Final Exam

Multiple Choice

1. This kind of defective contract refers to that contract which is validly agreed upon because all the essential
elements exists, but Courts can nullify it when there is damage or prejudice to one of the parties to a third person.
Its enforcement would cause injustice by reason of some external facts.
A. Voidable Contract C. Rescissible Contract
B. Void or inexistent Contract D. Unenforceable Contract

2. These persons are bound by contracts:

A. Contracting parties C. Assigns
B. Heirs D. All of the them

3. Essential requisites of a contract:

A. Consent C. Subjec
B. Cause D. All of these.

4. When the object of the contract is outside the commerce of man, the contract is:
A. Remissible C. Unenforceable
B. Voidable D. Void

5. It is a contract wherein a person binds himself to a creditor to fulfill the obligation of the principal debtor in case
the latter should fail to do so:
A. Guaranty C. Pacto Comisorio
B. Suretyship D. None of the three

6. Contracts are effective and binding only between the parties, their assigns and their heirs. Three of the following
enumeration are exceptions as provided by law which does not belong to the exception?
A. Where there is stipulation in favor of a third party.
B. Where one of the parties to the contract dies and thereafter a suit is filed on the basis of the contact.
C. Where the obligations arising from contract are not transmissible by their nature.
D. Where the obligations arising from the contract are not transmissible by stipulation or by provision of law.

7. A solidary obligation is one in which each of the debtors is liable for the entire obligation or debt, and each of
the creditors is entitled to the entire credit. Obligations shall also be considered solidary under the three following
exceptions. Which does not belong to the exception?
A. When solidary is expressly stipulated in the obligation.
B When the prestation is indivisible and there are two or more debtors and creditors.
C. When the law expressly provides solidarity.
D. When solidarity is required from the nature of the obligation.

8. It is a contract wherein a person binds himself to render some service or to do something in representation or
on behalf of another, with the consent or authority of the latter.
A. Agency C. Contract of piece of work
B. Contract of service D. None of the three

9. A and B who are both unemancipated minors entered into a contract. The contract entered into by and between
them is:
A. Rescissible C. Voidable
B. Unenforceable D. Void

10. Which of the following contracts cannot be ratified?

A. Those whose cause or object did not exist at the time of the transaction
B. Unauthorized contracts
C. Those where both parties are incapable of giving consent.
D. Those that fail to comply with Statute of Frauds

11. The creditor shall have a right to indemnify for damages when, through the fault of the debtor, all the things
which are alternatively the object of the obligation have been lost or compliance of the obligation has become
impossible. The indemnity shall be fixed taking as a basis
A. The value of the least expensive thing
B. The value of the most expensive thing
C. The value of the last thing which disappeared
D. The value of the first thing which disappeared

12. Mr. Santos sold his car to Mr. Garcia for P150,000.00. No date is fixed by the parties for the performance of
their respective obligations. The obligation of Mr. Santos is:
A. To deliver the car immediately as there is a perfected contract
B. To deliver the car upon the payment by Mr. Garcia of P50,000.00
C. To rescind the contract since there is no time fixed for the delivery and payment of the car.
D. To deliver the car within a reasonable time after the demand of Mr. Garcia to deliver.

13. When the subject matter of a contract is lost through fortuitous event, who is liable?
A. The debtors C. The creditors
B. None of them D. Both creditor and debtor

14. The buyer of a thing has the right to the fruits of the thing:
A. From the time the thing bought is delivered
B. From the time the sale is perfected
C. From the time the obligation to deliver the thing bought arises.
D. From the time the fruits are delivered.

15. Three (3) of the following may be valid objects of a contract, except:
A. All that are within the commerce of man.
B. All services which are not contrary to law.
C. Impossible things or services.
D. All rights that are transmissible.

16. A contract executed by two (2) parties and one (1) of the parties in not capable of giving consent is:
A. Voidable C. Void
B. Rescissible D. Unenforceable

17. Three (3) of the following contracts are void. Which one is valid?
A. Oral contract of partnership of three (3) partners and capital contribution is more than P3,000.00 in cash.
B. Written contract contemplating impossible services.
C. Oral contract of partnership where real estate is contributed as capital.
D. Agent’s authority to sell property given orally.

18. These are the basic principles or characteristics of a contract. Which is exception?
A. Freedom or liberty to stipulate
B. Obligatory force and compliance in good faith
C. Binding on third parties
D. Perfected by mere consent
19. When the period is “on or before a date”, the debtor has the benefit of the period. The benefit is lost and the
obligation becomes demandable when:
A. The debtor attempts to abscond
B. After contracting the obligation, the creditor suspects the debtor to becoming insolvent
C. The guarantee given by the creditor is not acceptable to the creditor
D. Demand by the creditor could be useless

20. Simulation of a contract may e absolute or relative. It is relative when:

A. The parties do not intend to be bound at all
B. The contract is void
C. The parties conceal their true agreement
D. Answer not given

21. The proper remedy is annulment of contract and not reformation when:
A. Mistake, fraud, inequitable conduct, or accident has prevented a meeting of minds of the parties.
B. A mutual mistake of the parties causes the failure of the instrument to disclose their real agreement.
C. One party was mistaken and the other knew or believed that the instrument did not state their real
agreement, but concealed the fact from former.
D. Answer not given.

22. The action to annul a voidable contract, such as a contract where one of the parties is incapable of giving
consent to the contract, is extinguished by:
A. Novation C. Ratification
B. Rescission D. Answer not given

23. A contract or receipt for the transport of goods and their delivery to the person named therein to order or
bearer is a:
A. Warehouse receipts C. Bill of lading
B. Dock warrant D. Answer not given

24. Cecilio kidnapped and tortured Eduardo for refusing to sell his (Eduardo’s) land to Cecilio. Eduardo who could
no longer bear the physical pains inflicted upon him signed a document of sale in favor of Cecilio. This sale is
A. Void C. Valid
B. Voidable D. Answer not given

25. Choose the contracts which are voidable.

A. Those undertaken in fraud of creditors when the latter cannot in any manner collect the claims due them.
B. Those where the consent is vitiated by mistake, violence, intimidation, undue influence of fraud.
C. Those whose subject is outside the commerce of man.
D. Those where both parties are incapable of giving consent to a contract.

26. A contract is in the stage of conception when:

A. There is meeting of the minds
B. Negotiations is in progress.
C. The parties come to the agreement
D. The contract is perfected.

27. In an obligation where only one (1) prestation has been agreed upon, but to extinguish the obligation the
debtor is allowed and does render another substitute, the obligation is:
A. Facultative obligation C. Alternative obligation
B. Simple obligation D. Conjoint obligation
28. Mr. Gamboa owes Mr. Evangelista P100,000. Gamboa knows that on maturity date, he will not be able to pay
Evangelista, and in order to prevent attachment of his property by Evangelista, Gamboa, before maturity of his
debt, executes a contract pretending to sell to Mr. Santiago his property. Which of the following statements is
correct/
A. The contract is not valid for lack of consideration
B. The contract is binding between Gamboa and Santiago
C. The contract being simulated and executed to defraud Evangelista is void.
D. Mr. Evangelista can seek rescission of the fictitious contract.

29. A owes solidary creditors XYZ P10,000. There is remission of the debts when:
A. X borrows P10,000 from A.
B. X waives the whole obligation of P10,000 to A.
C. Z makes a will giving the P10,000 debt to A as legacy.
D. Y tells A that instead of paying P10,000, A shall deliver a ring to Y.

Exercises

30. A is obliged to deliver to B one of his three (3) cars.

A. The obligation is not valid because the object is not determined.
B. The obligation is valid because the object is determinable.
C. The obligation is valid. B can choose which one of the three cars.
D. The obligation is valid because there is consent between A and B.

31. Statement 1. Accessions are necessary to the principal thing.

Statement 2. Accessories are not necessary to the principal thing but both must go together.

A. True; False C. Both statements are true

B. False; True D. Both statements are false
32. When a debtor is in delay:
A. He is liable for damages.
B. He is liable even for fortuitous event.
C. All of the above.
D. None of the above.

33. Statement 1. Waiver of future fraud is null and void.

Statement 2. Waiver of future negligence is valid.

A. Both statements are false C. True; False

B. Both statements are true D. False; True

34. Statement 1. If the law or contract does not state the diligence which is to be observed in the
performance of the obligation, neither party is liable for negligence.
Statement 2. If a party is negligent and at the same time in bad faith, he shall be liable for
damages by reason of fraud.

A. True; False C. Both statements are true

B. False; True D. Both statements are false

35. A promises to pay B P1,000 upon demand of B.

A. This is an obligation with a period.
B. This is not valid because the performance depends solely upon the will of B.
C. This is a pure obligation.
D. This is an obligation with a potestative period.

36. A binds himself to give B, P1,000 if B sells A’s car and P2,000 if B will kill C.
A. The obligation is null and void.
B. The obligation is partly valid and partly null and void.
C. The obligation is null and void because the first condition is potestative and the second is
contrary to law.
D. The obligation is partly subject to a period and partly conditional.

37. A is obliged to deliver his TV set to B on December 1, 2010. Subsequently, A and B agreed that A shall deliver
his radio as a substitute.
A. The obligation is facultative.
B. This is real novation.
C. The obligation is extinguished by payment.
D. If the radio is lost by fortuitous event, the obligation is extinguished.

38. In obligations with a penal clause, the creditor can recover damages, and interest apart from the penal clause:
A. When the debtor refuses to pay the obligation.
B. When the debtor is guilty of fraud.
C. All of the above.
D. None of the above.

39. Statement 1. The nullity of the penal clause does not carry with it the nullity of the principal
obligation.
Statement 2. The nullity of the principal obligation carries with it the nullity of the penal
clause.

A. True; False C. Both statements are true

B. False; True D. Both statements are false

40. The obligor is liable for fortuitous event except one. Which is the exception?
A. The law so provides.
B. The obligation to deliver a generic thing.
C. The obligation so provides.
D. The obligation to deliver a determinate thing.

41. Which statements is correct?

A. Condonation is generally gratuitous.
B. Condonation is gratiuitous.
C. Condonation is onerous.
D. Condonation is essentially gratuitous.

42. The following are real contracts. Which is not?

A. Contract of donation C. Contract of guaranty
B. Contract of deposit D. Contract of loan

43. The following cannot give consent to a contract. Which is the exception?
A. Un-emancipated minors
B Deaf-mute who does not know how to write.
C. Insane person during his lucid interval.
D. Person under civil interdiction.

44. Choose the contract which is voidable:

A. Those undertaken in fraud of creditors where the latter cannot in any manner collect his
credit.
B. Those where consent of one contracting party was vitiated by violence or mistake.
C. Those whose object is outside the commerce of man.
D. Those where both contracting parties cannot give consent.

45. An absolutely simulated contract is :

A. Void C. Unenforceable
B. Voidable D. Rescissible

46. An insane entered into contract with a minor.

A. The contract is unenforceable.
B. The contract is voidable
C. The contract is rescissible
D. The contract is void.

47. Thru some mistake on the part of a bank personnel, A was given One Million Pesos instead of One Thousand
Pesos. This situation will be governed by the provisions on
A. Contracts C. Quasi-delicts
B. Quasi-contracts D. Law

48. A contract is in the stage of conception when:

a. There is meeting of the minds.

b. Negotiations are in progress.
c. The parties come to an agreement.
d. The contract is perfected.

49. If the obligor binds himself to perform his obligation as soon as "he shall have obtained a loan" from a certain
bank, this obligation is:

a. With a Term
b. Conditional
c. Suspensive
d. Resolutory

50. Contracts entered into in a state of drunkenness or during a hypnotic spell are:

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