FAR EASTERN UNIVERSITY

Institute of Accounts, Business and Finance

Final Assessment
Law on Obligations and Contracts
2nd Sem | AY 2019 – 2020

Atty. John Joseph S. Tamares, REB

MULTIPLE CHOICE QUESTIONS

For items 1 to 15, state the status of the contract from among the following choices:

a. Valid and enforceable.

b. Rescissible.
c. Voidable.
d. Unenforceable.
e. Void.

1. An oral contract of lease of a lot by Cardo Dalisay (lessor) and Victor Magtanggol (lessee) for a
period of 2 years at a monthly rental of P20,000 with Victor Magtanggol being required to pay a
one-month deposit of P20,000. Cardo Dalisay has not delivered the lot, but, Victor Magtanggol has
given the one-month deposit.

2. An oral contract of lease of a delivery truck by Jade (lessor) and Jackie (lessee) for a period of 2
years at a monthly rental of P20,000 with Jackie being required to pay a two-month deposit of
P40,000. Jade has not delivered the truck. Neither has Jackie given the two-month deposit.

3. A written contract of sale entered into between Oscar Hidalgo (seller) and Lucas Cabrera (buyer).
The object of the sale is the right lung of Oscar Hidalgo. Lucas Cabrera has paid the price
amounting to P1,000,000.

4. A donation of a gold ring worth P4,000 made by Alejandro Terante to Renato Hipolito. The
donation of the gold ring by Alejandro Terante and its acceptance by Renato Hipolito were made
orally with Alejandro Terante simultaneously delivering the ring to Renato Hipolito.

5. A written contract of sale of a lot between Alakdan, seller, and Buwitre, buyer, for P100,000. The
lot is the only property of Alakdan who sold it to defraud Senor Gustavo, his creditor. Buwitre was
not aware of the fraudulent intent of Alakdan in selling the lot to him.

6. A written contract of sale of a lot between Lola Flora, seller, and Konsehala Gina, buyer, for
P100,000. The lot is the only property of Lola Flora who sold it to defraud General Borja, her
creditor. Konsehala Gina was aware of the fraudulent intent of Lola Flora in selling the lot to her.

7. An oral contract of sale of a laptop worth P50,000 between Onanay (seller), a minor, and Alyana
(buyer), an insane person. The laptop has been delivered and the price has been paid.

8. A written contract of sale of a laptop worth P50,000 between Aubrey (seller), a minor, and Makmak
(buyer), an insane person. The laptop has not been delivered and the price has not been paid.

9. An oral sale of a lot worth P100,000 between Malou (seller) and Wang (buyer). Malou has not
delivered the lot but, Wang has given a down payment of P10,000.

10. A deed of sale of a lot worth P100,000 between Pet (seller) and Malo (buyer). Pet has not delivered
the lot, and Malo has not given any payment. The sale is in writing but has not yet been
acknowledged by the parties before a notary public.
11. A written contract of sale of a specific car between Pilyo and Pilya. The car actually belonged to
Onanoy and was sold by Pilyo in the name of Onanoy without the latter’s authority. The car is still
in the possession of Onanoy although Pilya has remitted the price of P60,000 to Pilyo.

12. A certificate of bank deposit entered into between Bananong, depositor, and Bantayog, bank.
Bananong has really no deposit in the bank but the bank made it appear that Bananong had a
deposit to apply for a visa at a foreign embassy.

13. A written contract of sale entered into by Lino Bartolome, guardian, in behalf of his ward Ace
Corpuz, a minor, and Sissy, 30 years old. The sale had for its object a specific ring with a value of
P40,000 belonging to Ace Corpuz but was sold by Lino Bartolome for only P30,000. Sissy has paid
the price in full and obtained possession of the ring.

14. An oral contract of commodatum whereby Santino, 17 years old, lent his cellphone to Santina, 25
years old for a week.

15. A contract of sale made by Pandoy to Andoy of jewelry which Tindoy is trying to recover in a court
case he filed against Pandoy. Andoy was not aware that the jewelry was the subject of litigation
between Tindoy and Pandoy.

16. Statement I: Innominate contracts, not having any name under the law, are void because no law
or rule governs them.
Statement II: Facio ut des and Do ut facias are innominate contracts.

a. Both statements are correct.

b. Both statements are incorrect.
c. Statement I is correct while Statement II is incorrect.
d. Statement I is incorrect while Statement II is correct.

17. Rescission is different from annulment in that rescission:

a. Is a principal action.
b. May be availed of only by the parties whether bound principally or subsidiarily.
c. Is based on lesion or damage.
d. Is brought to declare the inefficacy inherent in the contract.

18. At the height of the flood, Bentong saw Kentong and his family bringing their personal effects to a
higher ground. He offered his help which was accepted. Thereafter, Kentong gave P1,000 to
Bentong who was not expecting the payment. The contract between Bentong and Kentong is:
a. Onerous.
b. Remuneratory.
c. Gratuitous.
d. There was no contract at all.

19. Refer to item (18) – the cause is:

a. The payment of P1,000.
b. The benefit received by Kentong.
c. The personal effects of Bentong and his family.
d. There is no cause because there is no contract between Bentong and Kentong.

20. A provision in a promissory note authorizing the creditor to increase, decrease or otherwise change
from time to time the rate of interest and/or bank charges without advance notice to the borrower
is violative of which principle of contract?
a. Relativity.
b. Mutuality.
c. Obligatory force.
d. Consensuality.

21. It refers to a contract wherein one party imposes a ready-made form of contract, which the other
may accept or reject, but which the latter cannot modify.
a. Auto-contract.

Page 2 of 13
 b. Aleatory contract.
c. Contract of adhesion.
d. Innominate contract.

22. The following contracts are voidable, EXCEPT a contract:

a. Where consent was given by a party while in a state of drunkenness.
b. Where consent was given by a party while under hypnotic spell.
c. Between a minor and an insane.
d. Where a party was mistaken as to the substance of the thing object of the contract.

23. A meeting of minds between two persons whereby one binds himself with respect to the other to
give something or to render some service is known as:
a. Obligation.
b. Consent.
c. Contract.
d. Stipulation.

24. Sansan borrowed P500,000 from Tantan. Sansan died without having paid his loan obligation to
Tantan. He left, Kenken, his son and heir, properties worth P400,000.
a. Kenken is liable to Tantan for P500,000.
b. Kenken is liable to Tantan for P400,000.
c. Kenken is liable to Tantan for P100,000.
d. Kenken is not liable at all because he should not be made to shoulder the obligation of his
father.

25. It is the manifestation of the meeting of the offer and the acceptance upon the thing and the cause
which are to constitute the contract.
a. Consideration.
b. Contract.
c. Consent.
d. Cause.

26. On May 1, 2018, Monako offered to sell a specific car to Monamo for P500,000. Monamo sent his
letter of acceptance to Monako on May 8, 2018. On May 10, 2018, however, Monako died in a
vehicular accident and his secretary received the letter of acceptance on May 12, 2018 unaware that
Monako had already died.
a. The contract was perfected on May 8, 2018 when Monamo sent his letter of acceptance.
b. The contract was perfected on May 12, 2018 when the secretary of Monako received the letter
of acceptance.
c. The contract was not perfected because the offer of Monako became ineffective when he died.
d. The contract was perfected on May 1, 2018 because the acceptance made by Monamo on May
8, 2018 retroacts to the date of the offer.

27. On July 1, 2018, Serrano offered to sell his only Mercedes Benz car for P1,000,000 to Benitez who
was interested in buying the same. In his letter to Benitez, Serrano stated that he was giving Benitez
up to July 31, 2018 to make up his mind whether to buy the car or not. On July 25, 2018, Serrano
personally went to Benitez to inform him that he was no longer willing to sell the car unless the
price was increased to P1,500,000 because another buyer was interested in buying the car for the
said amount of P1,500,000.
a. Benitez may compel Serrano to sell to him the car for P1,000,000.
b. Serrano may validly withdraw his offer to Benitez because the option was not founded upon
a consideration.
c. Serrano may not withdraw his offer until after the lapse of the option period that he gave to
Benitez.
d. The increase in price made by Serrano was not valid because it was made within the option
period.

28. One of the following contracts is not vitiated by intimidation or violence, and hence valid.
a. A contract of sale which was signed by a party because his arm was being twisted by a third
person.

Page 3 of 13
 b. A contract of sale which was entered into because the other party was pointing a gun at his
wife.
c. A contract where a party was compelled to assign his property to the other to pay a just debt
because the latter threatened to sue him in court if he does not pay his debt.
d. A contract of donation of a parcel of land which a party signed because the other party
threatened to burn his house.

29. One of the following is not a requisite of cause in a contract. Which is it?
a. It must exist.
b. It must be lawful.
c. It must not be false.
d. It must be clearly stated in the contract.

30. The defective contracts arranged according to the degree of their defectiveness from the least
defective to the most defective are:
a. Voidable, rescissible, unenforceable, and void contracts.
b. Rescissible, unenforceable, voidable, and void contracts.
c. Rescissble, voidable, unenforceable, and void contracts.
d. Unenforceable, rescissible, voidable, and void contracts.

31. Mak, the guardian of Pak, a minor, sold the fish harvested from the fishpond of Pak for P7,400. The
fish, however, had a value of P10,000.
a. The sale is rescissible because Pak suffered lesion by more than one-fourth of the value of the
fish sold.
b. The sale is voidable because Pak is a minor.
c. The sale is unenforceable because Mak sold the fish without approval of the courts.
d. The sale is void because the object is outside the commerce of men.

32. Dimagiba owes the following creditors: King – P50,000; King-King – P60,000; and Aringkingking
– P90,000. He has assets valued at P400,000. Subsequently, Dimagiba donated, among his assets, a
parcel of land valued at P250,000 to Demetrio. The donation and acceptance were made in a public
instrument. The donation of the land made by Dimagiba to Demetrio is:
a. Rescissible, because it was presumed to have been made in fraud of creditors.
b. Unenforceable, because Dimagiba was not authorized by his creditors.
c. Void, because the donation and acceptance should be registered.
d. Voidable, because Dimagiba does not have the free disposal of his property.

33. The following contracts are voidable, EXCEPT:

a. Contracts entered into during a state of drunkenness or hypnotic spell.
b. Contracts entered into during a lucid interval.
c. Contracts where one of the contracting parties is incapable of giving consent.
d. Contracts where the consent of one party is vitiated by violence, intimidation, mistake ,fraud
or undue influence.

34. The action for annulment must be brought within four years. Which of the following is false with
respect to the reckoning of the beginning of the prescriptive period?
a. In cases of intimidation, violence and undue influence, the period begins from the time the
defect in the consent ceases.
b. In case of fraud, the period begins to run from the discovery thereof.
c. In case of mistake, the period begins to run from the time it was committed.
d. In cases of contracts entered into by minors or other incapacitated persons, the period runs
from the time guardianship ceases.

35. One of the following may not annul a voidable contract.

a. The party whose consent is vitiated by violence, intimidation, mistake, fraud or undue
influence.
b. The incapacitated person when he attains capacity.
c. The guardian, during the ward’s incapacity.
d. The party who is capable of entering into a contract.

36. The following contracts are unenforceable, EXCEPT:

Page 4 of 13
 a. Those entered into by one who has no authority or legal representation.
b. Those who do not comply with the Statute of Frauds.
c. Those where both parties are incapable of giving consent to a contract.
d. Those where the consent of a party is vitiated by violence, intimidation, mistake, fraud or
undue influence.

37. The Statute of Frauds applies only to:

a. Wholly executed contracts.
b. Contracts wholly or partially executed on the part of the debtor.
c. Contracts wholly or partially executed on the part of the creditor.
d. Wholly executory contracts.

38. On June 1, 2018, Mother Ferry, a movie producer, met Onanay Dalisay, a movie actress at the lobby
of the Diamond Sky Hotel. Mother Ferry informed Onanay Dalisay that she was producing a movie
the filming of which would start on August 1, 2019 and that she was offering Onanay Dalisay the
starring role for a fee of P10,000,000. Onanay Dalisay accepted the offer and shook hands with
Mother Ferry to seal their agreement. However, Mother Ferry gave Onanay Dalisay P1,000,000 as
initial payment. On August 1, 2019, Mother Ferry called Onanay Dalisay for the shooting of the
movie but Onanay Dalisay refused to honor the agreement saying that it was not enforceable, not
being in writing.
a. Mother Ferry cannot enforce the contract against Onanay Dalisay because it was entered into
orally.
b. Mother Ferry can enforce the contract against Onanay Dalisay because Onanay Dalisay had
accepted benefits under the contract.
c. Onanay Dalisay may just return the payment since the contract is unenforceable.
d. Onanay Dalisay is not bound under her agreement with Mother Ferry because she did not sign
any writing.

39. Ana was driving on her way to Manila from the province when she suffered a busted tire. Not
having a spare tire, she went to a nearby car spare parts store to buy a new tire. However, she did
not have sufficient money with her so she phoned Banana, her friend, who happened to know
Gorilla, the store owner. Banana then instructed Ana to give to Gorilla the telephone through which
Banana told Gorilla “Don’t worry. If Ana cannot pay, just charge me.” Ana was thus able to buy a
new tire for P10,000 for which Gorilla issued Ana a sales invoice.
a. If Ana cannot pay, Gorilla can proceed against Banana to make good her promise to pay Ana’s
debt.
b. Banana’s promise cannot be enforced against her because she did not execute any writing for
the guaranty she made.
c. Gorilla can enforce Banana’s promise to answer for Ana’s debt since the guaranty was
witnessed by Ana.
d. Gorilla can enforce Banana’s promise because there was a writing of some kind, the invoice for
the sale of the tire.

40. The following contracts are void or inexistent, EXCEPT:

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 whose cause or object did not exist at the time of the transaction.
d. Those where one of the parties employed fraud to obtain the consent of the other.

41. The following are characteristics of void or inexistent contracts, EXCEPT:

a. The right to set-up the defense of illegality cannot be waived.
b. The action or defense for the declaration of the inexistence of a contract does not prescribe.
c. A void contract can be ratified by the acceptance of benefits under it by one or both of the
parties.
d. The defense of illegality of contracts is not available to third persons whose interests are not
directly affected.

42. Reformation of an instrument is available in the following cases, EXCEPT:

a. When a mutual mistake of the parties causes the failure of the instrument to disclose their
agreement.

Page 5 of 13
 b. When one party was mistaken and the other party acted fraudulently or inequitably in such a
way that the instrument does not show their true intention.
c. When a party was mistaken and the other knew or believed that the instrument did not state
their real agreement.
d. When one of the parties has brought an action to enforce the contract.

43. With the intention of raising money to buy a gun which he would use in killing Bart, his mortal
enemy, Art sold his only car for P200,000 cash to Cart who knew nothing of the intention of Art in
selling the car. After the sale, Art was able to buy a gun complete with all the papers required by
law. Cart, on the other hand, was able to register the car in his name at the Land Transportation
Office.
a. The sale of the car by Art to Cart is valid provided Art does not kill Bart.
b. The sale of the car by Art to Cart is void if Art kills Bart.
c. The sale of the car by Art to Cart is valid whether Art kills Bart or not.
d. The sale of the car by Art to Cart is void whether Art kills Bart or not.

44. The cause of a contract differs from the motive of each party to the contract in that motive:
a. Is an essential element of a contract.
b. Although illegal, does not affect the validity if the contract.
c. Is always known by the other party.
d. When illegal will render the contract void.

45. Andong bought a baby boy from Sandeng. Andong knew that the baby boy was his illegitimate
son by a woman named, Saleng, and which Saleng sold to Sandeng. The contract between Andong
and Sandeng is:
a. Valid.
b. Void.
c. Unenforceable.
d. Voidable.

46. D, out of his love and affection for C, donated a parcel of land to the latter who accepted it. The
formalities required by law were complied with. The contract between D and C is:
a. An onerous contract.
b. A gratuitous contract.
c. A remuneratory contract.
d. An accessory contract.

47. The cause of the contract in item (46) is:

a. The parcel of land.
b. The acceptance of the donation by C.
c. The generosity of D.
d. The contract has no cause because C did not give any consideration to D.

48. Which of the following contracts is valid, enforceable and would not require any further act for the
convenience of the parties other than its registration with the proper government office?
a. Oral sale of a piece of land made through an agent whose authority is in a public instrument.
b. Sale of a piece of land in a public instrument made through an agent whose authority was
given orally by the principal.
c. Sale of a piece of land in a private instrument made through an agent whose authority is in a
public instrument.
d. Sale of a piece of land in a public instrument made through an agent whose authority is in a
public instrument.

49. Santa sold her horse to Banta for P50,000. The parties agreed that Santa shall deliver the horse one
week from the execution of their agreement. Banta, however, is required to pay the price
immediately in certified check. In the place of Santa and Banta, it was the custom that anyone
selling a horse should place a horseshoe on its hooves. However, this was not stated in the
agreement including how the horse would be cared for before delivery.
a. Santa is not obliged to place a horseshoe on the horse although it was the custom in the place
because Santa and Banta did not stipulate about it.

Page 6 of 13
 b. Santa is obliged to place a horseshoe on the horse because the observance of custom or usage
in the place becomes part of the contract.
c. Santa is not obliged to take care of the horse before delivery because the caring of the horse
was not stipulated.
d. Santa and Banta are bound only by the terms stated in their agreement.

50. In January 2008, S, 17 years old, sold his only car to B, 21 years old. The sale was without the
knowledge of G, the guardian of S. Assuming that an annulment case is filed today:
a. S may bring the action for annulment.
b. G may bring the action for annulment.
c. B may bring the action for annulment.
d. Annulment will not prosper whoever will file it.

51. Which among the following contracts is void?

a. A contract of barter between S, insane, and B, 17 years old.
b. A contract of sale where B, the buyer, twisted the arm of S, the seller, so that S would sign the
deed of sale.
c. A contract of sale where B, the buyer, aimed a gun at the wife of S, so that S would sign the
deed of sale.
d. A contract for the sale of a cow which is suffering from a contagious disease.

52. An insurance policy which, in practice, is prepared by an insurance company and all the insured
has to do is to sign thereon if he agrees with its terms, is an example of:
a. An auto-contract.
b. A contract of adhesion.
c. A commutative contract.
d. A gratuitous contract.

53. W, a woman, agreed to live with M, a man, as M’s wife without the benefit of marriage in exchange
for M’s promise to give a monthly support of P15,000. Both parties are single. After 3 years, M
found another woman and stopped giving support to W.
a. W can demand the continuation of the monthly support from M pursuant to their agreement.
b. M can demand the return of the support that he had given to W for the past 3 years.
c. Both M and W will be criminally prosecuted.
d. The agreement between M and W is illegal but the illegality does not constitute a crime.

54. Torrente, a supplier of laptops, sent to several customers in various parts of the country a letter
offering to sell out “all his stock of 10 units of laptops” at the discounted price of P40,000 each. The
offer stated that the reply must be received by registered mail not later than September 18, 2018.
On September 14, 2018, Belleza sent a registered letter accepting the offer. On September 16, 2018,
Corpuz sent a telegram accepting the offer. The telegram was received by Torrente on the same
day. Whose acceptance is binding on Torrente?
a. The acceptance by Belleza because it was mailed first.
b. The acceptance by Corpuz because it was received first by Torrente.
c. Neither acceptance is binding on Torrente.
d. Both the acceptance will be binding on Torrente, with Belleza getting 5 laptops, and Corpuz
getting the other 5.

55. Neither an essential nor accidental element of a contract:

a. Cause or consideration.
b. Consent.
c. Warranty against eviction.
d. Penal cause in a contract.

56. In three of the following defective contracts, ratification cleanses the defects. Which is not
susceptible of ratification?
a. Both parties are incapable of giving consent.
b. Sale of land thru an agent where the authority is orally given.
c. Sale of immovable or any interest therein orally entered into.
d. Contracts entered into by a person who has been given no authority.

Page 7 of 13
57. The following, except one, are void or inexistent contracts.
a. Those which are absolutely simulated or fictitious.
b. Those which are outside the commerce of man.
c. Those whose cause or object did not exist at the time of transaction.
d. Those which contemplate a possible service.

58. “Mutual promise to marry” between would-be husband and wife, orally entered into is:
a. A validable contract.
b. A void contract.
c. Unenforceable contract.
d. None of the above.

59. Statement I: 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 P2M. The contract is voidable because there
was intimidation.
Statement II: In statement (I), the right of the wife is to go to court and file a motion for annulment
within four (4) years from the time the intimidation ceased.

a. Both statements are true.

b. Both statements are false.
c. Statement I is true while Statement II is false.
d. Statement I is false while Statement II is true.

60. By this principle, contracts take effect only upon the contracting parties, their assigns or
successors-in-interest:
a. Mutuality of contract.
b. Freedom of contract.
c. Relativity of contract.
d. Obligatoriness of contract.

61. Three of the following are essential elements of the contract, EXCEPT:
a. Cause of the obligation which is established.
b. Consent of the contracting parties.
c. Motive of the parties.
d. Object certain, which is the subject matter of the contract.

62. This contract is without effect unless ratified:

a. Marriage between first degree cousins.
b. Contract of sale between two insane persons.
c. Contract of sale between husband and wife.
d. Donation between husband and wife.

63. A defective contract where damage or lesion is essential:

a. Rescissible.
b. Voidable.
c. Unenforceable.
d. Void.

64. Statement I: A contract as a general rule must be written to have force and effect as a valid
agreement.
Statement II: A formal or solemn contract is one that must be in writing to be valid.

a. Both statements are true.

b. Both statements are false.
c. Statement I is true while Statement II is false.
d. Statement I is false while Statement II is true.

65. The following cannot give consent to a contract, EXCEPT:

a. Minors, except sale of necessaries in life.
b. Insane persons.
c. Demented persons.

Page 8 of 13
 d. Minors who represent themselves as of legal age to one in good faith.

66. The following are still valid contracts, EXCEPT:

a. Void.
b. Unenforceable.
c. Voidable.
d. Rescissible.

67. Amanda, with a violence in her eyes, intimidated her husband Amando to sell his property to her.
a. Rescissible.
b. Voidable.
c. Unenforceable.
d. Void.

68. Anton has been for more than 20 years the legal counsel of Bentong. Anton talked to Bentong
almost everyday in the course of giving counsel to Bentong to convince Bentong to donate his lot
to him. Anton told Bentong that it was only he who knew all of Bentong’s cases and was the only
one who could handle them and Bentong’s other legal concerns. Because of the persistence of
Anton in talking him into donating his lot, Bentong finally signed the deed of donation of the lot
in Anton’s favor with all the formalities required by law.
a. The deed of donation is valid because all the formalities were complied with.
b. The deed of donation is voidable on the ground of undue influence.
c. The deed of donation is voidable on the ground of intimidation.
d. The deed of donation is valid because it was the only way by which Bentong could keep Anton
as his lawyer.

69. Dodo gave his USD100.00 bill to Coco to have it converted into pesos at the agreed rate of
Php55.00 to USD1.00. When Dodo received his money in pesos, he discovered that Coco gave him
P5,700.00 instead of P5,500.00. No written agreement was executed by the parties. The only written
evidence of the transaction was the tape dispensed by the adding machine showing the
computation to be P5,500.00 and which was in the possession of Dodo.
a. The contract is voidable. Coco can have it annulled on the ground of mistake.
b. The contract is valid. Dodo must return the excess of P200.00 to Coco.
c. The contract is unenforceable since it was not in writing.
d. Coco can demand that a writing be executed to show the true intention of the parties.

70. P, the owner of a business, appointed A as his agent to manage it. P authorized A to borrow
money for the business. A himself is the one who lends the money at the current rate of interest.
Thus, in the said contract of loan, A enters into the contract in his own behalf as lender and
represents P as borrower. The contract of loan in such a case is considered as:
a. An auto-contract.
b. An aleatory contract.
c. A remuneratory contract.
d. A gratuitous contract.

71. The following are characteristics of certain contracts:

I. Nominate
II. Real
III. Aleatory
IV. Commutative

A contract for the sale of a Lotto/PCSO Sweepstakes ticket is considered as:

a. I and II.
b. I and IV.
c. I and III.
d. III and IV.

72. Statement I: The illegality of the motive of a party to a contract renders the contract void.
Statement II: The motive of one party to a contract is always known by the other party.

a. Both statements are true.

Page 9 of 13
 b. Both statements are false.
c. Statement I is true while Statement II is false.
d. Statement I is false while Statement II is true.

73. On March 25, 2018, Jalibee and MakDo entered into a written contract of lease whereby Jalibee as
lessor leased the third floor of his building to MakDo, lessee. The contract provides, among other
terms and conditions, the following: (a) the lessee shall give a rental deposit of two months
amounting to P40,000; and pay an advance rental of one (1) month amounting to P20,000 upon the
execution of the contract; (b) The lessor shall keep the leased premises in tenantable condition
throughout the period of the lease which is from April 1, 2018 to March 31, 2020; (c) at the end of
the lease period, the lessor shall return the rental deposit to the lessee less any amount of damage
that may be caused on the leased premises by the lessee.

MakDo pursuant to the contract, both gave the rental deposit and advance rental to Jalibee upon
the execution of the contract.

The contract between Jalibee and MakDo is:

a. Bilateral, nominate, onerous and commutative.
b. Bilateral, innominate, onerous, and aleatory.
c. Unilateral, nominate, gratuitous, and commutative.
d. Unilateral, innominate, onerous, and commutative.

74. Assume the same facts in item (73) except that the contract was entered into orally between Jalibee
and MakDo. In such a case, the contract between the parties is:
a. Unenforceable.
b. Voidable.
c. Rescissible.
d. Valid and enforceable.

75. Which of the following contracts is not a void contract?

a. A contract of sale of an animal suffering from a contagious disease.
b. A purchase of an illegitimate child by one who is the father of the child.
c. A contract of insurance whereby by the insured asked another to take his place during the
medical examination.
d. A contract between Atong, a Filipino and Bakong, an alien, for the purchase of the right kidney
of Atong for P1,000,000.

76. Statement I: Human hair may validly be the object of a contract of sale.
Statement II: The donation by a mother of a part of her liver to be transplanted to his son is valid.

a. Both statements are correct.

b. Both statements are incorrect.
c. Statement I is correct while Statement II is incorrect.
d. Statement I is incorrect while Statement II is correct.

77. Batobato, a store owner, sold a gallon of rat poison to Baribari for P15,000. Baribari intended to
pour the poison in the fishpond of Beriberi, his enemy, to kill all the fish therein. The sale of the rat
poison is:
a. Valid provided Baribari does not pursue his motive to kill the fish in the fishpond of Beriberi.
b. Valid even if Baribari pursues his motive to kill the fish in the fishpond of Beriberi.
c. Void as it is immaterial whether or not Baribari kills the fish in the fishpond of Beriberi since
Baribari’s motive is void.
d. Void if Baribari pursues his motive to kill the fish in the fishpond of Beriberi.

78. Under the Statute of Frauds, certain contracts must be in writing to be enforceable. One of the
following contracts is enforceable although not in writing. Which is it?
a. Sale of movables at a price of not less than P500.
b. A representation as to the credit of a third person.
c. An agreement made in consideration of marriage other than mutual promise to marry.
d. An agreement for the leasing for a longer period than one year of a personal property.

Page 10 of 13
79. A contract whose cause is the promise of a thing or service by the other party is:
a. An onerous contract.
b. A gratuitous contract.
c. A lucrative contract.
d. A remuneratory contract.

80. One of the following statements does not pertain to a relatively simulated contract.
a. The parties conceal their real agreement.
b. The parties are bound by their real agreement provided it does not prejudice third persons.
c. The parties are bound by their real agreement provided it is not contrary to law, morals, third
persons, public order or public policy.
d. The parties do not intend to be bound at all.

81. One of the following is not a requisite of the object of a contract.

a. It must be within the commerce of men.
b. If it is a right, it must be intransmissible.
c. It must not be contrary to law, morals, good customs, public order or public policy.
d. It must be determinate as to its kind or capable of being made determinate without the need
of the parties entering into a new agreement.

82. An absolutely simulated contract is:

a. Void.
b. Voidable.
c. Valid.
d. Unenforceable.

83. A consensual contract has the following essential elements:

a. Consent of the contracting parties, object certain and cause or consideration.
b. Consent of the contracting parties, object certain, cause or consideration and delivery of the
object.
c. Consent of the contracting parties, object certain, cause or consideration and formalities
required by law.
d. Consent of the contracting parties, object certain, delivery of the object, and formalities
required by law.

84. A contract that can stand by itself is known as:

a. Accessory contract.
b. Principal contract.
c. Commutative contract.
d. Gratuitous contract.

85. A solemn or formal contract has the following essential elements:

a. Consent of the contracting parties, object certain and cause or consideration.
b. Consent of the contracting parties, object certain, cause or consideration and delivery of the
object.
c. Consent of the contracting parties, object certain, cause or consideration and formalities
required by law.
d. Consent of the contracting parties, object certain, delivery of the object, and formalities
required by law.

86. A real contract has the following essential elements:

a. Consent of the contracting parties, object certain and cause or consideration.
b. Consent of the contracting parties, object certain, cause or consideration and delivery of the
object.
c. Consent of the contracting parties, object certain, cause or consideration and formalities
required by law.
d. Consent of the contracting parties, object certain, delivery of the object, and formalities
required by law.

87. A contract may be enforced by or against a third person, EXCEPT:

a. In the case of stipulation pour atrui.

Page 11 of 13
 b. When a third person induces another to violate hos contract.
c. In case of contracts intended to defraud creditors.
d. When the benefit to the third person is merely incidental.

88. Three of the following instances will render an offer ineffective before acceptance is conveyed.
Which one will not?
a. Civil interdiction of either party.
b. Insolvency of either party.
c. Insanity of either party.
d. Intoxication of either party.

89. One of the following is not incapable of giving consent.

a. Demented persons.
b. Unemancipated minors.
c. Deaf-mutes who do not know how to write.
d. Deaf-mutes who do not know how to read.

90. Severino, orally sold a one-square meter lot for P375.00 to Benedicto, chairman of Barangay
Mabuhay, who was officially authorized in a barangay resolution to look for and buy a lot where
the barangay would construct a barangay marker. Since Benedicto did not have sufficient cash at
that time, he told Severino that he would give the amount the following day. The next day,
Benedicto went to the place of Severino to pay the price of the lot but Severino refused to accept it,
saying that the sale is unenforceable not being in writing.
a. The sale of the lot is enforceable although not in writing because the price is less than P500.
b. The sale is enforceable because Benedicto was duly authorized to buy the lot through a
resolution which is in writing.
c. The sale of the lot is void not being in a public instrument.
d. The sale is unenforceable since the sale of real property must be in writing regardless of the
price to be enforceable.

91. Sayong, an employee of CLTA & Co, sold his car for P100,000 to Boyong, whom he knew was only
17 years old. Sayong delivered the car to Boyong who immediately paid the amount of P100,000.
Later, Sayong was transferred to another branch of his employer which was quite a distance from
his residence. He wanted to get back the car from Boyong so that he will have something to use in
going to and from his new office. Neither Boyong nor his guardian has registered the sale with the
Land Transportation Office.
a. Sayong can file an action to annul the sale he made to Boyong because he was mistaken in
selling the car which he realized he badly needed.
b. Sayong can ask the court to annul the sale because Boyong was a minor when the contract of
sale was entered into and it has not yet been recorded with the Land Transportation Office.
c. Only Boyong, when he attains the age of majority, or his guardian, while Boyong is still a
minor, can bring an action to annul the contract.
d. The minority of Boyong has no effect on the validity of the contract since the parties entered
into the contract of sale freely.

92. A month ago, Sissie, 17 ½ years old, orally sold her bicycle for P3,000 to Ace, her neighbor, who
was only 16 years old. Lola Flora, the mother of Sissie, learned about the sale by Sissie of her bicycle,
and demanded that Sissie give her the amount she received. Sissie, thus gave the proceeds of the
sale to her mother who spent the same for the family’s daily expenses. General Borja, the father of
Ace, also learned about the purchase by Ace of the bicycle when he saw it parked at their door and
began using it almost daily since Ace bought it, Based on the foregoing facts, what is now the status
of the sale entered into between Sissie and Ace?
a. Unenforceable because both parties were incapacitated to enter into the contract.
b. Unenforceable because the sale was not in writing.
c. Validated from inception because of the subsequent acts of the parent of the parties.
d. Voidable because while Ace was only 16 years old, Sissie was nearing the age of majority which
is 18 years.

93. If the illegal contract between the parties is a criminal offense and both parties are guilty (in pari
delicto), such illegal contract shall produce the following effects, EXCEPT:
a. The parties shall have no right of action against each other.

Page 12 of 13
 b. Both parties shall be criminally prosecuted.
c. The effects and instruments of the crime will be confiscated in favor of the government.
d. The parties may recover what they have given if it is not illegal itself.

94. If the contract is illegal but it does not constitute a criminal offense and only one party is guilty,
such illegal contract shall produce the following effects, EXCEPT:
a. The guilty party cannot recover what he has given.
b. The guilty party cannot ask for the fulfillment of what has been promised him.
c. The innocent party cannot be compelled to comply with his promise.
d. The innocent party cannot demand the return of what he has given.

95. Reformation of instruments has the following requisites, EXCEPT:

a. There must be a meeting minds of the parties to the contract.
b. The true intention of the parties is not expressed in the instrument.
c. The failure of the instrument to express the true intention of the parties is due to mistake, fraud,
inequitable conduct or accident.
d. The contract must be in a public instrument.

96. Six years ago, Choco, 17 years old, sold his one-hectare agricultural lot to Gatas for P200,000. Choco
invested the proceeds of the sale in a business which was successful at the start but had gone
through difficult times as a result of the economic crisis. He thought of the agricultural lot that he
sold to Gatas which has been enjoying bumper crops since Gatas bought it from him. Choco now
approaches you to seek your help on whether it would still be possible to annul the sale of the
agricultural lot to Gatas? What advice will you give to Choco?
a. Ony Choco may annul the sale on the ground of his incapacity.
b. Only Gatas may annul the sale on the ground of Choco’s incapacity.
c. Neither Choco nor Gatas may annul the sale on the ground of Choco’s incapacity.
d. Both Choco and Gatas may annul the sale on the ground of Choco’s incapacity.

97. Nonong convinced Ontong to buy a gold-plated bar which Nonong told Ontong was made of pure
gold. Ontong bought the thing believing that it was really made of pure gold. The contract between
Nonong and Ontong is:
a. Valid.
b. Voidable.
c. Rescissible.
d. Void.

98. Malou and Wang entered into a contract whereby Malou sold her car to Wang for P250,000. Based
on the foregoing, which of the following statements is incorrect?
a. The contract is voidable if Malou is 17 years old, while Wang is 25 years old.
b. The contract is unenforceable if Malou is 17 years old and Wang is insane.
c. The contract is void if Wang, 25 years old, compelled Malou, 30 years old, to sign the deed of
sale by threatening to burn the house of Malou.
d. The contract is rescissible if at the time of the sale, the car was the subject of litigation brought
by Nah against Malou to recover the car, and the court and Nah did not give their authority to
the sale.

99. Which of the following must be in writing to be enforceable as required by the Statute of Frauds?
a. A subscription for 5 shares of stock of a corporation at P100 pe share.
b. A contract for the construction of a building scheduled to begin 4 months after the execution
of the contract.
c. A contract for the lease of an agricultural lot for a period of 8 months.
d. A contract whereby one agrees to pay another’s debt of the latter defaults in his payment.

100. It is a contract by virtue of the terms of which the parties thereto promise and obligate themselves
to enter into another contract at a future time, upon the happening of certain events, or the
fulfillment of certain conditions.
a. Contract of adhesion.
b. Contract of option.
c. Contract of sale.
d. Auto-contract.

Page 13 of 13