bad faith.
e. None of the above.
96. A tie or juridical relation. Which, by virtue of a payment of what is not due, made through
mistake, is created between the person who paid and the one who received the payment,
compelling the latter, in consequence thereof, to return what he has received.
a. Solution indebiti
b. Natural obligation
c. Civil obligation
d. Moral obligation
e. None of the above.
97. Whenever in an obligation a period is designated, it is presumed to have been established
for the benefit of the:
a. Debtor
b. Creditor
c. Both the creditor and the debtor
d. None of the above.
98. The debtor shall lose every right to make use of the period EXCEPT:
a. When after the obligation has been constituted, he becomes insolvent, unless he
gives a guaranty or security of the debt.
b. When he does not furnish a guaranty or security to the creditor.
c. When the debtor attempts to abscond.
d. When the debtor violates any undertaking in consideration of which the creditor
agreed to the period.
e. None of the above.
99. An obligation wherein various things are due, but the payment of one of them is sufficient
to extinguish, the obligation is called:
a. When after the obligation has been constituted, he becomes insolvent, unless he
gives a guaranty or security of the debt.
b. When he does not furnish a guaranty or security to the creditor.
c. When the debtor attempts to abscond.
d. When the debtor violates any undertaking in consideration of which the creditor
agreed to the period.
e. None of the above.
100. Which of the following is not a ground for the payment of damages?
 a. Fraud or dolo.
b. Negligence or culpa
c. Delay or mora
d. Contravention of the tenor of the agreement.
e. None of the above.
101. No person shall be responsible for events which could not be foreseen, or which, though
foreseen, were inevitable, EXCEPT:
a. When the debtor is guilty of delay.
b. When the nature of the obligation requires the assumption of risk.
c. When the law expressly provides for the debtor’s liability even in cases of fortuitous
events.
d. When the subject matter of the obligation is a generic thing.
e. None of the above.
102. S sold to B a specific car for P20,000 to be paid as follows: P5,000 upon delivery of the
car to B, and the balance at the rate of P500 every three months thereafter.
Subsequently, the car got burned in the possession of B, without his fault, before payment
of the balance. Is B obliged to pay the balance?
a. No, because the car was lost without his fault, B’s obligation is extinguished.
b. No, because this is an installment sale, until the buyer pays the price of the sale, S
remains to be the owner.
c. Yes, because of the principle “the thing perishes with the owner”.
d. Yes, but S must give another car because of the principle “Genus Numguam Perit” or
“Genus never perishes”.
103. D obliged himself to give C a specific car if the latter cannot make a circle that is at the
same time a square.
a. The obligation is imposible, therefore void.
b. The obligation is void because the condition is outside the commerce of man.
c. D cannot of man.
d. Answer not given.
104. If refers to a joint obligation.
a. One in which each debtor is liable for the entire obligation, and each creditor is
entitled to demand the whole obligation.
b. One in which either one of the parties is indispensable and the other is not
necessary.
c. One in which the obligation of one is a resolutory condition of the obligation of the
other, the non-fulfillment of which entitles the other party to rescind the contract.
d. One in which each of the debtors is liable only for a proportionate part of the debt
and each creditor is entitled only for a proportionate part of the credit.
105. Which of the following statements is true?
a. A condition always refers to the future.
b. The debtor loses the right to the period if he does not give any security to the
creditor
c. The condition not to do an impossible thing does not render the obligation void.
d. In alternative obligations, the right to select which of the prestation shall be
delivered belongs to the creditor, unless expressly given to the debtor.
106. S sold to B a determinate car for P600,000. No date is stipulated for the seller to deliver
nor for the buyer to pay the price.
a. S can require B to pay at anytime.
b. S can consider B guilty of default if B does not pay upon demand by S.
c. B is required to pay if S delivers the car and demand for payment is made.
d. All of the above.
107. An obligation where each of the debtors is liable only for a proportionate part of the debt,
and each creditor is entitled only to a proportionate part of the credit is called:
a. Conjoint obligation.
b. Joint obligation.
c. Solidary obligation.
d. Divisible obligation.
108. An obligation where each debtor is liable for the entire obligation, and each creditor is
entitled to demand payment of the whole obligation is called:
a. Conjoint obligation.
b. Joint obligation.
c. Solidary obligation.
 d. Indivisible obligation.
109. A, B and C executed a promissory note worded as follows: “We promise to pay X, Y and Z
the sum of P90,000. (Sgd.) A, B and C”
a. A is obliged to pay X, Y and Z P90,000.
b. A is obliged to pay X P30,000.
c. A is obliged to pay X P60,000.
d. A is obliged to pay X P10,000.
e. None of the above.
110. Statement No. 1: “ I will give you a specific car if you will not marry X this year (2012). If
by the end of 2012, both parties are alive and no marriage has taken place, my obligation
is extinguished.

Statement No. 2: “I will give you P10,000 if you cannot make a dead man alive. This is
impossible condition, not demandable.

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.
111. Statement No.1: The receipt of the principal obligation without reservation as to the
payment of interest shall raise a conclusive presumption that the interest is also paid.

Statement No.2: The receipt of the latter installment of a debt without reservation as to
prior installment, shall not raise a conclusive presumption that the latter installment is also
paid.

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.
112. Statement No. 1: If the obligation does not fix a period, but from its nature and the
circumstances, it can be inferred that a period was intended, the court may fix the
duration thereof. Once it is fixed by the court, the parties cannot change the fixed dte for
performance.

Statement No. 2: “ I will give you P10,000 as soon as possible”. This is an obligation with
a period for the benefit of both the debtor and creditor.

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.
113. A and B are jointly and severally liable to C for P20,000. A is a minor.
a. C can collect P20,000 from B.
b. C can collect P10,000 from A, that is the share of B.
c. C can collect P20,000 because minority is not a defense.
d. C can collect P10,000 from B.
114. The debtor shall lose very right to make use of the period except:
a. When he does not furnish a guaranty or security to the creditor.
b. When after the obligation has been constituted, he becomes insolvent, unless he
gives a guaranty or security for the debts.
c. When the debtor attempts to abscond.
d. When the debtor violates any undertaking in consideration of which the creditor
agreed to the period.
115. Which of the following is not an obligation with a period?
a. “Payable soonest”.
b. An obligation payable little by little.
c. Payable “within 2 years from today”.
d. All of the above.
116. If the obligation is payable in foreign currency,
a. The obligation is void.
b. The obligation is valid, but the stipulation is void.
 c. The creditor can compel the debtor to pay in foreign currency as per agreement.
d. The stipulation and the obligation are void.
117. Which of the following statement is false?
a. The nullity of the principal carries with it that of the penal clause.
b. Proof of actual damages suffered by the creditor is not necessary in order that the
penalty may be damaged.
c. I will pay you P10,000 “soonest” is for the benefit of the debtor.
d. Condonation is essentially gratuitous.
118. Which of the following is not a special mode of payment?
a. Dacion en pago.
b. Payment by cession.
c. Tender of payment.
d. None of the above.
119. A owes B P100,000 due on December 12, 2013. A mortgaged his house to B as a
guaranty for the debt. Shortly, however, the mortgaged house was completely destroyed
by typhoon “Nitang”. Thereafter, B demanded payment from A on October 28, 2013. Is
B’s demand valid?
a. No. The obligation is one with a definite period, thus the creditor cannot demand
fulfillment of the obligation as such would be prejudicial to the rights of the debtor.
b. No. The obligation is extinguished because the object of the obligation is loss
through a fortuitous event.
c. Yes. The debt becomes due at once because the guaranty was lost even through a
fortuitous event, unless the debtor can mortgage another property that is equally
satisfactory.
d. Yes. The debt becomes due at once because from the tenor of the obligation, the
period established is for the benefit of the creditor solely thereby giving the creditor
the right to demand performance even before the date stipulated.
120. A sold his cow to B for P2,500. No date was stipulated for the delivery of the cow. While
still in the possession of A, the cow gave birth to a calf.
a. A is entitled to the calf because it was born before his obligation on delivery the cow
arises.
b. A is entitled to the calf as B has not paid the price.
c. B is entitled to the calf which was born after the perfection of the contract.
d. B, in order to be entitled to the calf, should pay additional cost on the calf to be
agreed upon by both parties.
121. Example No.1 : D promised to give C a specific car valued P100,000 after C has killed X.
Later, after the killing, the contract was novated. Instead of giving C a specific car, he will
just give a specific land to be delivered on February 28, 2013. Meantime, both parties
died. In here, the heirs of C may comple the execution of the second contract, that is, the
delivery of the specific land.

Example No. 2 : S sold to B a specific residential house situated in Bulacan for P1 million.
Unknown to both parties, one (1) hour before the sale, the property was totally gutted by
fire caused by electrical defect. In here, B can be required to pay the price of the sale,
because the object is determinate. S’s obligation to deliver is extinguished, while B’s
obligation remains to be subsist.

a. Both examples are true.

b. Only No. 2 is true, while No.1 is false.
c. Only No. 2 is false, while No. 1 is true.
d. Both examples are false.
e. None of the above.
122. “ I’ll give you my car one year after your death.” The obligation is:
a. Valid, because the event is sure to come.
b. Valid, the obligation is conditional.
c. Valid, but disregard the condition.
d. Void, legally possible.
123. Mr. Cruz executed a first mortgage of his house in favor of Mr. Dizon on May 15, 2015 to
guaranty a mortgage loan of P200,000 due for payment on May 15, 2018. On September
16, 2017, the house was completely destroyed by typhoon. On September 18, 2017, Mr.
Dizon demanded payment from Mr. Cruz of the loan. Is Mr. Dizon’s demand for payment
valid?
 a. No. The obligation is one with a definite period, so the creditors cannot demand
payment until the definite due date arrives.
b. No. The obligation is extinguished because the object of the obligation is lost
through a fortuitous event.
c. Yes. The obligation becomes due at once because the benefit is solely for the
creditor. The creditor can demand payment even before the date stipulated.
d. Yes. The obligation becomes due t once because the guaranty was lost even through
a fortuitous event, unless the debtor can mortgage another property equally
satisfactory.
124. S sold to B a specific car for P10,000 and promised to deliver on December 25, 2014.
The next day, after the sale is made, he sold the same car to X and delivered it to X on
the same day. If no delivery is made by S to B on December 26, 2014, which of the
following is correct?
a. S is not in default because there was no demand.
b. B can cancel the contract between S and X because the contract of S and B was
perfected ahead of X.
c. S is liable to B for the value of the car plus damages.
d. S is in default, even if there was no demand. Hence, he will anser for damages.
125. Change of persons or objects:
a. Confusion.
b. Novation.
c. Solutio indebiti.
d. None of the above.
EXERCISES IN CONTRACTS INCLUDING CPA EXAMINATION QUESTIONS
TRUE OR FALSE

1. Obligations and contracts are identical.

2. The object of a contract of sale is its subject matter.
3. If a valid contract is novated to void contract, both contracts are considered void.
4. Without contract, a person cannot be liable to another.
5. Consummation of a contract is manifested by the offer and acceptance.
6. The statement of a false cause in contracts shall render them void, if it should not be
proved that they were founded upon another cause which is true and lawful.
7. Annulment is available only to persons who are obliged principally or subsidiarily. It is not
available to third persons.
8. If mistakes, fraud, inequitable conduct, or accident has prevented a meeting of the minds of
the parties, the proper remedy is not reformation of the instrument but annulment of the
contract.
9. The action or defense for the declaration of the inexistence of void contract does not
prescribe.
10. Voidable contracts cannot be ratified.
11. A contract which is the direct result of a previous illegal contract, is also void and inexistent.
12. An offer becomes effective even with the death of either party after acceptance is
conveyed.
13. When one party is insane and the other is an unemancipated minor, the contract is
unenforceable.
14. Accidental elements of a contract are those agreed upon by the parties, and cannot exist
without being stipulated.
15. X advertised his lot for sale in a newspaper of general circulation. The advertisement states:
“For sale: 500 sq. m. located at No. 3333 Buendia Avenue, Makati, Metro Manila. Price:
P500,000.00. Term of payment: Cash only”. W accepted the offer by sending a letter to X
which the latter received. X can still back out from his offer because his advertisement is
merely an invitation to make an offer.
16. Unless it appears otherwise, business advertisement of things for sale are not definite
offers, but mere invitations to make an offer.
17. The contracting parties may establish such stipulation, clauses, terms and conditions as
they may deem convenient, provided they are not contrary to law, morals, good customs,
public order, or public policy.
18. Contacts must bind both contracting parties; their validity or compliance cannot be left to
the will of one of them.
19. Contracts take effect only between the contracting parties.
20. Consensual contracts are not perfected until the delivery of the object of the obligation.
21. Real contracts are perfected by mere consent.
22. An offer becomes ineffective upon the death, civil interdiction, insanity, or insolvency of
either party before acceptance is conveyed.
23. When the offer has allowed the offeree a certain period to accept , the offer may be
withdrawn at any time before acceptance, except when the option is founded upon a
consideration, as something paid or promised.
24. Acceptance made by letter or telegram does not bind the offerer except from the time it
came to his knowledge. The contract, in such a case, is presumed to have been entered into
in the place where the offer was made.
25. When the offerer has allowed the offeree a certain period to accept, the offer may be
withdrawn at any time before acceptance by communicating such withdrawal, except when
the option is found upon a consideration as something paid or promised.
26. Mutual promise to marry if orally entered into is unenforceable.
27. The action for annulment on the ground of fraud shall be brought within four (4) years from
the time of the perfection of contract.
28. Misrepresentation made is good faith is not fraudulent but may constitute error.
29. In order that fraud may make a contract voidable, it should be serious and should not have
been employed by both contracting parties. Incidental fraud only obliges the person
employing it to pay damages.
30. If one party was mistaken and the other acted fraudulently or in such a way that the
instrument does not show their true intention, the former may ask for the annulment of the
instrument.
31. The interpretation of obscure words or stipulations in a contract shall not favor the party
who caused the obscurity.
32. Advertisement for bidders are simply invitations to make proposals, and the advertiser is not
bound to accept the highest or lowest bidder, unless the contrary appears.
33. Contracts entered into during a lucid interval are valid. Contracts agreed to in a state of
drunkenness or during a hypnotic spell are binding.
34. In order that mistake may invalidate consent, it should refer to the substance of the thing
which is the object of the contract, or to those conditions which have principally moved one
or both parties to enter into the contract.
35. A threat to enforce one’s claim through competent authority, if the claim is just or legal,
does not vitiate consent.
36. Violence or intimidation shall not annul be obligation, if it was employed by a third person
who did not take part in the contract.
37. Failure to disclose facts, when there is a duty to reveal them, as when the parties are bound
by confidential relations, constitutes fraud.
38. A mere expression of an opinion does not signify fraud, unless made by an expert and the
other party has relied on the former’s special knowledge.
39. Contracts take effect only between the parties, their assigns and heirs, except in cases
where the rights and obligations arising from the contract are not transmissible by their
nature, or by stipulation or by provision of law. The heir is not liable beyond the value of
the property her received from the decedent.
40. If one or both debts are voidable, the same may be compensated provided they are not yet
avoided.
41. An agreement by its term that it be performed within a year from the making thereof is
enforceable even if entered into orally.
42. An offer made through an agent is perfected from the time acceptance is communicated to
the principal.
43. If the cause is not stated in the contract, it is presumed that it is unlawful.
44. When the real agreement of the parties stated in a contract is void, the parties can ask for
reformation of the instruments.
45. By provision of the law on contracts, where the amount involved in the contract exceeds
P500, it must appear in writing or in public instrument. A contracted a loan of P5,000 from
B which is not reduced in public instrument or writing. B cannot recover the loan because
the contract is not valid.
46. In the case of an illegal contract where there is a criminal offense, the parties cannot be
prosecuted if they are both in pari-delicto.
47. Persons who are capable cannot allege the incapacity of those with whom they contracted.
48. The action for rescission is subsidiary; it cannot be instituted except when there is no other
legal means to obtain reparation for damages suffered.
49. Void contracts cannot be retified. Neither can the right to set up the defense of illegality be
waived.
50. Delivery of the subject matter is necessary to the perfection of the contract of sales.
51. Contracts entered into during a lucid interval are voidable.
52. There is intimidation when in order to wrest consent, serious or irresistible force is
employed.
53. Misrepresentation made in good faith is not fraudulent but may constitute error.
54. Cause is the essential or more proximate purpose which the parties have in view of entering
into the contract.
55. Contracts shall be obligatory, in whatever form they may have been entered into, provided
all the essential requisites for their validity are present.
56. When, there having been a meeting of the minds of the parties to a contract, their true
intention is not expressed by reason of mistake, fraud, inequitable conduct or accident, one
of the parties may ask for the reformation of the instrument.
57. Qualified acceptance is considered counter-offer.
58. Consent is the manifestation of the meeting of the offer and the acceptance upon the thing
and the cause of the contract.
59. Acceptance made by letter or telegram does not bind the offerer except from the time it
came to his knowledge.
60. Contracts agreed to in a state of drunkenness or during a hypnotic spell are valid.
61. Dolo causante shall make a contract voidable.
62. Dolo incidente only obliges the person employing it to pay damages.
OBLICON MULTIPLE CHOICE

1. These persons are bound by contracts:

a. Contracting parties
b. Assigns or Assign
c. Heirs
d. All of them
2. Who is liable for the loss of the subject matter by fortuitous event?
a. Creditor
b. Debtor
c. Both creditor and debtor
d. None of them
3. Contract that is made for a valuable consideration is:
a. Onerous
b. Gratuitous
c. Onerous and gratuitous
d. None of the them
4. A intimidated B to marry A’s daughter. After a year, B would like to file action for
annulment but could not do so because A was around to intimidate him. The marriage
contract is:
a. Resicissible
b. Voidable
c. Void
d. unenforceable
5. The following, except one, are the characteristics of void or inexistent contract. Which is
the exception?
a. The defense of illegality of the contract is available to third persons whose interests
are not directly affected.
b. They are not subject to ratification.
c. The right to raise defense of illegality cannot be waived.
d. The action or defense for declaration of their nullity or inexistence of the contract
does not prescribe.
6. Example 1: G, guardian of W, sold W’s house valued at P50,000 for P37,500 or a lesion by
one-fourth of the value

Example 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. Only no. 1 is rescissible.
c. No. 2 is voidable because there is an error or mistake.
d. Both contracts are valid and enforceable.
7. When there is concurrence of offer and acceptance, there is:
a. Payment
b. Revocation
c. Consent
d. None of the above
8. Essential requisites of a contract:
a. Consent
b. Cause
c. Subject
d. All of them
9. A contract where both parties are incapable of giving consent is:
a. Void
b. Voidable
c. Unenforceable
d. rescissible
10. the stage of “conception” of a contract is:
a. When the contract is fully executed.
b. When the parties come to an agreement.
c. When negotiations are in progress.
d. When there is a meeting of the parties’ minds.
11. In order that fraud may make a contract voidable,
 a. It may be incidental but should have been employed by both parties.
b. It should be serious and the parties must be in pari delicto.
c. It should be serious and should not have been employed by both contracting parties.
d. It may be incidental but both parties should not be in pari delicto.
12. Simulation of Contract – Absolute or relative. Relative when:
a. Parties are not bound at all.
b. The contract is void.
c. The parties conceal their true agreement.
d. None of the above.
13. Mr. Esguerra, a former government employee, suffered from severe paranoia and was
confined in the mental hospital in 2001. 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 the mining claims. In 2007, he sued to annul the sale claiming
that he was mentally incapacitated at the time of sale. The sale in question was:
a. Illegal
b. Void
c. Voidable
d. valid
14. Which of the following contracts is enforceable even if not executed in writing?
a. Lease of personal property for 2 years.
b. An agreement for the sale of immovables.
c. Lease of immovables for a period longer that one year.
d. A representation as to the credit of a third person.
e. None of the above.
15. A contract where one of the parties is incapabale of giving consent is:
a. Resicissible
b. Voidable
c. Void
d. Unenforceable
e. None of the above.
16. In three of the following defective contracts, ratification cleanses the defects. Which is the
exception?
a. Both parties are incapable of giving consent.
b. Sale of immovable property or interest orally entered into.
c. Sale of a piece of land thru an agent, the authority is oral.
d. Contracts entered into by a person who has been given no authority.
17. In a contract, as written, D promises to pay C P10,000 on September 15, 2012. The
consideration received by D is not stated in the contract.
a. The contract is valid because the cause is always presumed to exist.
b. The contract is valid so long as it is in writing.
c. The contract is valid because cause is not essential to a contract.
d. The contract is void because the cause is not stated.
18. S entered into a contract with B by threatening B that if B does not agree to make the
contract, S will publish defamatory matter concerning B’s wife.
a. The contract is valid because the defamatory matter to be published does not relate
to B, the contracting party.
b. The contract is voidable because such publication when carried out whether true or
not will cause a serious harm to B and his wife.
c. The contract is unenforceable but B is entitled to damages the moment the
publication is made.
d. Contract is void.
19. Example no. 1: D owes C P10,000 due on December 25. C owes D P6,000 due on
December 25. D’s obligation is guaranteed by G.

Example no. 2: D owes C P10,000 payable on December 25. Later, D, through intimidation,
was able to make C sign a promissory note stating that C is indebted to D for the same
amount. In here, D cannot be required to pay C P10,000 because he (D) can set up
compensation against C.
a. Both examples are true.
b. Both are false.
c. Only no. 1 is true; No. 2 is false.
d. Only no. 2 is true; No. 2 is false.
20. Valid until annulled unless there has been a ratification:
a. Rescissible contract.
b. Inexistent contract.
c. Voidable contract.
d. None of the above.
21. Contracts that cannot be sued upon unless ratified:
a. Voidable
b. Unenforceable
c. Rescissible
d. None of the above
22. Which of the following contract is voidable?
a. Those whose object is outside the commerce of men.
b. Those whose are absolutely fictitious.
c. Those where one of the parties is incapacitated.
d. Those which contemplate an impossible service.
23. The duty not to recover what has voluntarily been paid, although payment was no longer
required:
a. Natural obligation
b. Moral obligation
c. Civil obligation
d. None of the above
24. Which of the following contacts is voidable?
a. Those where both parties are incapable of giving consent to a contract.
b. Those undertaken in fraud of creditors when the latter cannot in any other manner
collect the claims due them.
c. Those where the consent is vitiated by mistake, violence, intimidation, undue
influence or fraud.
d. Those whose object is outside the commerce of men.
25. Which of the following contract is rescissible?
a. Those where one of the parties is incapable of giving consent to a contract.
b. Those where both parties are incapable of giving consent to a contract.
c. 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.
d. Those which are absolutely simulated or fictitious.
26. Rescission of contract can take place in this case:
a. When the things which are the object of the contract are legally in the possession of
third persons who acted in good faith.
b. When he who demands rescission can return whatever he may be obliged to restore.
c. When the party seeking resolution can perform only as to part and rescind as to
remainder.
d. When the seller cannot return the installments paid to him by the buyer.
27. L entered into a contract of lease with X. T, the clerk of L, typed the document. Due to T’s
negligence, the document made was that of sales instead of lease.
a. The remedy is annulment.
b. Parties may go to court for interpretation.
c. Parties may enforce their right because it is enforceable.
d. None of the above.
28. S owns an oil painting. Being in need of money, S sold the painting to B for P1,000. After
the sale, S discovered that the painting was valuable and worth P5,000.
a. S may rescind the contract on ground of lesion or inadequacy of cause.
b. S may annul the contract on ground of fraud.
c. S may annul the contract on ground of error.
d. B is entitled to the benefit of the contract because it is valid and binding.
29. G was appointed guardian of S, the latter being 16 years old. S sold his parcel of land in
writing to B valued at P100,000 for P75,000, suffering lesion by ¼ of the value. What is the
status of the contract?
a. Rescissible
b. Unenforceable
c. Enforceable
d. voidable
30. A appoints B to sell his land.
 Example No. 1: If the authority of B is oral and B sells the land in writing, the sale is valid.

Example No. 2: If the authority of B is in writing and B sells the land orally, the sale is valid.
Which of the following is correct?
a. First example is false but second example is true.
b. Both examples are true.
c. Both examples are false.
d. First example is true but second example is false.
31. Three of the following contracts are void. Which is the exception?
a. Sale of animal suffering from contagious disease.
b. Contract where the cause is immoral.
c. Relatively simulated contract.
d. Will pay you P10,000 “if I like”.
32. D forced C to lend him P10,000. The promissory note is in writing.
a. The contract is rescissible because the contract is fraudulent.
b. The contract is void.
c. C cannot demand payment from D because the contract is unenforceable.
d. Contract remains to be valid.
33. The stipulation in a contract to the effect that the debtor should remain as a servant in the
house and in the service of her creditor so long as she had not paid her debt is void
because it is:
a. Contrary to good custom.
b. Contrary to public policy.
c. Contrary to law and morality.
d. None of the above.
34. 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 values at least equal or more than
P50,000.
b. The contract is rescissible.
c. The contract is valid even though nothing remains of her inheritance to be turned
over to B.
d. Contract is void, future inheritance cannot be the object of sale.
35. 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 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 cause.
d. X is entitled to the bonus because the debtor company has voluntarily prevented the
happening of the condition.
36. Which of the following is not a requisite for the validity of a contract?
a. Consent.
b. Object.
c. Cause or consideration.
d. Delivery of the thing.
e. None of the above.
37. Before acceptance is conveyed, an offer becomes ineffective upon:
a. Death.
b. Civil interdiction.
c. Insanity.
d. Insolvency of either party.
e. All of the above.
38. Example 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 2: S sold to B orally his specific land. After B paid S the price of the sale, he
wanted to register the land 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. Only No.1 is true.
c. Only No.2 is true.
d. Both examples are true.
39. X alleged that Y promised to give X one hectare of land. This is in consideration of X’s
meritorious service to Y. Y pleads in defense that since the promise was not writing, it is
unenforceable under the Statue of Frauds. Decide.
a. The promise is unenforceable because it is not in writing.
b. The Statue of Frauds is applied because X has rendered services already.
c. The Statue of Frauds is inapplicable here, because the promise to give the land is
not a sale of real property.
d. The Statue of Frauds can apply to partially executed contract.
40. An incidental element of a contract:
a. Implied warranty in sale.
b. Payment of interest in a loan.
c. Delivery of the object in contract of pledge.
d. All of the above.
41. Statue of Frauds is applicable to:
a. Partially executed contract.
b. Oral contract of loan when the amount involved is less than P500.
c. Contract not to be performed within a year from making thereof.
d. All of the above.
42. By provision of law, which of the following contracts is not required to appear in a public
document?
a. Acts and contracts which have for their object the creation, transmission,
modification or extinguishment of real rights over immovable property.
b. The cession, repudiation or renunciation of hereditary rights.
c. The power to administer property.
d. Sale of immovable property.
e. None of the above.
43. Which of the following instruments is not subject to reformation?
a. Simple donations inter vivos wherein no condition is imposed.
b. Wills.
c. When the real agreement is void.
d. All of the above.
44. Which is the most defective contract?
a. Rescissible contract.
b. Voidable contract.
c. Unenforceable contract.
d. Void contract.
45. Which of the following may not be made the object of a contract?
a. All things which are not outside the commerce of men.
b. All rights which are transmissible.
c. All services which are not contrary to law.
d. Impossible things or services.
e. None of the above.
46. An obligation which cannot be enforced by court action, but which is binding on the party
who makes it in conscience and according to natural justice is called:
a. Civil obligation.
b. Natural obligation.
c. Pure obligation.
d. Simple obligation.
47. D is indebted to C in the sum of P10,000. For the purposes of avoiding the claims of C, D
donated all his properties worth the same amount to X.
a. The contract is absolutely simulated.
b. The contract is rescissible.
c. The contract is merely voidable.
d. The contract is void.
48. In three of the following, the transaction is void. Which is the exception?
 a. Oral contract of partnership the capital is P3,000 or more.
b. Contracts in writing contemplating impossible services.
c. Authority of the agent orally made in sale of immovable property.
d. Oral contract of partnership whenever immovable property is contributed.
49. This kind of defective contract refers to that contract which is validly agreed upon because
all the essential elements exist, but courts can nullify it when there is damage or prejudice
to one of the parties or to a third person. Its enforcement would cause injustice by reason
of some external facts.
a. Voidable contract.
b. Void or Inexistent Contract.
c. Rescissible Contract.
d. Unenforceable Contract.
50. S and B orally agreed that S would sell and B would buy S’s radio for P400, two years from
the date of the agreement. At the end of the two-year period, S refused to deliver the radio
although B was willing to pay.
a. B can compel S to deliver because B is willing to pay the price.
b. The contract falls under the Statue of Frauds, therefore unenforceable.
c. No Statue of Frauds because the price is less than P500.
d. The object is movable, oral contract is enforceable.
51. A sold his land to B. Although the sale was made orally, B still paid A the agreed price.
Later, B wanted to have the sale registered but he needed a public instrument. What can B
do?
a. B may compel A to execute the public instrument because the contract is valid.
b. B cannot compel A to return the price because the contract is not enforceable.
c. B may only sue A to return the price because no one may enrich himself at the
expense of another.
d. B may occupy and use A’s land as a buyer in good faith.
52. Contract which has no effect at all and cannot be ratified is a/an:
a. Unenforceable contract.
b. Void contract.
c. Voidable.
d. All of them.
53. If mistake, fraud, inequitable conduct, or accident has prevented a meeting of the minds of
the parties to contract, the proper remedy is:
a. Sue for specific performance of the contract.
b. Ratify the contract.
c. Annulment of the contract.
d. Reformation of the contract.
54. S, a minor, owns a specific property valued at P50,000. B, capacitated, by means of fraud
induced S to sell his property to him (B) for P100,000 which S did so. The contract is in
writing.
a. The contract is binding from the start.
b. The contract remains unenforceable because if falls under the Statue of Frauds.
c. The contract is rescissible because the ward suffered lesion by more than one-fourth
of the value.
d. The contract is void.
55. In order that a stipulation in favor of a third person in a contract would be valid and binding
upon parties thereto, three of the requisites are mentioned in the following enumeration.
Which among them is not requisite?
a. There must be a stipulation in favor of a third person.
b. The contracting parties must have clearly and deliberately conferred a favor upon
that third person.
c. The third person communicated his acceptance to the obligor before its revocation.
d. That there must be an existing agency between either of the contracting parties and
the third person.
56. D is indebted to C for P10,000. For the purpose of defrauding C, D sold his only parcel of
land to X valued at P10,000. X had no knowledge of the intention of D.
a. The contract between D and X is binding.
b. The contract is voidable because D is in bad faith.
c. The right of C is to rescind the contract because the transaction is fraudulent.
d. The contract between D and X is rescissible.
57. 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 be made to recover on ground of mistake.
b. D can be made to recover on the ground that his obligation is not legally
enforceable.
c. D can be made to recover because this will enrich C at the expense of D.
d. D cannot recover.
58. A obtained a loan from B for P1,500 with interest at 14% per annum, the payment of which
was secured by guarantor C. After maturity of the loan, D without the knowledge of A paid
B, P1,400 and thereupon B signed a receipt and gave it to D, of this tenor. “Received from
D P1,400 in full payment of A’s obligation in may favor”. (Sgd.) B.
a. D can recover from A P1,500 because the whole obligation of A to B has been
extinguished.
b. D can recover from A P1,500 because the balance of P100 is considered
extinguished by partial remission.
c. D can recover from A P1,400 because that was presumably the extent to which A
was benefited.
d. D cannot recover from A because he paid without the knowledge of A.
59. The duty not to recover what has voluntarily been paid although payment was no longer
required.
a. Natural obligation
b. Moral obligation
c. Civil obligation
d. None of the above.
60. Contract with a false cause is
a. Voidable.
b. Void.
c. Unenforceable.
d. All of the above.
61. Which of the following contracts is unenforceable unless ratified?
a. Those entered into in the name of another person by one who has been given no
authority or legal representation, or who has acted beyond his powers.
b. Contracts infringing the Statute of Frauds.
c. Those where both parties are incapable of giving consent to a contract.
d. All of the above
62. Which of the following contracts is required to be in writing to be enforceable?
a. An agreement that by its terms is not to be performed within a year from the
making thereof.
b. A special promise to answer for the debt, default or miscarriage of another.
c. An agreement made is consideration of marriage, other than a mutual promise to
marry.
d. Sales of goods, chattels or things in action at a price not less than P500.
e. All of the above.
63. Example no. 1: D obliged himself to give C P10,000. However, the day before the
obligation falls due, D’s apartment was completely gutted by accidental fire. There is no
question that the money was also razed by fire. The obligation of D is totally extinguished
because of fortuitous event.

Example no. 2: D obliged himself to pay C P10,000 with 6% interest. On the due date, D
tendered P10,000 with a promise to pay the P600 interest the day after. If C refused to
accept, he can be compelled to do so because the obligation is divisible.
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.
64. Example no. 1: D for P10,000 mortgaged his land to C. C, instead of a deed of mortgage,
executed a deed of sale and let D sign his name. D’s right to go to court and ask for
annulment.

Example no. 2: D obliged himself to give object no. 1 or object no. 2 to C. In here, both
objects are due.
 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.
65. 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 constitutes a definite
offer?
a. An offer made through an agent.
b. Business advertisement of things for sale.
c. Advertisement for bidders.
d. All of the above.
66. On July 15, 2012, X entered into a contract with Y. On February 10, 2013, 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, 2013.
c. Within four years from he time A entered into the contract.
d. On February 10, 2013.
67. S was forced by X to sign a contract with B for the sale of a specific property for P10,000.
C, a creditor of S, is prejudiced by the contract. What can S do?
a. S may ask for annulment of the contract.
b. S may ask for rescission of the contract.
c. S may ask C to declare the contract avoided.
d. S may ask for reformation of the contract.
68. Example no. 1: The husband, by intimidation, was able to obtain the consent of his wife,
with regard to the sale of a piece of land belonging to the wife for P1 million. The contract
is voidable because there was intimidation.

Example No. 2: In the above example, the right of the wife is to go to court and file a
motion for annulment within four(4) years from the time intimidation ceased.
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.
69. A contract where both parties are incapable of giving consent is:
a. Rescissible.
b. Voidable.
c. Unenforceable.
d. Void.
e. None of the above.
70. Three of the following contracts are void. Which is the exception?
a. Those whose cause, object or purpose is contrary to law, morals, good customs,
public order or public policy.
b. Those which are absolutely simulated or fictitious.
c. Those which cause or object did not exist at the time of the transaction.
d. Those where both parties are incapable of giving consent to a contract.
71. Which of the following contracts is void?
a. Those which object is outside the commerce of men.
b. Those which contemplate an impossible service.
c. Those where the intention of the parties relative to the principal object of the
contract cannot be ascertained.
d. Those expressly prohibited or declared void by law.
e. All of the above.
72. S makes an offer to B on January 1, 2012. B makes known his acceptance through a letter
sent on January 2, and received by S on January 10. Meantime, on January 5, S becomes
insane.
a. The contract is voidable because one party is insane.
b. There is already a meeting of minds, the contract is perfected.
c. The contract is not binding because there is no meeting of minds.
d. None of the above.
73. In the preceding number, if S is perfectly sane but only an unemancipated minor at the time
the acceptance is communicated to him then,
 a. There is no meeting of minds between the parties, unless ratified by the guardian of
S.
b. The contract is not binding because one party is incapacitated.
c. The contract is binding between the parties.
d. None of the above.
74. D owes C P10,000. But the debt soon prescribed. Later X, against the consent of D, pays C
P10,000.
a. X can recover from D P10,000 because the latter was enriched at the expense of X.
b. X has no right.
c. X cannot recover from D what he pays C.
d. Both D and C are liable to X.
75. In a contract of sale executed by S and B, it appears S sold his motor vehicle to B and B
bought it for P10,000. It turned out however, S has three motor vehicles. Galant valued at
P80,000: Hi-Ace van valued at P70,000; 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. The parties can ask for annulment of the contract.
d. There is no contract.
76. Which is the least defective contract?
a. Rescissible contract.
b. Voidable contract.
c. Unenforceable contract.
d. Void contract.
77. Which of the following contract 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 executed in representation of an absentee, if the latter suffer a lesion of more
than ¼ of the value of the object of the contract.
c. Those where one of the parties is incapable of giving consent to a contract.
d. Those undertaken in fraud of creditors when the latter cannot in any other manner
collect the claims due them.
e. Those which refer to things under litigation if they have been entered into by the
defendant without the knowledge and approval of the litigants or of competent
judicial authority.
78. X Company bought out a competitor, Y, with a stipulation that Y should thereafter not
engage in any business in the Philippines without the consent of X Company.
a. The stipulation is not valid because the parties, as a rule, have no absolute freedom
to stipulate terms and conditions in a contract.
b. The stipulation is not valid because this is against public policy.
c. The stipulation is valid, only it will create a monopoly in trade.
d. The stipulation if ratified is valid.
79. Reluctantly and against her good sense and judgment, Rosemarie entered into a contract
for the delivery of 5 tables to Corazon for a price of P15,000. Contact is:
a. void
b. Voidable
c. Unenforceable
d. Valid
80. Which of the following contact is enforceable even if not reduced in writing?
a. Contract executed by one of the parties in a contract.
b. Representation as to the credit of a third person.
c. Lease of immovable for a period longer that one year
d. Agreement for the sale of immovable property.
81. Which of the following contract is not valid?
a. Mutual promise to marry entered into orally.
b. Sale of immovable property orally entered into.
c. One of the parties in a contract is incapable of giving consent.
d. None of the above.