CONTRACTS TEST I - MULTIPLE CHOICE, the letter of your choice. 251 CONTRACTS - DIAGNOSTIC EXERCISES 1L. C po r Select the best answer by writing 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. The stages of a contract according to the order of their occurrence are: a birth, conception and consummation. b. conception, consummation and birth. ¢:. conception, birth arid consummation. d. consummation; conception and birth. The elements of a contract without which a contract would not exist are known as: a. accidental elements. b. natural elements. c. special elements. d. essential elements. 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. consent of the contracting parties, object certain, & cause or consideration and formalities required by law. y . : 5 consent of the contracting parties, object certain, $ Gelivery of the object, and formalities required by law. Scanned with CamScanner252 Dp a) CONTRACTS s the following essential elements: 1 contract has S rar} . ate ‘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. f “a , d. consent: of the contracting parties, object certain, formalities required by delivery of the object, and law. ‘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. Elements that accompany certain contracts unless set aside or suppressed by the parties are known as: natural elements. accidental elements. essential elements. original elements. Boop ip aietans eee hidden defects in a contract of sale. natural element, accidental element. original element, stipulated element. aorp They refer to i ' : oe contract. particular stipulations of the parties'i? * a. Accidental elements Scanned with CamScannerNTRACTS ° 253 10. So PO Op 13. +> 14, 1s. be Natural ¢lements * c Inherent elements a. Essential elements course te following is a natural element of a sales Terms of payment. Rate of interest. Place of delivery. Warranty against eviction. A contract'that can stand by itself is known as: a. accessory contract. b. principal contract. Cc. commutative contract. d. _. gratuitous contract. A contract that does not have any special name under the law is known as: : a. nominate contract. b, innominate contract. c. special contract. d. nominal contract. A contract where both parties are required to do or give something is known as a: a. pilateral contract. b. unilateral contract. — uitous contract. Cc. atl d. orrnmutative contract. it template ‘a real Yt where the parties contem : A ment, ae Squivatent values are given is known fu. - , a commutative contract. °. gratuitous éontract. ‘e onerous contract. a ntract. a aleatory © ‘ arties may establish such stipulations, phe contracting PAT" onditions as they may deem clauses, movided they are not contrary to law, morals, convenient P’ Scanned with CamScannerCONTRACTS 254 i good customs, public order or public policy. This is’ known as the principle of: liberty of contract. mutuality of contract. relativity of contract. i | Boop obligatory force of contract. 16. The contract must bind both contracting parties; its \. validity or compliance cannot be left to the will of one of ‘\ them. This is known as the principle of: * a. mutuality of coritract. b. _. relativity of contract. c. consensuality of contract. a. _ freedom to contract. 17. Contracts take effect only. between the contracting parties, their assigns and heirs, except in cases where the fT) obligations and rights arising from. the contract ‘are not transmissible by their nature, or ‘by stipulation or provision of law. This principle of contract is known as: _@ |. relativity of contract. — : b. mutuality of contract. c. ‘obligatory force of contract. : d. liberty of contract. D borrowed P500,000.00 froth C. D died without having % paid his loan obligation to C. He left S, his son and heir, | f Properties worth P400,000:00. . 8. Sis liable to C for P500,000,00, { b. Sis liable to C for P400,000.00. ¢. Sis liable to C for P100,000.00. d. Sis not ligble at all because he should not be made fo shoulder the obligation of his father. 19.. A contract may be enforced by or against.a third person, > except: ae in the case of sti e ipulation pour autrui : ee ned Person induces another to violate his &: iefbaserot cperacts intended to defraud creditors.” | py igen Oe efit to the third person is merely Scanned with CamScannerCONTRACTS _ 20. 21. 22. 23. +p 255 - The principle that contracts are perfected by mere consent is.known as: a. consistency of contract; b. consensuality of contract, S consummation of contract. mutuality of contract. *: Obligations arising from contracts have the force of law between, the contracting parties and should be complied with in good faith. From perfection, the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their 1 : nature, may be in keeping with good faith, usage and law. This is known as the principle of: a. consummation of contract. ‘b. consensuality of contract: c. obligatory force of contract and compliance in good faith. d. mutuality of contract. One of the following is not a real contract. a. Pledge b. Commodatum c Deposit d. Sale D borrowed P100,000.00 from C. The obligation is secured by a mortgage on D’s land and building C registered the mortgage with the - Register of Deeds. ‘Thereafter, D sold the land and building to X who was not personally aware of the existence of the mortgage at the time of sale since only the Photocopy of the transfer certificate of title which did not yet contain the annotation Of the mortgage was shown to him. It was only when he went to the Register of Deeds to register the sale ‘of the ‘ “land and building to him that he learned of the mortgage. a. C can collect from D and if D cannot pay, C can "foreclose the miortenge, although the land and ildi ow owned by A. ‘ ei eet froth D, but if D cannot pay, C cannot » fetoeloar the mortgage because X was not aware of Scanned with CamScanner256 24. 25. 26. CONTRACTS the existence of the mortgage at the timie he bought lanai and building. Ccanot collect from D. He can only go after the ortgage which was given as security. d. c cannot foreclose the mortgage because X was not a party thereto. c 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 db. Contract, c. Consent d. Cause On June 1, 2015, S offered to sell his only car to B for P100,000.00. B accepted the offer by mailing his letter of acceptance on June 10, 2015. On June 12, 2015, B revoked his previous acceptance and mailed his letter of revocation on the. same date. S received the letter’ of acceptance on June 14; 2015 and the letter of revocation on June 15, 2015, a. The contract was perfected on June 14, 2015 when S received B’s letter of acceptance. b. The contract was not perfected because at the time the acceptance was received, the parties ‘were no longer of one min i *é. The contract was perfected on June 10, 2015 when B sent his letter of acceptance, d. ‘The perfection of the contract retroacte fo June 1. 2015 when the offer was made. On May 1, 2015, § offered to sell a specific car to B for Ee B sent his letter of aco ptante to S on May vehicular a ae May 10, 2015, however, S died’ in @ acceptance on Mey end his secretary received the letter of died) °” May 12, 2015 unaware that S had already 2 eee Was perfected on May 8, 2015 when B S letter of accept, b. The contract w, ‘ptance. was perfected’on May 12, 20]5:when the secretary of § received the letter of acceptance: Scanned with CamScannercONTRACTS 27. 28. 29, 257 The contract was not perfected because the offer of S became in: 5 effective when he died. a. The contract was Perfected on May 1, 2015 because the acceptance made by B on May 8, 2015 retroacts to the date of the offer, Three of the followin . @ instances will render an offer ineffective before ac ‘ceptance is conveved. 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. S offers to sell his car to B for P125,000.00 cash. B accepts the offer but is willing to pay only P120,000.00. a. The contract was perfected at the price of P125,000.00. : b. The contract was perfected at the. price of P120,000.00. pice c. The contract -was perfected at the Price of P122,500.00, the average price of the offer and the acceptance. d. The contract was not perfected because the acceptance by B was qualified and it constituted a counter-offer. inted A as his agent to sell P's only Honda Civic car fe pao 000.00 cea. On November 7, 2015, A, pursuant to the authority granted to him by P, offered to sell the car to B at the price of 400,000.00. B accepted the offer on November 8, 2015 by sending a letter of acceptance to A, which letter of acceptance was received hon November 9, 2015. On November 10, 2015, 4 eictoaed P that B had accepted the offer. ‘The contract was perfected on November 8, 2015 - when B sent his letter of acceptance. contract was perfected on November 9, 2015 2 we aA received the letter of acceptance. mhevoonitrect was perfected on November 10, 2015 c. hen A notified P, the true owner of the car, that B had accepted the offer. Scanned with CamScanner258 30. 31. we) CONTRACTS perfected on November 7, 2015 tract was + The oe by B retroacts to the date of sinca the acceptance the offer. d> on July 1, (2015, Serrano offered to sell his only Mercedes Benz car for P1,000,000.00 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, 2015 to make up his mind. whether to, buy the car or,not. On July 25, 2015, Serrano personally went to Benitez to inform him that he was’ no Jonger willing to sell the can unless the price was increased to P1,400,000.00 because another buyer was interested in buying the car ‘for the said amount of P1,400,000.00. a. Benitez may compet Serrano to sell to him the car for P1,000,000.00. ‘ 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. Rockman and Company published an advertisement in the newspapers which reads as follows “INVITATION TO BID: Construction ‘of the company’s warehouse located at 128 Luzon Street, Sta. Quiteria, Quezon City.” | advertisement also included. the specifications of the thar eet be onstructed: Three companies submitted 5 npae company, with a bid price © Cet DEF Company, P4,750,000.00; and GH capability, rep 00,000.00. After considering the financ! Iced and qecpntation and experience of the bidders, Rockinan wy of materials to be used and other factor: Company ABE company accepted the bid of DE questions th Company, the lowest bidder, 7 Compan: ¢ award: made by Rockman Company t? DEF a The. aera praitted a higher bid 0 DEF Ate e it Scanned with CamScannerCONTRACTS i 32. bs. 86. b 7 b. ABC Com 259 pany should be the winning bidder having submitted the lowest bid. c. The ay ward to DEF Company is valid because Rockman Company w: h lowest bide tPany was not bound to accept the d. The award to DEF Company is void by reason of ‘ockman’s violation of the terms of the invitation to bid. i One of the following is not incapable of giving his consent. a. Insane persons. b. Deaf-mutes who do not know how to write. c. Deaf-mutes who know haw to read. d. » Unemancipated minors, A contract entered into by an incapacitated person is: a. void. b. voidable. c. rescissible. d. unenforceable. Contracts entered into in a state of drunkenness or during hypnotic spell are: a. valid. b. voidable. 7 rescissible, da. void. A contract entered into by an insane person during a lucid interval is: a. valid. bi voidable. c. ' rescissible. a. void. Aside from frau‘ the vices of 60 4 and undue influence, the following are sent, except: a. : violence. | b. intimidation. o mistake. a dealer’s talk. Scanned with CamScanner260 37. Dp 38. 39, oes" Oo Oo“ CONTRACTS Mistake in three of ae following will make a contract voi hich one will not is as to the substance of the thing, which ig é the object of the contract. } ; b. Mistake as to the principal conditions. which principally moved one or both parties to enter int the contract. c. Mistake as to the identity or qualifications ‘of one of the parties, which identity or qualifications fave been the principal cause of the contract: d. Simple mistake of account. It involves the employment of seriot or irresistible force to obtain consent. a. Intimidation. b. . Threat. c Violence. da. Moral coercion. It is present when one of ‘the contracting parties is compelled by a reasonable and well-grounded fear of an unminent and grave evil upon his person or_propetty, or upon the person or property of his spouse, descendants, and ascendants, to give his consent. : a Violence, b. Physical coercion. c. Intimidation, d. Mistake. One of the following contracts is not Witiated by wtimidation or violence, and hence valid. om A contract of sale which was signed by a party because his! arm was bei i y Pnird _ person, . ‘as being twisted by a . A contract of sale whi . S ich ause the other party was entered into bet Scanned with CamScannercONTRACTS 261 d. A contract of donatio; party signed because burn his house. n of a parcel of land which a the other party threatened to It exists when a person take: power over the will of ani reasonable freedom of choi 's improper advantage of his other depriving the latter of a ice. a. Intimidation b. .Duress c. Threat d. Undue influence Fraud exists in three of the following. “Which is the exception? a When through the insidious words or machinations of one of the contracting parties, the ‘other is induced to enter into a contract which, without them, he would not have agreed to. b. When there is a failure to disclose facts, when there is a duty to reveal them, as when the partiés are bound by confidential relations. c. When there is an expression of an opinion by an expert which turned out to be wrong, and the other party relied upon such expert knowledge. 4 d. When the misrepresentation ‘refers to the usual exaggerations in trade, ‘and the other party had an opportunity to know the facts. NN f that his ring was embellished with tose, told ete thal the embellishment was cael glass, tol jho knew that his watch was gold-plated, told Abulencia that it was made of pure gold. _ Banzon, ears that Abulencia’s ring was embellished with believing that Jpulencia, believing that Banzon’s watch emerald, an f pure gold, then entered into a contract was mate cachanged their respective articles. A week ‘whereby they escovered that the ring was adorned only later, Banzo} eet may be annulled at the instance of a ‘The Ce he discovered the fraud. Banzo! ct may be annulled at the instance of b.. ‘The contrac’ 'Banzon also employed fraud. ‘Abulencia since Scanned with CamScanner262 44, 47. » CONTRACTS c. The contract is void because of the bad faith of : both parties; hence, it shall not produce any effect. ; d. Neither party may ask for annulment since both are guilty of fraud. The contract, therefore, ig valid. An absolutely simulated contract is: a. void. b. voidable. c valid. d. unenforceable. 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. Servando and Bernardo entered into a contract where they made it appear that Servando was mortgaging his lot and building to Bernardo to secure a‘contract of loan. ‘The truth, however, was that Servando was selling his lot and building to Bernardo. Which of the followings statements is true? The parties are bound by the contract of sale. The parties are bound by the contract of loan and mortgage, . @ __2he parties are not bound at all, "The parties are bound by the contract of sale only when third Persons are affected. ‘ a aie a ; c aia the following is not a requisite of the object of # . x jauat be within the commerce of men. : itis a right, it must be i issi c. It must not ferF Aa be contrary to law, morals, £004 ‘ustoms, public order or public policy. Scanned with CamScannercONTRACTS 263 ' 48. 50. ob d. ieanugt be determinate as to its kind or capable of ing made determinate without the need of the Parties entering into a new agreement. : S.and B orally entered into a contract whereby S sold his one-year production of eggs in his poultry farm to B for P50,000.00 which amount B immediately gave in cash to S. The contract between. S and B is: a.‘ void because the object was not existing at the time of execution of the contract. b. valid because future things may be the object of contracts. Cc. rescissible because. B -will likely suffer damage if the eggs do not come into existence. d. unenforceable because the contract was not in writing. A died Jeaving properties éstimated at P1,000,000.00 to his sons S and T. Subsequently, S sold one-half of his inheritance to X for P300,000.00, although his share was still to be delivered. m ‘The contract ‘is valid since the inheritance isan a. existing inheritance. The contract is void because’ what S sold is future inheritance which may not be the~object of a contract as a rule. x c. The contract is rescissible. ed The contract is unenforceable. - 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. is the liberality of the benefactor A contract whose cause 1S is: contract or contract of pure a a gratuitous peneficence. b. e remuneratory canta c. an aleatory contract. Scanned with CamScanner264 52. 53. 54. g 2 55. G CONTRACTS d. an onerous contract. S sold his only car for P100,000.00 to B. Unknown to s, B bought the car from him eo that he could use the same in a bank robbery.’ What is the status of the sale of the car by S to B? a. * The sale is void because the motive of B is illegal. b. The sale is valid because the illegality of the motive of the parties to the contract does not have any effect on its validity. c. The sale is voidable because of the failure of B to disclose his motive to S. d. The sale is rescissible at the instance of S because he would be damaged by the illegal motive of B. 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. Z d. It must be clearly stated in the contract. _D and C entered into a contract wherein D agreed to give to C P50,000.00 within 30. days from the date of the execution of their agreement, which, however, does not state the consideration received by D from C. What is the Status of the contract between D and C? a. The contract is void because the cause is not stated in the contract. b, The contract is valid -because the cause is presumed to exist and that it is lawful. c The contract is rescissible because D_ suffered damage by reason of absence of cause. da. The contract is valid provided another contract is executed between D and C to state the cause. The defective cont their defective: defective are: a. tracts arranged according to the degree of ness from the least defective to the most voidable, rescissible, unenforceable, and void contracts, eee Scanned with CamScannerbs, cONTRACTS 56. except: Be op 57. a. G, th fro a: Db. c. e gui m the fishp shad a value The 265 rescissible, uy; contracts” UMforceable, voidable, and void rescissible, voi contracts. voidable, unenforceable, and void unenforcea faa contracts. ible, rescissible, voitable, and void The following are characteristics of rescissible contracts, they may be’set aside for equitable reasons. they are Valid until rescinded: the action to rescind them prescribes. the action to rescind them are_not available to third persons ever if their interests are directly affected. The following contracts are rescissible, except: Those entered into by guardians whenever the ‘wards whom they represent suffer lesion by more than one-fourth of the value of the things which are the object of the contract. Those entered into in representation of absentees, if the latter suffer lesion by more than one-fourth arthe value of the things which are the object of act. ° the contndertaken in fraud of creditors but the latter can still collect the claims due them through other Means. 4 things under litigation if they entered into by the defendant without have bow dge and approval of the litigants or of Gompetent judicial authority: sold the fish harvested ardian ©) inor, mY fish, however, ond yf fM, a 400.00. The of M for P7/ 0: . D. pecause M suffered lesion by sible rene value of the fish sold. of tise M is a minor. forceable because G sold the. fish oval of the courts: of P10 gale is rescl .e- Scanned with CamScanner266 59. 60. 61. 62, CONTRACTS The sale is void because the object is outside the 4 commerce of men. ‘The following are the requisites of'a rescissible payment, ept: na . the debt is already due. b. the debtor is insolvent. o: the debtor pays the debt. d. the payment is not yet due- Rescission: of. contract. will . prosper in. one of the following cases. Which is it? a. When there: are other’ .legal means ‘to -obtain _ reparation of the damages caused. b. When he who demands rescission cannot return whatever he may be obliged to restore. . c When the object ofthe contract is. in the possession of a.third person who purchased the property of the debtor in bad faith.» d. When the action to bring rescission has prescribed. D owes ‘the: followir.g creditors: _X,. P50,000.00; Y, P60,000.00; and ’Z, P90,000.00. He has assets valued at 400,000.00: :. Subsequently;.D. donated, among his assets, a parcel of land valued at P250,000.000 to C. The’ donation and acceptance .were made’ in a public instrument. The donation of the land made by D to Cis: e rescissible, because it was presumed to have been made in fraud of creditors. b. unenforceable, becaise D was’ not authorized by; his creditors. ‘ id | c, void, because the donation. and-acceptance should | 7 be registered. sacoaal . voidable, because D does not have the free disp of his property. | aed @ complaint in. court against D to collect 4 money court romaine to P500,000.00. After due nee rendition red Judgment in favor of C.. Shortly % a4 p's of the judgment and before C has collects, ) debs “bt, D sold a parcel of land to X. Z, another Scanned with CamScannercoNTRACTS 63. 64. 267 learned of the sale made by D to X and now files an action to rescind the sale. ~ a ‘The right to rescind the sale is exclusively granted to Z because it was he who first learned of the sale and he has still to file a claim to collect D’s debt. The right-to rescind the sale is exclusively granted to C because it was he who obtained a favorable judgment and he has ‘not yet collected D’s debt. Both C and Z have a right to rescind the sale since the sale is presumed in fraud of creditors having been made by party against whom judgment has been rendered. d. Neither C nor Z has a right to rescind the sale. R, the representative of A, an absentee, sold the corn with a value of P30,000.00. and the .palay with a value of P50,000.00, harvested from A’s agricultural farm for a total price -of-P50,000.00. . A, whose domicile was subsequently known, was informed of the sale made by G. Based on the foregoing facts, which of the following statements is incorrect? a. A may seck payment of an additional P30,000.00 to recover the damages suffered. : b. A may just seck rescission of the sale of the corn to recover the damages he suffered ce ‘A may seek rescission of the sale of part of the com 5 and part of the rice to the extent of the damage’ he sustained. : a. ‘A may seek the rescission ‘of the total sale to recover the damages he suffered. ‘The following contracts are voidable, except: a. contracts entered into during a state of drunkenness or hypnotic spell. contracis entered into during 4 lucid interval. c, contracts where one of the parties is incapable of iving consent. RG d. eats where the consent of one party is vitiated : by violence, intimidation, mistake, fraud or undue influence. ae EE Ee ee Scanned with CamScanner268 65. 66. 67. CONTRACTS The action for annulment. must be brought within four Which of the following is false with respect to the ears. seckoning of the beginning of the prescriptive period? a. In cases of intimidation, violence and undye 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: One of the following statements concerning ratification of avoidable contract is false. Which is it? Ratification extinguishes the action to annul a a. voidable contract. b. Ratification cleanses the contract from all its defects from the moment it was constituted. c Ratification requires the conformity of the party who: has no right to bring the action for annulment. d. Ratification may be made by the guardian of the itated person incapacitated person, or the incapac upon attaining capacity, or the consent was vitiated. party whose 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. ce The guardian, during the ward’s incapacity. d. The party who is capable of entering into a contract. ‘ S, an employee of a private company, sold his car {ot 17 years ol P100,000.00 to B, whom he knew was only S delivered the car to B who immediately paid the amowt of P100,000.00. Later, S was transferred to ancth branch of his employer which was quite a distance from his residence. He wanted to get back the car from Scanned with CamScannerCONTRACTS 70. 71, d 269 that will have something to use in going to and from his new office, Neither B nor his guardian has registered the sale with the Land ‘Transportation Office. a. S can file an action to annul the sale he made to B because he was mistaken in selling the car which ‘ he realized he badly needed. S can ask the court to annul the sale because B Was a minor when the contract of sale was entered into and it ha: s not yet been recorded with the Land ‘Transportation Office. Only B, when he attains the guardian, while B is still a action to annul the contract. The minority of B has no effect on the validity of the contract since the parties entered into the contract of sale freely. age of majority, or his minor, can bring an The following contracts are unenforceable, except: a. those entered into by one who has no authority or legal representation. : b. those that do not comply with the Statute of Frauds. ce. those where both parties are iricapable of giving consent to a contract. a. those where the consent of a party is vitiated by violence, intimidation, mistake, fraud or undue influence. 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. Gale of movables at a price of not less than a A ceprerentadion 08 to the credit of a thint person. An agreement made in consideration of marriage other than mutual promise to marry. \ : qd An agreement for the leasing for a longer period ‘than one year of a personal property, lies only to. tute of Frauds app! oo Stately executed contracts. Scanned with CamScanner270 73, % CONTRACTS contracts wholly or partially executed on the part b. of the debtor. c contracts wholly or partially executed on the part of the creditor. i d. wholly executory contracts. Severino, orally sold a one-square meter lot for P475.00 to Benedicto, chairman of Barangay Mapayapa, 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 P500.00. 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. On June 1, 2014, Mother Lilac, a movie producer, mt Claudine Santos, a movie actress at the lobby of the Manila Hotel, Mother Lilac informed Claudine Santos thet she was producing ‘a movie the filming of which Wo! start on August 1, 2015 and that she. was offering Claudine Santos the starring role. for a fe 4 P2,000,000.00. Claudine Santos accepted the offer até shook hands with Mother Lilac to seal their agreemer P00 003 Mother Lilac gave Claudine Santos 4 check ae as initial payment., On August 1], fe m her Lilac called Claudine Saritos for the shooting of e lovie but Claudine Santos refused to hgnot agreement sayi ‘ ing i writing, saying that it was not enforceable, not bei" Scanned with CamScannerCONTRACTS 74, D was driving on his way ‘S when he suffered a busted tire. Not having any spare tire, he went to a nearby car spare tire. However, he did not have 271 Mother Lilac cannot enforce the contract against Claudine Santos because it was entered into orally. Mother Lilac can enforce the contract against Claudine Santos because Claudine Santos had accepted benefits under the contract. Claudine: Santos may just return the payment because it was made in check which is not legal. tender. Claudine Santos is not bound under her agreement with Mother Lilac because she did not sign any writing. to Manila from thé province parts store to buy a new sufficient money with him so he phoned G, his friend, who happened to know S, the store owner. G then instructed D to give to S the telephone through which G told S “Don't worry. If D cannot pay, just charge me.” D. was thus able to buy a new tire for P6,000.00 for which S$ issued D a sales invoice. a. b. If D cannot pay, S can proceed against G to make good his promise to pay D’s debt. G's promise cannot be enforced against him because he did not execute any writing for the guaranty he made. | . ‘S can enforce G’s promise to answer for D’s debt since the guaranty was witnessed by D, S can enforce G’s promise because there was a writing of some kind, the invoice for the sale of the tire. 3, 17 1/2 years old, orally sold his bieycte 75, A month agp BO Polen nib wanToniglie vac jor P2,000. the mother of S, learned about the sale by $ of his old. M, at S give her the amount he C dicycte, end demandet al piobeeda of the sale to his received. 5S, ent the same for the family’s daily mother whe Sire father of B, also learned about the expenses. me of the bicycle when he saw it parked at purchase be d began using it almost daily since B bought their door Scanned with CamScanner~ 6. 77. 78, G CONTRACTS it, Based on the foregoing facts, what is now the status of the sale entered into between S and B? a. b. c. d. ‘Unenforceable because both parties were incapacitated to enter into the contract. Unenforceable because the sale was not in writing. Validated from inception because of the subsequent acts of the parent of the parties. Voidable because while B was only 16 years old, S was nearing the age of majority which is 18 years. The following contracts are void or inexistent, except: those whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy. those which are absolutely simulated or fictitious. those whose cause or object did-not exist at the time of the transaction. those where one of the parties employed fraud to obtain the consent of the other, The following contracts are void or inexistent, except: those whose object is outside the commerce of 1a men. b. those which contemplate an impossible service. c. those where the intention of the parties relative to the principal object of the contract cannot ascertained. i a those where one of the parties is, guilty. of fraud J" performing his obligation. The following are characteristics ‘of void or inexistent contracts, except: a. the right to set up the defense of illegality cane be waived. B the action or defense for the declaration of the : inexistence of a contract does not prescribe. f - avoid contract can be ratified by the acceptance? d benefits under it by one or both of the parties: bie : vail the defense of illegality of contracts is not &¥ to third persons whose i: re not di interests di affected, rests al rect Scanned with CamScannerCONTRACTS 273 79, If the illegal contract between the parties is a criminal offense and both parties are guilty (in pari delicto), such D illegal contract shall produce the following effects, except: a. the parties shall have no right of action against each other. - both parties shall be criminally prosecuted. the effects and instruments of the crime will be confiscated in favor of the government. d. the parties may recover not illegal in itself, b. ce what they have given if it is 80. If the illegal contract b: tween the parties is a criminal offense but only one pa: rty is guilty, such illegal contract {)__ Shall produce the following effects, except: a. _ the guilty party will be criminally prosecuted, b. _ neither party may 'y compel the other to comply with his undertaking. the instruments shall be confiscated in favor of the government. the innocent party cannot recover what he has given. c. d. 81. If the contract is illegal but it does not constitute a criminal offense and only one party is guilty, such illegal 1D 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. ¢, the innocent party cannot be compelled to comply ith his promise. 4, the innocent party cannot demand the return of what he has given. i ntracts are required to appear in a public Sate eRe ‘the convenience of the parties 80 that they pte nagieae tered into the proper recording office, except: 2 ate soetracts which have for their object the creation a Gf real rights over immovable property. the acceptance of an inheritance inister property. . the power to eUtions or rights proceeding from an ed ii ic document. ing in a public act appearing in aos Scanned with CamScanner74 CONTRACTS, ' 83. Reformation of instruments has the following requisites, except: ; | Dp a. there must be a meeting of 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. 84. Reformation of an instrument is available in the following } cases, except: ? Y tia: when a mutual mistake of the parties causes the failure of the instrument’ to disclose — their agreement. b. when one party was mistaken and the other party acted’ fraudulently or inequitably in such a way that the instrument dees not show their true intention. ce. 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. 85. Reformation is not available in the following cases, except a. simple donations inter vivos wherein no condition D is imposed. * b. wills. c. when the real agreement is void. ill, d. when through’ the ignorance, lack of skill negligence or bad faith on the part of the persor drafting the instrument or of the clerk or typist the instrument does not express the intention © the parties. 86. As a rule, a, contract of sale is perfected: Jaw Gs upon compliance with the requirements of the 1" as to form, upon delivery of the object of the contract. Scanned with CamScannercoONTRACTS 275 c. upon the meeting of the minds'on the thing which is the object of the contract and upon the price. d. upon demand. With the intention of raising money to buy a gun which he would use in killing X, his mortal enemy, S sold his only C car. for P100,000.00 cash to B whe wee, nothing of the intention of $ in selling the car. After the sale, 8 was able to buy a gun complete with all the papers required by law. B, 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 S to'B is valid provided S does not kill X. b, The sale of the car by S to B is void if S kills X. ce. The sale of the car by S to B is valid whether § kills X or not. a. The sale of the car by S to B is void whether S$ kilis X or not. 88. Six years ago, Marcelo, 17 years old, sold his one*hectare agricultural lot to Bernardo for. 100,000.00. Marccle © 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 Bernardo which had been enjoying bumper crops since Bernardo bought it from hin Marcelo now approaches you to seek your help on whether it would still be possible to annul the _sale of the agricultural Jot to Bernardo. What advice will you give to 5 meaner ot Marcelo may annul the sale on the ground of is i ity. i a SS el ch Gnd SMa na my al the sn Neither ound of Marcelo's incapacity. on the Brcelo and Bernardo may annul the saleon poe ound of Marcelo’s incapacity. c. 89, A contract of sale is not a: a. principal contract, D b. nominate contract. Scanned with CamScanner276 90. CONTRACTS © consensual contract. d. real contract. Gregorio, _ a wealthy businessman, had often paid the debts of Demetrio, his younger brother, in. order to maintain the family’s good name. One day, Gregorio received a text message in his cell phone from Bernardo, a banker, informing Gregorio that Demetrio had obtained a loan from the bank but had fallen behind in his payments. Gregorio texted back as follows: “Don’t worry. If he doesn’t pay in three months, I will be the one to pay.” No other information was contained in the body of the text message. After three months, Bernardo sent again a text message to Gregorio to inform him that Demetrio had not made any payments and that Bernardo was demanding payment from Gregorio on account of the. promise he had miade three months before. ; a. Bernardo may enforce payment against Gregorio on account of his promise since he had been paying off the other debts of Demetrio. b. Bernardo may not demand payment from Gregorio because Gregorio’s promise is unenforceable. c. Bernardo may enforce payment against Gregorio as long as Bernardo did not erase in his cell phone the text message he received from Gregorio which is written evidence of Gregorio’s promise. . d. Bernardo may enforce payment from Gregor? because as a wealthy businessman, Grego!? should protect his name and that of his family. Perfecto offered to sell his house and lot to Reynaldo for 77500,000.00. Perfecto told Reynaldo that he was giving ty ralde thirty (30) days to decide whether to buy oF nok a avers and lot. Reynaldo accepted the option but did him hes ing to Perfecto to support the option given '° who was enty days later, Perfecto found another buyer P2,000,000,06" B.,t°, UY the house and lot [ still withdra Perfecto wants to ask you whether he ca? a! venae the offer he made to Reynaldo. Decide. stand erfecto may withdraw the offer because Me S to gain an added profit of P500,000.00 4 Scanned with CamScannerCONTRACTS 92. 8 93. B 277 this will be more than enough to pay any damages to Reynaldo. b. Yes, Perfecto may withdraw ‘the offer by just informing Reynaldo of such fact. ce. No, Perfecto may not withdraw the offer because the option was accepted by Reynaldo although a Reynaldo did not give anything in support thereof. No, Perfecto may not withdraw his offer until the lapse of the period given to.Reynaldo to exercise his option. D insured his house against fire with C Insurance Company. The insurance policy which was prepared and printed by C Insurance Company was signed by D after reading its terms. You are to determine which of the following characterize the contract between D and C Insurance Company. : I. Auto-contract. I. Contract of adhesion. TIL. ‘Aleatory contract. Iv. Nominate contract. ‘The contract between D and C Insurance Company is: a. I, Mand Ill. b. ‘I, Il and Iv. c. 1, Mand Iv. d., 1, Mand Iv. : i Cortez a loan of P50,000.00 which pales ppt tothe. Datiles failed to pay the debt on was payab © '¢ despite repeated demands from Cortez. the due ae was still outstanding after 6 mionths, When tne i nis counsel, Atty. Antolin, to write a letter to Cortez asked his ¢ payment within one (1) week and with a Datiles to comrt_action if no payment was not received threat of baa eriod. Datiles, afraid of the threat of a within the salt Tnot him, was constrained to sign a deed court action etn favor of Cortez to pay his debt. assigning Pie eid of assignment is voidable because of linia ee ea enorceabe, b. The deed o} threat of a court action made by Cortez the thre 2 Scanned with CamScanner94. 95. w Contracts through his lawyer being a legitimate exercise of his right. : ‘The deed of assignment is voidable because of the ©. undue influence exerted by Atty. Antolin, the counsel of Cortez, on. Datiles. d. The deed of assignment is void because Datiles did ~ not give his consent voluntarily. an of P100,000.00 from C. The loan agreement showed that the loan was payable within one year with interest at 6% per annum. However, there was no provision saying that the rights and obligations of the parties would be transmitted to their heirs or successors- in-interest. Before maturity, C died leaving his son S as heir. Which of the following ‘statements is correct? S cannot collect from D because no mention was dit right would D obtained a loi a. * made in the agreement that the cre be transmitted to the heirs of C. : : i b. § can collect from D although no mention was made in the agreement that the credit right would be transmitted to the heirs. . c $-cannot collect from D because the credit right is personal to C. im d. S cannot collect from D because the law prohibits the transmission of credit rights. W, a woman, agreed to live with H, a man, as the wile of n-exchange for th H without the benefit of marriage i monthly support of P10,000.00 that H would give : Both H and W are single, of legal age, i impediment for them to get married. Their pa objections to the two getting married. Based 0” foregoing information, which of the following statements * true? a. ane agreement between H and W is valid becaus? they can legally get married if they want l0- i b. The agreement between H and W is void for ae : contrary to morals. nis ; H my legally demand that W live with him 4° " vile, ne monthly d. W may legally demand that H give her t support of P1Q,000.00 that he had promised- Scanned with CamScannerCONTRACTS 96. b 97. 99. 8 279 Angel dela Guardia, guardian of Eduardo Menor, a minor, sold the palay harvested from the land belonging to Eduardo Menor for P42;000.00, The palay had a value of PS0,000.00. At the: time of the sale seven months 2go, Eduardo was 17 % years old. Eduardo wants to recover the damages he suffered under the contract entered into by his guardian. What is the remedy available to Eduardo Menor? a. Annulment because Eduardo Menor was only 17 % years old at the time.the sale was made by Angel dela Guardia. b. Rescission because Eduardo Menor suffered lesion of P8,000.00. c. Both rescission and ‘annulment. d. Neither rescission or annulment. Which of the following contracts is rescissible? a. Contracts entered into during a hypnotic spell. b. Contracts entered into in a state of drunkenness. c. Contracts enteted into to defraud creditors when the latter cannot collect the claims due them. d. Contracts where both parties are incapable of giving consent. A, a duly authorized agent of P, wrote a letter to B on August 1, 2015 offering to sell .P’s only Mercedes Benz car for P200,000.00 cash. . On August 3, 2015, B wrote'a letter to A stating that he was accepting all the terms.of the offer; which letter was received by A on August 5, 2015, Before A could relay such acceptance to P, P died in i ident on August 6, 2015. aoe contract wes not perfected because P, the real : party to the sale, died before the acceptance came to his knowledge. fected on August 1, 2015, ‘The contract was perfecte 2 The contract was perfected on August 3, 2015. | The contract was perfected on August 5, 2015. ‘The cause of a contract differs from the motive of each fe in that motive: to the contract in ao is an essential element of a contract. Scanned with CamScanner280 100. Wy 101. Ww 102. CONTRACTS although illegal, does not affect the validity of the b. contract. 2 isalways known by the other party: S _- when illegal will render the contract void. a certain church whose members include Pis a minister of xX. X regularly confides in P because of his many personal problems. P is interested in. buying the lot of X and uses his position as elder of the church and confidant of X to convince X to sell to him the Jot. Should X sell the lot to P by reason of P taking advantage of his confidential relationship with X, the contract ‘petween them would likely be voidable because of: a. ~jntimidation. b. undue influence. c. fraud. d. mistake. M, a movie actor’ who has féthered many children BY donated a house and lot to X believing The deed of different women, that the latter was his illegitimate son. i ic instrument donation and its acceptance were in @ publi ee and a new certificate of title to the house, and lot St issued in the name of X. is son but that movie actor. M now wan a. M may no longer annul the contract sritle requisites have been complied with an ew already issued in the name of X. d of b. M may annul the contract on the grown mistake as to the ider.tity of X- . ait G M may not annul the tract put he can rescind ! because he suffered damages. have d. M need not annul the contract but he can declared void ab initio. which $1014 lated bar nt the thing contract S convinced B to buy a gold-p! was made of pure gold. B boug! it was really made of pure gold. The and Bis: a. valid. b. voidable. Scanned with CamScannerCONTRACTS 103. 104, lds, B was his illegitimate son by a 281 c. Tescissible, d. void. D went to the store of C and asked the latter to sell to him construction materials on credit. Since C did not know him, he denied D’s request. R, a rich businessman in the community, happened to.be at the store at that time and overheard the conversation. He told C, “I personally know D. He has a good credit reputation.” Accordingly, C granted credit sale to D. The sale was evidenced by an invoice issued by C. Later, however, C could not collect from D because it turned out that, the representation made by R as to the credit of D was false. a, C can go after R for damages by reason of the latter’s misrepresentation. b. C cannot go after R for damages because R's representation was not in writing, c. C can go after R because there was a sales invoice ‘evidencing the sale. d. — C can go after R because it was R’s representation that induced him to grant a credit sale to D. The form of the representation is immaterial. On June 1, 2015, S and B entered into an oral contract of sale whereby S sold his computer to B for PS0,000.00, The parties agreed that S shall deliver the computer to B on June 10, 2015 at the place of B. B, however, is required to pay the price upon agreement. B complied with his obligation by paying the price to B in cash on June 1, 2015. As of June 1, 2015 - a. ‘The contract of sale between S and B is wholly . utory. i b. The. contract of sale between S and B is wholly : ited. i The contract of sale between S and B is partly c. executed. i iting before i * sale should be in writing before it d. ‘The So aiemined whether it is executed’ or. can i executory. boy from S. B knew that thé baby boy B bought a baby woman, named; W, and Scanned with CamScanner282 106. A 107. 109, CONTRACTS which W sold to S. The contract between B and $ is: a. valid. b. void. c unenforceable. d. voidable. 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. ‘The cause of the contract in Number 106 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. Which of the following contracts is valid, enforceable a would not require any further act for the convenienc® : the parties other than its registration with the prope! government cffice? agent a Oral sale of a piece of land made through an 48% whose authority is in a public instrument. t made b. Sale of a piece of land in a public instrumen! given or through an agent whose authority was by the principal. te instrt nest c. Sale of a piece of land in a private b's. in made through an. agent whose authority public instrument. nt made d. Sale of a piece of land in a public instrume) ublic through an agent whose autharity 16 in instrument. : jes $ sold his only horse to B for P30,000.00. 7 we the agreed that S shall deliver the horse one We red 10 execution of their agreement. B, however» ant: e place Pay the price immediately in certified check: Scanned with CamScanner