FINAL EXAMINATION

OBLIGATIONS AND CONTRACTS

By: Judge Nelson G. Leyco

NAME: __________________________________

TEST I. FILL-IN THE BLANKS (write down the answer) / TRUE OR FALSE
(encircle) - 1 pt. each

1. Payment means not only the delivery of _____________________ but also the
performance, in any other manner, of an obligation.
2. It refers to the stage in contracts where the parties negotiate and/or bargain on
the terms, conditions or stipulations between them: __________________.
3. If the obligation has been _____________________ performed in good faith, the
obligor may recover as though there had been a strict and complete fulfillment,
less damages suffered by the obligee.
4. For quasi-delict to be a source of obligation, there must be no pre-existing
contractual relations between the injured party and the party causing such
injury. TRUE or FALSE.
5. Whoever pays on behalf of the debtor without the knowledge or against the will
of the latter, cannot compel the creditor to _____________________ him in his
rights, such as those arising from a mortgage, guaranty, or penalty.
6. Even if the debtor is in legal delay, he is not liable if the specific thing to be
delivered is lost through a fortuitous event prior to delivery. TRUE or FALSE.
7. Payment made by a third person who does not intend to be reimbursed by the
debtor is deemed to be a _____________________, which requires the debtor's
consent.
8. In an alternative obligation, the creditor cannot be compelled to receive part of
one and part of the other undertaking. TRUE or FALSE.
9. Payment made to the creditor by the debtor after the latter has been judicially
ordered to _____________________ the debt shall not be valid.
10. Payment made by one of the solidary debtors extinguishes the obligation. TRUE
or FALSE.
11. He who has _____________________ of the same kind in favor of one and the
same creditor, may declare at the time of making the payment, to which of them
the same must be applied.
12. A ___________________ contract is one which comes into existence as a
necessary step for the creation of another contract for a future transaction.
13. If the debt produces interest, payment of the _____________________ shall not
be deemed to have been made until the interests have been covered.
14. ____________________ contracts are those which the law gives a special name
and prescribes specific rules.
15. The debtor may cede or assign his property to his creditors in payment of his
debts. This cession, unless there is stipulation to the contrary, shall only release
the debtor from responsibility for the _____________________ of the thing
assigned.
16. Facio ut des means: I do that you may ____________________.
17. If the creditor to whom tender of payment has been made refuses without just
cause to accept it, the debtor shall be released from responsibility by the
_____________________ of the thing or sum due.
18. Contracts of adhesion, where one party imposes a ready-made form of contract
on the other, are prohibited. TRUE or FALSE.
19. In order that the consignation of the thing due may release the obligor, it must
first be _____________________ to the persons interested in the fulfillment of
the obligation.
20. This is a basic principle in contracts which provides that contracts, as a rule, are
perfected by mere consent. ______________________.
21. Once the consignation has been duly made, the debtor may ask the judge to
order the _____________________ of the obligation.
22. ______________________ contracts are those where in addition to consent,
there must be delivery of the object before there can be perfection, like in
deposit, pledge and commodatum.
23. If, the consignation having been made, the creditor should authorize the debtor
to withdraw the same, he shall lose every preference which he may have over
the thing. The co-debtors, guarantors and sureties shall be
_____________________.
24. The principle of party autonomy in contracts is not an absolute principle. TRUE or
FALSE.
25. An obligation which consists in the delivery of a _____________________ thing
shall be extinguished if it should be lost or destroyed without the fault of the
debtor, and before he has incurred in delay.
26. When the law states that parties may enter into stipulations provided the same is
not contrary to law, it refers to mandatory and directory provisions of law. TRUE
or FALSE.
27. The courts shall determine whether, under the circumstances, the
_____________________ of the object of the obligation is so important as to
extinguish the obligation.
28. By the principle of mutuality in contracts, the law relieves a party from the
effects of an unwise, foolish, or disastrous contract. TRUE or FALSE.
29. Condonation or remission is essentially gratuitous, and requires the
_____________________ by the obligor.
30. To prevent any one-sidedness that escalation clauses may cause, there must be
a corresponding ______________________ clause.
31. Express condonation shall, furthermore, comply with the forms of
_____________________.
32. There can indeed be a contract even if the parties did not sign any written
instrument. TRUE or FALSE.
33. Whenever the _____________________ document in which the debt appears is
found in the possession of the debtor, it shall be presumed that the creditor
delivered it voluntarily, unless the contrary is proved.
34. An action for specific performance is a remedy available to a seller in case the
buyer in a contract to sell refuses to continue with the purchase on account of
financial difficulty. TRUE or FALSE.
35. The renunciation of the principal debt shall extinguish the
_____________________ obligations; but the waiver of the latter shall leave the
former in force.
36. The basic principle of ____________________ states that contracts take effect
only between the parties, their assigns and heirs.
37. The obligation is extinguished from the time the characters of creditor and
debtor are _____________________ in the same person.
38. Where there is no malice in the interference with a contract, but the purpose of
the one who interfered was in furtherance of his business interest, there is
tortuous interference. TRUE or FALSE.
39. Confusion does not extinguish a _____________________ obligation except as
regards the share corresponding to the creditor or debtor in whom the two
characters concur.
40. There can be a situation where a creditor can sue for rescission of the contract
even if he is not a party thereto. TRUE or FALSE.
41. _____________________ shall take place when two persons, in their own right,
are creditors and debtors of each other.
42. In addition to the subject matter and the consideration, the area of agreement
must extend to all points that the parties deem material in order to have a
perfected contract. TRUE or FALSE.
43. Compensation may be total or partial. When the two debts are of the same
amount, there is a _____________________ compensation.
44. “We will deliberate on purchasing on your Toyota Altis with Plate No. ABN 1456
 for the price of P500,000 payable in five equal monthly installments every 15th
day of the month from January 2018 to May 2018.” – This is a definite offer, the
acceptance of which will result to a perfected contract. TRUE or FALSE.
45. Compensation takes place by _____________________, even though the debts
may be payable at different places, but there shall be an indemnity for expenses
of exchange or transportation to the place of payment.
46. What do you call a contract that grants a person the choice, for a distinct and
separate consideration, to purchase a determinate thing at a predetermined fixed
price? _____________________ contract.
47. If a person should have against him several debts which are susceptible of
compensation, the rules on the _____________________ of payments shall
apply to the order of the compensation.
48. A right of first refusal does not need separate consideration to be valid. TRUE or
FALSE
49. When all the requisites mentioned in Article 1279 are present, compensation
takes effect by _____________________, and extinguishes both debts to the
concurrent amount, even though the creditors and debtors are not aware of the
compensation.
50. For an error (as to the legal effect of an agreement) to vitiate consent, such
error must be mutual. TRUE or FALSE.

TEST II. MULTIPLE CHOICE – 2 pts. each:

1. Where contract is onerous, any doubtful provision on incidental matters shall be

settled in favor of:
a. the greatest reciprocity of interests
b. the greatest transmission of rights
c. the least transmission of rights
d. the least reciprocity of interests

2. A contract is considered voidable if:

a. it fails to comply with statute of frauds
b. one party is legally incapacitated
c. it is entered into without authority
d. all parties are legally incapacitated

3. A contract’s validity or compliance cannot be left to the uncontrolled will of one

of the parties. This refers to the principle of:
a. obligatory force
b. consensuality
c. mutuality
d. relativity

4. A period designated in the obligation is presumed established for the benefit of:
a) both the debtor and the creditor
b) benefit of the creditor only
c) benefit of the debtor only
d) none of the above.

5. Contracts take effect only between the parties, their assigns and heirs. This
refers to the principle of:
a. obligatory force
b. consensuality
c. mutuality
d. relativity

6. It is a stage in contracts referring to that point in time where there is a birth of a

contract as a binding tie.
a. Negotiation
 b. Perfection
c. Consummation
d. Preparation

7. Exceptions to the principle of relativity in contracts do not include:

a. Inducement to Violate Contract
b. Accion Directa
c. Contracts Creating Personal Rights
d. Stipulation Pour Autrui

8. Which is not a vice of consent?

a. Mistake
b. Fraud
c. Ratification
d. Intimidation

9. The juridical necessity to give, to do or not to do refers to:

a. social obligation
b. civil obligation
c. moral obligation
d. natural obligation

10. A condition whose fulfilment depends upon the sole will of one of the contracting
parties is known as:
a. potestative condition
b. condition precedent
c. mixed condition
d. specific condition

11. The following are the elements of an obligation, except:

a. Juridical Tie
b. Active subject
c. Passive subject
d. Consideration

12. The obligation where only one party is bound is called

a. unilateral
b. bilateral
c. real
d. personal

13. A period designated in the obligation is presumed established for the benefit of:
a) both the debtor and the creditor
b) benefit of the creditor only
c) benefit of the debtor only
d) none of the above.

14. Actual delivery happens when:

a. the book being sold is physically given to the buyer thereof
b. the seller actually executes a deed of absolute sale over a piece of land
c. the seller physically gives to the buyer the keys of the house being sold
d. the lessee of a car retains possession thereof after the sale

15. This is a type or class of condition which depends partly on the will of the parties
and the will of a third party:
a. Potestative condition
b. Causal condition
 c. Mixed condition
d. Indivisible condition

TEST III. ESSAY- 10 pts. each

1. X offers to construct the house of Y for a very reasonable price of

Php1,000,000.00 giving the latter 10 days within which to make up his mind. If
Y did not pay anything to X to be given the 10-day period, may X withdraw the
offer at any time? Explain.

2. B bought a parcel of land from S who informed him before the contract was
perfected that the land was involved in a litigation in which C is the claimant. In
case the land is recovered later on by C, can B claim vitiated consent because he
thought that C would lose in the litigation? Explain.