1.

Contracts take effect only between the parties or their assigns and heirs, except where the rights and
obligations arising from the contract are not transmissible by their nature, by stipulation, or by provision
of law. In the latter case, the assigns or the heirs are not bound by the contracts. This is known as the
principle of a. Relativity of contracts.

b. Freedom to stipulate.

c. Mutuality of contracts.

d. Obligatory force of contracts.

2. The presence of a vice of consent vitiates the consent of a party in a contract and this renders the
contract

a. Rescissible.

b. Unenforceable. c. Voidable.

d. Void.

3. The conformity or concurrence of wills (offer and acceptance) and with respect to contracts, it is the
agreement of the will of one contracting party with that of another or others, upon the object and terms
of the contract. a. Consent

b. Cause

c. Object

d. Meeting of the minds

4. The manifestation by the offeree of his assent to the terms of the offer.

a. Acceptance

b. Offer

c. Meeting of the minds d. Consent

5. One giving a person for a consideration a certain period within which to accept the offer of the offerer.
It is separate and distinct from the contract which will be perfected upon the acceptance of the offer. a.
Option contract

b. Option period

c. Option money

d. Option

6. That which arises from an ignorance of some provisions of law, or from an erroneous interpretation of
its meaning, or from an erroneous conclusion as to the legal effect of an agreement, on the part of one
of the parties. a. Mistake of law

b. Mistake of Fact
c. Mistake

d. Fraud

7. The essential or more proximate purpose which the contracting parties have in view at the time of
entering into the contract. a. Cause

b. Object

c. Meeting of the minds

d. Consent

8. The purely personal or private reason which a party has in entering into a contract. a. Motive

b. Cause

c. Consent

d. Purpose

9. Refers to the manner in which a contract is executed or manifested. a. Form of a contract

b. Informal Contract

c. Reformation of contract

d. Interpretation of contract

10. Remedy allowed by law by means of which a written instrument is amended or rectified so as to
express or conform to the real agreement or intention of the parties when by reason of mistake, fraud,
inequitable conduct, or accident, the instrument fails to express such agreement or intention. a.
Reformation

b. Rescission

c. Annulment

d. Interpretation of contract

11. It is a principle which holds that parties are bound not only by what has been expressly provided for
in the contract but also to the natural consequences that flow out of such agreement. a. Obligatory force
of contracts

b. Mutuality of contracts

c. Autonomy of contracts

d. Relativity of contracts

12. Mistake of fact that is common to both parties of the instrument which causes the failure of the
instrument to express their true intention. a. Mutual mistake

b. Mistake of fact
c. Mistake of law

d. Common mistake

13. The determination of the meaning of the terms or words used by the parties in their written
contract. a. Interpretation of contract

b. Reformation of contract

c. Form of contract

d. None of the above

14. Those validly agreed upon because all the essential elements exist and, therefore, legally effective,
but in the cases established by law, the remedy of rescission is granted in the interest of equity. a.
Rescissible contract

b. Voidable contract

c. Unenforceable Contract

d. Void contract

15. It is a rule which holds that the freedom of parties to contract includes the freedom to stipulate,
provided the stipulations are not contrary to law, morals, good customs, public order or public policy.

a. Obligatory force of contracts

b. Mutuality of contracts c. Autonomy of contracts

d. Relativity of contracts

16. Those which, because of certain defects, generally produce no effect at all. a. Void contract

b. Voidable contract

c. Rescissible contract

d. Unenforceable Contract

17. Those which possess all the essential requisites of a valid contract but one of the parties is incapable
of giving consent, or consent is vitiated by mistake, violence, intimidation, undue influence, or fraud. a.
Voidable contract

b. Rescissible contract

c. Unenforceable Contract

d. Void contract

18. Those that cannot be enforced in court or sued upon by reason of certain defects provided by law
until and unless they are ratified according to law. a. Unenforceable Contract

b. Voidable contract
c. Rescissible contract

d. Void contract

19. Which of the following statements are correct?

a. All contracts are perfected by mere consent

b. All contracts are perfected by delivery of the object

c. All contracts are required to be in writing d. All contracts are required to have a valid consideration

20. It is a principle which holds that contracts must be binding to both parties and its validity and
effectivity can never be left to the will of one of the parties

a. Obligatory force of contracts b. Mutuality of contracts

c. Autonomy of contracts

d. Relativity of contracts

21. It refers to the rule that a contract is binding not only between the parties but extends to the heirs,
successors in interest and assignees of the parties, provided that the contact involved transmissible
rights by their nature or by stipulation of law.

a. Obligatory force of contracts

b. Mutuality of contracts

c. Autonomy of contracts d. Relativity of contracts

22. The following are the ways by which innominate contracts are regulated except:

a. By the stipulation of the parties b. By the general principles of quasi-contracts and delicts

c. By the rules governing the most analogous nominate contracts

d. By the customs of the place

23. The following are solemn contracts (contracts which must appear in writing), except:

a. Donations of real estate or of movables if the value exceeds P5,000

b. Stipulation to pay interest in loans

c. Sale of land through an agent (authority must be in writing) d. Construction contract of a building

24. The following are rescissible contracts, except:

a. Entered into by guardian whenever ward suffers damage more that ¼ of value of property

b. Agreed upon in representation of absentees, if absentee suffers lesion by more than ¼ value of
property

c. Contracts where fraud is committed on creditor (accion pauliana) d. Contracts entered into by minors.
25. The following are requisites before a contract entered into in fraud of creditors may be rescinded
except:

a. There must be credit existing prior to the celebration of the contract

b. There must be fraud, or at least, the intent to commit fraud to the prejudice of the creditor seeking
rescission

c. The creditor cannot in any legal manner collect his credit (subsidiary character of rescission) d. The
object of the contract must be legally in the possession of a 3rd person in good faith

26. The following are the characteristics of a voidable contract, except:

a. Effective until set aside

b. May be assailed/attacked only in an action for that purpose

c. Can be confirmed or ratified d. Can be assailed only by either party

27. The following are void contracts except:

a. Pactum commisorium

b. Pactum de non alienando

c. Pactum leonine d. Pacto de retro

28. If one of the parties to the contract is without juridical capacity, the contract is:

a. Voidable

b. Rescissible c. Void

d. Unenforceable

29. It is the meeting of the minds between parties on subject matter and cause of contract. a. Contract

b. Consent

c. Obligation

d. Condition

30. When both parties to the contract are minors, the contract is

a. Voidable

b. Rescissible

c. Void d. Unenforceable

31. When the consent of one of the parties was vitiated, the contract is a. Voidable

b. Rescissible

c. Void
d. Unenforceable

32. Consent was given by one in representation of another but without authority. The contract is:

a. Voidable

b. Rescissible

c. Void d. Unenforceable

33. Which of the following contracts is void?

a. An oral sale of a parcel of land b. A sale of land by an agent in a public instrument where his authority
from the principal is oral

c. A donation of a wrist watch worth P4,500

d. A relatively simulated contract

34. Which of the following statements is wrong?

a. Creditors are protected in cases of contracts intended to defraud them

b. Contracts take effect only between the parties, their assigns and heirs, except in case where the rights
and obligations arising from the contract are not transmissible by their nature, or by stipulation or by
provision of law

c. If a contract should contain some stipulation in favor of a third person, he may demand its fulfillment
provided he communicated his acceptance to the obligor before its revocation d. In contracts creating
real rights, third persons who come into possession of the object of the contract are not bound thereby

35. It is the meeting of the minds between two persons whereby one binds himself with respect to the
other to give something or to render some service. a. Contract

b. Obligation

c. Condition

d. Period

36. This takes place upon the concurrence of the essential elements of the contract:

a. Negotiation b. perfection

c. consummation

d. principal

37. This covers the period from the time the prospective contracting parties indicate interest in the
contract to the time the contract is concluded or perfected.

a. Principal

b. Perfection
c. Consummation d. Negotiation

38. Which of the following is not a limitation of a contract.

a. Law

b. Morals c. Obligation

d. Public policy

39. It is perfected by mere consent or upon the meeting of the minds upon the object and consideration
of the contract. a. Consensual contracts

b. Real contracts

c. Formal contracts

d. Solemn contracts

40. It is a contract that perfected upon delivery.

a. Consensual b. Real

c. Formal

d. Solemn

41. A delivered his bracelet to B for B’s necklace. No written agreement was signed by the parties. Which
of the following is appropriate description of the contract between A and B? a. Onerous and bilateral

b. Bilateral and innominate

c. Bilateral and innominate

d. Aleatory and nominate

42. They are the elements that are found in certain contracts and are presumed to exist unless set aside
by the parties

a. Accidental elements

b. Artificial elements c. Natural elements

d. Incidental elements

43. They refer to the elements that may be stipulated by the contracting parties a. Accidental elements

b. Artificial elements

c. Natural elements

d. Incidental elements

44. The following are some accidental elements of a contract of sale, except

a. Terms of payment
b. Place of payment

c. Interest rate d. Accession and accessories

45. A contract where the cause with respect to each contracting party is the prestation or the promise of
a thing or service by the other is a. An onerous contract

b. An innominate contract

c. A gratuitous contract

d. An aleatory contract

46. A contract where one party receives no valuable consideration and the cause is the liberality of the
benefactor is a. A gratuitous contract

b. An onerous contract

c. A unilateral contract

d. A commutative contract

47. The following instances will render an offer ineffective before acceptance is conveyed. Which one will
not? When one of the parties

a. Is civilly interdicted

b. Becomes insane

c. Becomes insolvent d. Is placed under a hypnotic spell

48. The following statements pertain to the cause of a contract. Which statement refer to motive?

a. It is the essential reason of a contract.

b. It is always known to the contracting parties c. It is illegality does not affect the validity of the contract

d. there will be no contract without it

49. The bargaining point, that is, when negotiation is in progress (stage in the life of a contract)

a. Consummation

b. Perfection c. Conception

d. Birth

50. The meeting of minds regarding the object and cause of the contract (stage in the life of a contract)

a. Conception

b. Death

c. Preparation d. Birth
51. The principle that contracting parties may establish such stipulations, clauses, terms and conditions
as they may deem convenient, provided they are not contrary to law, moral, public policy and public
order, refer to the principle of a. Liberty of contract

b. Consensuality of contract

c. Relativity of contract

d. Mutuality of contract

52. The point where the parties have performed their respective obligations and the contract is
terminated

a. Preparation

b. Perfection

c. Conception d. Consummation

53. When there is concurrence of offer and acceptance, there is

a. Payment b. Consent

c. Consignation

d. Tender of payment

54. An absolutely simulated or fictitious contract is a. Void

b. Rescissible

c. Voidable

d. Unenforceable

55. A contract where both contracting parties are incapable of giving consent is

a. Void b. Unenforceable

c. Rescissible

d. Voidable

56. Contract which has no effect at all

a. Rescissible

b. Unenforceable

c. Voidable d. Void

57. Contract which cannot be ratified

a. Rescissible

b. Unenforceable
c. Voidable d. Void

58. If mistake, fraud, accident or inequitable conduct has prevented a meeting of the minds of the
parties to a contract, the proper remedy is

a. Ratify the contract b. Annulment of the contract

c. Ask for a specific performance

d. Reformation of the contract

59. Although validly agreed upon, courts can nullify this contract because of damage to one of the
parties or to a third person and its enforcement, may cause injustice by reason of some external facts a.
Rescissible contracts

b. Unenforceable contracts

c. Voidable contracts

d. Void contracts

60. A contract where the fulfillment is dependent upon the chance, so the values may vary because of
the risk or chance.

a. Commutative

b. Remunerative c. Aleatory

d. Gratuitous

61. A clause providing that the mortgagee will automatically own the property mortgaged if the debt is
not paid at maturity is

a. Dacion en pago b. Pactum Commissorium

c. Payment by cession

d. Upset price

62. The contract must bind both contracting parties

a. Consensuality of contract b. Mutuality of contract

c. Simplicity of contract

d. Relativity of contract

63. Not a characteristic of contract

a. Consensuality of contract

b. Mutuality of contract c. Simplicity of contract

d. Relativity of contract

64. Contracts are generally effective only between the parties, their assigns and their heirs
a. Consensuality of contract

b. Mutuality of contract

c. Simplicity of contract d. Relativity of contract

65. A stipulation in favor of a third person e. Stipulation pour autrui

f. Assignment of credit

g. Stipulation pour over

h. Pactum commissorium

66. Not a requisite of stipulation pour autrui

a. The contracting parties must have clearly and deliberately conferred a favor upon third person

b. The stipulation must be part of the contract

c. The third person communicated his acceptance to the obligor before its revocation d. There must be
an agency between either of the parties and the third person

67. The following contracts are not perfected until the delivery of the object of the obligations, except

a. Pledge

b. Commodatum

c. Deposit d. Sale

68. Pledge, deposit and commodatum are

a. Consensual contracts

b. Solemn contracts c. Real contracts

d. Formal contracts

69. Acceptance of an offer made by letter or telegram shall bind the offeror. From the time the

a. Offeree accepted the offer

b. Offeree sent his letter or telegram c. Acceptance came to the knowledge of the offeror

d. Offeror made the offer

70. A contract where consent is given through mistake, violence, intimidation, undue influence or fraud
is

a. Rescissible

b. Unenforceable c. Voidable

d. Void
71. The mortgagor will execute an instrument to transfer the ownership over the property mortgaged to
the mortgagee if the debt is not paid at maturity is

a. Void b. Valid

c. Voidable

d. Unenforceable

72. One is not a requisite needed in order that obligation shall be extinguished by loss or destruction of
the thing due:

a. When the thing is lost without the fault of the debtor b. When the thing lost is generic

c. When the thing is lost before the debtor has incurred in delay.

d. When the thing lost is specific

73. The obligation is demandable on the date of the obligation and shall continue to be in force up to the
arrival of the day certain: a. Resolutory period

b. Indefinite period

c. Suspensive period

d. Legal period

74. Characteristic of void contracts, except

a. Defense of illegality cannot be waived

b. Cannot be ratified

c. Action for declaration of inexistense does not prescribe d. The inexistence can be assailed by third
person

75. Unless ratified, suits will not prosper if the contract is

a. Rescissible b. Unenforceable

c. Voidable

d. Void

76. Contracts are effective and binding only between the parties, their assigns and their heirs. Three of
the following enumerations are exceptions as provided by law. Which does not belong to the exception?

a. Where there is a 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 contract.

c. Where the obligations arising from contract are not transmissible by their nature.

d. Where the obligations arising from contract are not transmissible by stipulation or by provision of law.
77. There is stipulation pour autrui in case the stipulation states that one of the parties to a contract is
exempt from all previous claims and damages sustained by the other party.

A stipulation pour autrui need not be in any particular form, and may even be inferred from the fact that
the beneficiary has enjoyed the same for a considerable period

a. True; true

b. True; false c. False; true

d. False; false

78. The following, except one, are the characteristics of void or inexistent contract. Which is the
exception?

a. They are not subject to ratification

b. The right to raise defense of illegality cannot be waived. c. The defense of illegality of the contract is
available to third persons whose interest is not directly affected.

d. The action or defense for declaration of the nullity or inexistence of the contract does not prescribe.

79. Through insidious words or machinations, A was able to induce B to enter into a contract which
without them B would not have agreed to it. There is:

a. Undue Influence b. Fraud

c. Mistake

d. Misrepresentation

80. 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.

81. 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

82. Rescission of contract can take place in this case

a. When the thing which is the object of the contract is legally in the possession of a third person who
acted in bad 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 as to remainder

d. When the seller cannot return the installments paid to him by the buyer
83. A defective contract where damage or lesion is essential a. Rescissible

b. Voidable

c. Unenforceable

d. Void

84. Three of the following contracts are void. Which one is not? a. Oral contract of partnership of three
partners and capital contribution is more than P3,000 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 land is given orally.

85. When bilateral contracts are vitiated with vices of consent, they are rendered

a. Rescissible

b. Void

c. Unenforceable d. Voidable

86. Which of the following can be considered as a feature of a void contract?

a. Subject to ratification

b. It exists

c. Action or defense of nullity is subject to prescription d. Novation cannot apply

87. These persons are bound by contracts, except: a. Third Persons

b. Assigns

c. Heirs

d. Parties

88. Liable for the loss of the subject matter by fortuitous event:

a. Creditor ·

b. Debtor c. None of them

d. Both creditor and debtor

89. An agreement in restraint of trade or establishing monopoly is:

a. Perfectly valid

b. Voidable

c. Unenforceable d. Void
90. Three of the following are rescissible, which is not?

a. Sale of property under litigation made by defendant without the consent of plaintiff or authority of
the court.

b. Those made to defraud creditors when the latter have no other means to recover their claims.

c. Those agreed upon in representation of absentees, if the absentee suffers lesion by more than ¼ of
the value of the property subject of the contract d. Contract of sale and the price is unusually inadequate
resulting to lesion

91. 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

92. In order that a stipulation in favor of a third person would be valid and binding upon the parties
thereto the following are the requisites except:

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.

93. Dolo incidente entitles the person against whom it was employed the right to seek the annulment of
the contract.

A stipulation pour autrui is an exception to the rule on relativity of contracts.

a. True; true

b. True; false c. False; true

d. False; false

94. If the cause is not stated in the contract it is presumed that it is unlawful.

The action for rescission is subsidiary it cannot be instituted except where there is no other legal means
to obtain reparation for damages suffered.

a. True; true

b. True; false c. False; true

d. False; false
95. 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 1/4 of the value. What is the status of the contract?

a. Unenforceable

b. Rescissible

c. Void d. Voidable

96. If one party was mistaken and the other acted fraudulently or inequitably in such a way that the
instrument does not state their true intention, the former may ask for the annulment of the instrument.

The statement of a false cause in contracts shall render them void, if it should not be proven that they
were founded upon another cause which is true and lawful.

a. True; true

b. True; false c. False; true

d. False; false

97. Which of the following is not a requisite for the validity of a contract?

a. Consent

b. Object

c. Cause d. Delivery

98. Three of the following contracts are void. Which is the exception?

a. Those who cause, object or purpose is contrary to law, morals, good custom, 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 both parties
are incapable of giving consent to a contract

99. Which of the following is not presumed to be legal subrogation?

a. When a creditor, pays another creditor who is preferred

b. When a third person, not interested in obligation, pays with the approval of the debtor

c. When a third person interested in the obligation pays even without the. approval of the debtor d.
None of them

100. Essential requisites of a contract:

a. Consent

b. Cause

c. Subject d. All of them

101. 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 agreement is void d. All of the above

102. Valid, binding and enforceable until annulled

a. Rescissib!e contract

b. Void and ab initio contract c. Voidable contract

d. Validable contract

103. In three of the following defective contracts, ratification cleanses the defect. Which is the
exception? ·

a. Both parties are incapable of giving consent ·

b. Sale of immovable property or interest therein orally entered into c. Sale of piece of land thru an
agent and the authority is oral

d. Contracts entered into by a person who has been given no authority

104. Which of the following contract is voidable?

a. Those whose object is outside the commerce of men

b. Those which are absolutely fictitious c. Those where one of the parties is incapacitated

d. Those which contemplate an impossible service

105. 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 law and morality

c. Contrary to public policy

d. Contrary to public order.

106. In voidable contracts, there is no need to ratify the same before they can be considered valid. In
unenforceable contracts, however, ratification is mandatory before they can be considered enforceable.

“There is undue influence if insidious words or machinations was employed by a party on the other just
to obtain the latter’s consent, without the latter would not have entered into the contract.

a. True; true b. True; false

c. False; true

d. False; false

107. Three of the following are void contracts. Which is the exception?
a. Contracts to prevent a known supporter of a political rival from voting for his candidate for a valuable
consideration b. Contracts with valid consideration but with unlawful motives

c. Contracts where the cause is immoral

d. Absolutely simulated contracts

108. Statute of Frauds is applicable to:

a. Executed contract

b. Oral contract of loan c. Contract not to be performed within a year from the making thereof

d. Mutual promise to marr.

109. Which of the following is correct?

a. An action to enforce judicially a natural obligation prescribes in 4 years

b. An action for annulment of contract is imprescriptible c. An action to declare a contract void is not
subject to prescription

d. An action for rescission of contract prescribes in five (S) years counted from the execution of the act

110. Which of the following contracts is not rescissible?

a. Those which are entered into by guardians whenever the wards. whom they represent suffer a lesion
of more than ¼ of the value of the object of the contract.

b. Those executed in representation of an absentee, if the latter suffer a lesion more than 1/4 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 tatter cannot in any other manner collect the claims
due them ·

111. When there is concurrence of offer and acceptance, there is:

a. Consummation

b. Conception c. Consent

d. Consideration

112. Which of the following contracts 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

113. Which of the following contracts 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 1/4 of the value of
the object of the contract

d. Those which are absolutely simulated or fictitious

114. As a rule contracts take effect only between the parties.

Mere incidental benefit of the third person is enough for stipulation pour autri exist provided he accepts
the same.

a. True; true

b. True; false

c. False; true d. False; false

115. A contract wherein both contracting parties are incapable of giving consent and yet ratified by the
guardian of either of the parties is:

a. Rescissible b. Voidable

c. Unenforceable

d. Void

116. Three of the following may objects of contracts, except:

a. Those things within the commerce of man.

b. Services which are not contrary to law, morals, good customs. c. Intransmissible rights

d. Heredity rights

117. Contracts without cause are voidable because cause is presumed to exist in a contract.

Offer must be absolute and acceptance must be certain before can there be meeting of the minds of
parties.

a. True; true

b. True; false

c. False; true d. False; false

118. Three of the following contracts are void. Which one is not? a. Oral contract of partnership wherein
more than P3,000 has been contributed by the partners.

b. Agent given oral authority to sell the land of the principal.

c. Partnership contracts in private instrument wherein immovables have been contributed.

d. Oral contract of limited partnership.

119. Which one of the following constitutes fraud?

a. Misrepresentation made not in bad faith.

b. Misrepresentation by a third person and both parties mistaken.

c. Usual exaggerations in trade or dealer's/sale's talk d. Failure to disclose facts when there is a duty to
reveal them as when the parties are bounded by confidential relations

120. There are principles in contracts. Which is not?

a. Freedom or autonomy of contracts

b. Relativity of contracts

c. Perfection by mere consent d. Binding on third persons

121. Which of the following constitutes an offer?

a. Business advertisements an offer

b. Advertisements for bidders c. An offer made through an agent

d. Before acceptance is conveyed, either of the parties dies, civilly interdicted, becomes insane or
insolvent

122. There is acceptance of the offer only after it has come to the knowledge of the offerer,

Lesion or inadequacy of cause shall as a rule make a contract defective.

a. True; true b. True; false

c. False; true

d. False; false

123. If the cause is not stated in the contract it is presumed that it does not exist and therefore the
contract is void.

In order that a contract may be voidable, there must be damage.

a. True; true

b. True; false

c. False; true d. False; false

124. The action to annul a voidable contract is extinguished by.

a. Novation

b. Rescission c. Ratification

d. Estoppel

125. Which of the following contracts is unenforceable?

a. One of the contracting parties is incapable of giving consent.

b. Contract of lease of a car for two years orally entered into. c. Oral contract of sale of land.

d. Mortgage contract in private instrument.

126. Which of the following contracts is not void ab initio?

a. Those whose object is outside the commerce.

b. Those whose object did not exist at the time of transaction.

c. Those which contemplate an impossible service. d. Those undertaken in fraud of creditors.

127. Contract which cannot be sued upon unless ratified, thus it as if they have no effect yet:

a. Voidable

b. Void

c. Rescissible d. Unenforceable

128. Which of the following contracts is valid?

a. Oral contract of agency giving authority to an agent to sell the land of the principal.

b. Oral partnership agreement where immovables are contributed.

c. Oral contract of sale of an immovable entered into by an agent who was given oral authority by the
principal. d. Oral agreement to answer all the expenses for the wedding reception if A marries B.

129. Which of the following contracts must be in writing to be enforceable?

a. Acts and contract for the creation, transmission, modification, extinguishments of real rights. ·

b. The cession, repudiation, renunciation of heredity rights. c. Contract of guaranty

d. Contract of partnership

130. An offer made by the principal is accepted from the time acceptance is conveyed to him or his
agent.

The object of a contract may be future things; including future inheritance.

a. True; true

b. True; false c. False; true

d. False; false

131. A contract which is the direct result of a void contract is voidable.

If the object of the contract did not exist at the time of the transaction it is void. Therefore, this may
include sale future things, ·

a. True; true
b. True; false

c. False; true d. False; false

132. If the words of the contract are clear and leave no doubt on the intention of the parties,
interpretation of contracts may be proper.

In case of gratuitous contracts, doubts shalt be resolved in favor if greatest reciprocity of interest.

a. True; true

b. True; false

c. False; true d. False; false

133. In case of doubt, a contract purporting to be sale shall be construed as mortgage.

In annulment of contracts, there shall always be mutual restitution of both parties thereof.

a. True; true b. True; false

c. False; true

d. False; false

134. Just like voidable and unenforceable contracts, rescissible contracts may also be ratified.

In case of fraud or mistake, the action for annulment must be made within four years from the
commission of the vice of consent.

a. True; true

b. True; false

c. False; true d. False; false

135. Mutual error as to the legal affect of an agree when the purpose of the parties is frustrated may
result in the reformation of the instrument.

Mutual mistake of the parties and the instrument does not express the true agreement will make the
contract voidable.

a. True; true

b. True; false

c. False; true d. False; false

136. A without authority from B sold the latter's car in the name of the latter. The contract is therefore:

a. Rescissible

b. Voidable c. Unenforceable

d. Void
137. If the cause is not stated in the contract, it is presumed that it does not exist.

Lesion or inadequacy of cause as a rule invalidates a contract.

a. True; true

b. True; false

c. False; true d. False; false

138. Three of the following contracts must be in writing to be valid. Which is the exception?

a. Contract of partnership where immovables are contributed.

b. Contract of agency to sell the land of the principal. c. Contract where the amount involved exceeds
five hundred pesos.

d. Negotiable instruments.

139. The following are characteristics of a void contract. Which is the exception?

a. The action or defense for the declaration of the inexistence of a contract does not prescribe.

b. It cannot be ·ratified. c. A contract which is the direct result of a void or illegal contract is voidable.

d. The defense or illegality of a void contract is not available to third person whose interests are not
directly affected.

140. The following are attributes of a voidable contract. Which is not?

a. It is binding, valid and enforceable before annulment. b. Damage is material to be voidable contract.

c. It can be ratified and ratification has retroactive effect.

d. The capacitated cannot allege the incapacity of the other party

141. The following are attributes of a rescissible contract. Except:

a. It is valid until rescinded.

b. Damage or lesion is absolutely material.

c. Third person whose interest is affected may ask for rescission. d. It is a principal remedy of the creditor
to collect his credit

142. Nominate contracts are those without special designations or names under the law.

Innominate contracts shall be governed by the custom of the place.

a. True; true

b. True; false

c. False; true d. False; false

143. Contracts take effect not only between the parties but also their heirs and assigns and the heir is
liable beyond the value of the property he received from the decedent.

In stipulation pour autri, the third person must communicate his acceptance of the stipulation before its
revocation.

a. True; true

b. True; false c. False; true

d. False; false

144. If the contract is unenforceable and a public document is necessary for the contract’s registration
the parties may compel each other to make the needed public document.

Unenforceable contracts unlike void contracts may be assailed by the third persons.

a. True; true

b. True; false

c. False; true d. False; false

145. When the defect of the contract consists in the incapacity of one of the contracting parties, the
incapacitated is obliged to make restitutions unless he did not benefit by the thing or price received by
him.

The action for annulment of contracts shall be extinguished when the thing which is the object thereof is
lost through fortuitous event or fraud or fault of the person who has a right to institute the proceedings.

a. True; true b. True; false

c. False; true

d. False; false

146. Ratification of a voidable or unenforceable contract must be made within the prescriptive period
provided for by the law.

Ratification cleanses a voidable or unenforceable contract from all of its defects from the moment it was
constituted.

a. True; true

b. True; false c. False; true

d. False; false

147. If one of the parties at the time of making the offer or acceptance was already insane the contract is
voidable.

If before the acceptance is conveyed to the offerer, either of the parties becomes insane, the contract is
void, that is, the offer is noneffective.
e. True; true f. True; false

g. False; true

h. False; false

148. Element without which there cannot be a contract is: a. Essential element

b. Natural element

c. Accidental element

d. All of the above

149. Contracts take effect only to the parties, their assigns and heirs except where the rights and
obligations arising therefrom:

a. Is not transmissible by their nature

b. Is not transmissible by stipulation of the parties

c. Is not transmissible by provision of law d. All of the above

150. Where damages is caused to either or the contracting parties or to a third person, the contract may
be:

a. Annulled b. Rescinded

c. Ratified

d. None of the above

151. When the contract lacks one of the essential elements the contract is:

a. Rescissible b. Void

c. Voidable

d. None of the above

152. The act or means by virtue of which efficacy is given to a contract, which suffers from a vice of
curable nullity. a. Ratification

b. Resolution

c. Rescission

d. None of the above

153. A remedy in equity by means of which a written instrument is made or constructed so as to express
or conform to the real intention of the parties when some error or mistake has been committed.

a. Rescission

b. Ratification c. Reformation
d. None of the above

154. Although contracts bind only contracting parties, their assigns and heirs, in the following instances
third persons are bound thereby:

a. In case of stipulation pour autrui

b. In contracts creating real rights

c. In contracts intended to defraud the creditors d. All of the above

155. A qualified acceptance constitutes:

a. An absolute acceptance

b. A meeting of the minds between the parties c. Counter offer

d. None of the above

156. An offer becomes ineffective if, before acceptance is conveyed, either parties becomes:

a. Civilly interdicted

b. Insane ·

c. Insolvent d. All of the above

157. A contract where consent is given through mistake, violence or intimidation is:

a. Void

b. Unenforceable

c. Rescissible d. Voidable

158. The span of time wherein a person is in possession, temporarily, of all his mental faculties: a. Lucid
interval

b. Reglementary period

c. Option period

d. Prescriptive period

159. Contracts entered into in a state of drunkenness or during hypnotic spell is:

a. Rescissible b. Voidable

c. Void

d. Unenforceable

160. An offer made through an agent is accepted from the time acceptance is communicated to:

a. The principal

b. The household member of the principal c. The agent

d. Both the principal and the agent

161. The essential or impelling reason why the parties enter into a contract:

a. Motive b. Cause

c. Profit

d. None of the above

162. The statement of a false cause in contracts shall render the contracts:

a. Rescissible

b. Voidable c. Void

d. Unenforceable

163. If mistake, fraud or accident has prevented a meeting of the minds of the parties, the proper
remedy is: a. Annulment

b. Resolution

c. Reformation

d. Rescission

164. The following contracts are valid:

a. Rescissible

b. Annuallable

c. Unenforceable d. All of the above

165. A contract entered into in the name of another by one who has no authority or legal representation
is:

a. Void

b. Rescissible

c. Annuallable d. Unenforceable

166. The following is an example of a real contract:

a. Contract of pledge

b. Contract of deposit

c. Contract of commodatum d. All of the above

167. Business advertisements of the thing for sale are:

a. Definite offer b. Invitation to make an offer

c. Counter offer
d. Acceptance of the offer

168. In case of divisible contract, if the illegal terms can be separated from the legal ones, that the latter
can be enforced.

The defense of illegality of contracts is available to third persons whose interest are directly affected. a.
True; true

b. True; false

c. False; true

d. False; false

169. It is considered as part of the price and as proof of the perfection of the contract.

a. Option money b. Earnest money

c. Reservation

d. None of the above

170. The principle of autonomy of contracts means that the contracting parties as a rule may agree upon
any stipulation, clause, term and condition.

Relativity of contracts means that contracts take effect not only between the parties but also their heirs
and assigns.

a. False;False b. True;True

c. False;True

d. True;False

171. The contract entered into by the persons who cannot give consent is

a. Void ab initio because actually there is no consent

b. Unenforceable only because the contract may be ratified

c. Rescissible because of the damage caused to the person incapacitated d. Voidable as there is consent
although vitiated or defective

172. A defective contract because it is entered into in the name of another without or in excess of
authority, or it is verbal is a. Unenforceable

b. Void

c. Voidable

d. Rescissible

173. The meeting of minds manifests consent after the acceptance upon the thing and the cause which
are to constitute the contract. Which of the following constitute a definite offer? a. An offer made
through an agent.
b. Business advertisements of things for sale.

c. Advertisements for bidders.

d. None of the above.

174. If the cause is not stated in the contract it is presumed that it is lawful.

The action for rescission in subsidiary; it cannot be instituted except when there is no other legal means
to obtain reparation for damages suffered. a. True; true

b. True; false

c. False; true

d. False; false

175. Which of the following statements is false?

a. Obligations arising from contracts have the force of law between the contracting parties and must be
complied with in good faith.

b. Fraud committed in the performance of an obligation gives the injured party the right to annul the
contract. c. Not only the parties, but their heirs and assigns are bound by their contract.

d. Generally, the debtor is not liable for the non-performance of his obligation due to fortuitous event.

176. The following cannot give consent to a contract, except;

a. Minors, except sale of necessaries in life

b. Insane persons

c. Demented persons d. Deaf-mutes who do not know how to read and write.

177. It is the manifestation of the meeting of the offer and the acceptance upon the thing which are to
constitute the contract

a. Consideration

b. Contract c. Consent

d. Cause

178. The following statements pertain to the cause of a contract. Which statement refers to motive?

a. It is the essential reason for a contract.

b. It is always known to the contracting parties. c. Its illegality does not affect the validity of the contract.

d. There will be no contract without it.

179. 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.

180. A contract as a general rule must be written to have force and effect as a valid agreement.

A formal or solemn contract is one that must be in writing to be valid.

a. True; True

b. True; False

c. False; False d. False; True

181. One of the following contracts is not vitiated by intimidation or violence and hence, valid. Which is
it?

a. A contract of sale which was signed by a party because his arm was being twisted by a third person.

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.

182. One of the following is not a requisite of an object of contract. Which is it?

a. It must be within the commerce of men.

b. It must not be intransmissible. c. It must be contrary to law, morals, good customs, public order or
public policy.

d. It must be determinate as to its kind or if its quantity is not determinate, it must be possible to
determine the same without the need of a new contract between the parties.

183. If the contract is not in the form provided by law for its validity, the contract is void.

if the contract is not in the form provided by law for its enforceability, the contract, though it has all the
essential requisites for validity, cannot be enforced against the party sought to be charged. a. True; True

b. True; False

c. False; False

d. False; True

184. If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties,
the literal meaning of the stipulations shall control.

If the words appear to be contrary to the evident intention of the parties, the latter shall prevail over the
former. a. True; True
b. True; False

c. False; False

d. False; True

185. In order that fraud may make a contract voidable

a. It may be incidental but both parties should not be in pari delicto

b. It may be serious and the parties must be in pari delicto

c. It may be incidental but should have been employed by both parties d. It should be serious and should
have not been employed by both contracting parties

186. 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 cannot be ratified

d. The defense of illegality of contracts is not available to third persons whose interests are not directly
affected

187. Three of the following contracts are void. Which one is not?

a. A universal partnership of all present property between husband and wife

b. A universal partnership of profits between a man and a woman living together as husband and wife
without the benefit of marriage c. A particular partnership between husband and wife

d. A universal partnership of profits between a private individual and a public officer

188. A stipulation in favor of a third person conferring a clear and deliberate favor upon him and which
stipulation is merely a part of a contract entered into by the parties, neither of whom acted as an agent
of a third person, and which favor can be demanded by third person if duly accepted by him before it
could be revoked. a. Stipulation pour autrui

b. Caveat emptor

c. In pari delicto

d. Pactum commissorium

189. A contract by which one person transfers to another his rights and actions against a third person in
consideration of a price certain in money or its equivalent is:

a. Sale

b. Barter

c. Lease d. Assignment of Credit

190. Simulation of a contract may be absolute or relative. It is relative when:

a. The parties do not intend to be bound at all.

b. The contract is valid. c. The parties conceal their true agreement.

d. The parties conceal their true intentions.

191. The principle by which contracting parties may stipulate any legal or lawful conditions: a. Autonomy
of contracts

b. Relativity of Contracts

c. Mutuality of contracts

d. Freedom to stipulate

192. Which of the following is correct?

a. An action for rescission of contract prescribes in five (5) years counted from the execution of the
contract b. An action to declare contract void is not subject to prescription

c. An action for annulment of contract is imprescriptible

d. An action to enforce judicially a natural obligation prescribes in 4 years

193. The following contracts should observe Statute of Frauds, except:

a. Lease of real property longer than one year

b. Representation as to the credit of a third person c. Lease of personal property longer than one year

d. Guaranty

194. Type of defective contract that creates no rights and impose no obligation, but are susceptible of
ratification.

a. Void contracts

b. Rescissible contracts c. Unenforceable contracts

d. Voidable contracts

195. 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 the Statute of Fraud

196. Lino entered into a contract to sell with Ramon, undertaking to convey to the latter one of the five
lots he owns, without specifying which lot it was, for the price of P1 million. Later, the parties could not
agree which of five lots he owned Lino undertook to sell to Ramon. What is the standing of the contract?

a. Unenforceable.
b. Voidable.

c. Rescissible. d. Void.

197. Michael Fermin, without the authority of Pascual Lacas owner of a car, sold the same car in the
name of Mr. Lacas to Atty. Buko. The contract between Atty. Buko and Mr. Lacas is

a. Void because of the absence of consent from the owner, Mr. Lacas

b. Valid because all the essential requisites of a contract are present c. Unenforceable because Michael
Fermin had no authority but he sold the car in the name of Mr. Lacas, the owner

d. Rescissible because the contract cause lesion to Atty. Buko

198. Anmony advertised in the newspaper his parcel of land wanting to sell the same for P1M. Boy
personally went to the former with cash in hand to buy the subject parcel of land. In this case,

a. Anmony cannot anymore reject Boy as buyer of his land b. Anmony can still reject Boy as an offered in
the purchase of land

c. Anmony can reject the offer of Boy unless he properly consigns with the court his payment for the
land

d. Anmony cannot evade his obligation as seller to Boy

199. Juan sold his parcel of land to Maria for only P1M although its value is P3M. He therefore suffered
lesion due to the inadequacy of the price. The contract is

a. Voidable

b. Unenforceable c. Rescissible

d. Valid