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BUSINESS LAW TESTBANKS / REVIEWERS On September 21, 2010, Piolo agreed to sell his only carabao to Sam and Sam agreed to pay the price of P25,000 if Sam will pass the October 2010 CPA Examination. The list of successful examinees was released on October 21, 2010 and Sam is one of those who passed th...

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BUSINESS LAW TESTBANKS / REVIEWERS

1. On September 21, 2010, Piolo agreed to sell his only carabao to Sam and Sam agreed to pay the price of P25,000 if Sam will pass the October 2010 CPA Examination. The list of successful examinees was released on October 21, 2010 and Sam is one of those who passed the examination. As a result, a. Piolo is entitled to the P25,000 price plus interest beginning September 21, 2010. b. Sam is entitled to the carabao and its fruits beginning September 21, 2010. c. Sam is entitled to the carabao beginning September 21, 2010 and to its fruits beginning October 21, 2010. d. Piolo shall deliver the fruits of the carabao and Sam shall pay the interest on the price beginning September 21, 2010. 2. The following are elements of an obligation, except a. Active and passive subjects b. Efficient cause c. Prescription d. Vinculum 3. A, B, and C owe W, X, Y, and Z the sum of P120,000. If the obligation is due, which of the following is not correct? a. A is liable only for a total of P40,000. b. W can only collect P10,000 from C c. B can be required to pay P40,000 to any of the creditors d. Y can only collect a total of P30,000 4. The following pertains to facultative obligations, except: a. Comprehends only one object or prestation which is due b. Choice pertains only to the debtor c. Fortuitous loss of all prestations will extinguish the obligation d. Not given. 1

5. An obligation subject to the happening of a future and certain event is a. Conditional obligation b. Suspensive conditional obligation c. Resolutory conditional obligation d. Obligation with a period 6. S1: The debtor shall lose the right to make use of the period when he does not furnish any guaranty or security to the creditor. S2: In an obligation subject to a suspensive period, what is suspended is birth of the obligation. c. false;false a. True;true b. true;false d. false;true 7. Which of the following is not a generic obligation? a. Obligation to pay P1,000,000 b. Obligation to deliver 1999 Nissan Sentra Series III c. Obligation to deliver 50 cavans of rice d. Obligation to give a delimited generic object 8. “I will give you my car provided that if I like to have it back, you will return the same to me.” a. The obligation is void, because the fulfillment depends upon the will of the debtor. b. The obligation is void, because the fulfillment depends upon the will of the creditor. c. The obligation is valid because the condition merely causes the loss of rights already acquired. d. Both A and B. 9. S1: Dog obliged himself to give Cat a specific car tomorrow. If Dog failed to deliver tomorrow after demand is made, Cat may compel Dog to do his obligation and may ask for damages. 2

S2: Darna obliged to deliver a car to Captain Barbel tomorrow. If Darna failed to deliver tomorrow after demand is made, Captain Barbel’s right is to ask a third person to deliver a car to him at the expense of Darna plus damages. a. Both statements are true. b. Both statements are false. c. Statement 1 is true while statement 2 is false. d. Statement 1 is false while statement 1 is true. 10. a. b. c. d.

Which of the following is not a conditional obligation? D to give C P1,000 if C passes the examination. D to pay C P1,000 if he has the means. D to give C a horse if C marries X. D is to use C’s car until C returns from Davao.

11. It is the voluntary administration of the property of another without his consent. c. Quasi-delict a. Negotiorum Gestio b. Solutio Indebiti d. Contract 12. A, B and C are solidary debtors of X and Y, solidary creditors, for P60,000. X makes a demand to A but the latter paid Y. In here, the obligation is not extinguished. A and B solidary debtors of X, Y and Z, solidary creditors. X demands payment from A, but B, upon whom no demand is made paid Z the entire obligation. In here, the obligation is totally extinguished. a. True;true b. true;false c. false;false d. false;true 13. Elmo is obliged to give Bert, either a ring worth P5,000; or bracelet worth P4,500; or a watch worth P4,000. All the objects were lost due to Elmo’s fault in the order stated. a. Elmo’s obligation is extinguished. 3

b. Elmo’s obligation is to pay the value of the ring plus damages. c. Bert’s right is to demand the value of any of the objects plus damages. d. Elmo’s obligation is to pay the value of the watch plus damages. 14. Culpa aquiliana as distinguished from culpa contractual: a. Proof of due diligence in the selection and supervision of employees is not considered a defense. b. Proof of the contract and its breach is sufficient to warrant recovery. c. The negligence of the defendant is only an incident in the performance of the obligation. d. The source of liability is the negligent act of the person causing damage to another. 15. S1: When one of the parties has brought an action to enforce the contract, he cannot subsequently ask for its reformation. S2: The injured party may seek rescission even after he has chosen the fulfillment of the obligation if the latter should become impossible. a. True; true b. true;false c. false;false d. false;true 16. S1: An oral sale of land made by its owner is unenforceable. S2: Sale of land made by an agent without written authority from owner thereof is void. c. true;true a. False;false b. false;true d. true;false

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17. S1:The principle of autonomy of contracts means that the contracting parties as a rule may agree upon any stipulation, clause, term and condition. S2: Relativity of contracts means that contracts take effect not only between the parties but also their heirs and assigns. b. true;true c. false;true a. False;false d. true;false 18. It is an obligation which is based on positive law and gives right to enforce its performance a. Natural obligation c. Moral obligation d. legal obligation b. Civil obligation

19. Which of the following is demand necessary to make the debtor in delay in the performance of his obligation? a. When the time of performance is of the essence b. When the time of performance has been stipulated c. When the law so provides d. When demand would be useless 20. Liability for damages in the performance of an obligation arises from the following, except a. Negligence c. Delay b. Acts or omissions punished by law d. Fraud 21. Liability for damages arising from fraud is demandable and there can be a waiver of an action for past fraud. There can be a waiver of an action for future negligence but not fraud. a. Both statements are false c. First is true, second is false d. Second is true, first is b. Both are true false 5

22. Delia borrowed from Celia a sum of money with a stipulated rate of interest to be paid in three equal monthly installments from January to March. Delia paid an amount for which the latter issue a receipt stating that the payment is for the month of February. In this case, a. The installment for the month of March is also considered paid. b. The installment for the month of January is conclusively presumed to have been paid. c. The installment for the month of January is distributably presumed paid. d. The installment for the month of January is not presumed paid. 23. A obliged himself to deliver the cans of powdered milk of B from his warehouse in Pangasinan to Manila. While his truck was traveling on the North expressway, it was hi-jacked by a band of robber who also took the cans of milk belonging to B. Is A liable for the loss of the goods? a. No, because they were generic things and as they cannot be lost. b. Yes, because he was in possession of the same at the time of the loss and therefore presumed at fault. c. Yes, because there was no stipulation exempting him from loss in case of fortuitous event. d. No, because the loss was due to fortuitous event. 24. A, B and C bound themselves to deliver to X a specific car worth P3M. Due to the fault of A, the car was lost. In this case a. X can claim damages from any one of the three for his proportionate part of liability because the obligation is indivisible. b. X can claim only from A the whole amount of damages other than the value of the car. 6

c. Since it is solidary liabilities for damages, X can claim the same from any of the three. d. Only A is liable for damages although B and C are liable for their respective shares in the obligation. 25. Dennis owes Cart P1M. Xanabelle, without the knowledge or against the will of Dennis paid Cart P2M. Can Xanabelle get reimbursement from Dennis? a. P2M by way of reimbursement from Dennis to prevent unjust enrichment on the part of Dennis at the expense of Xanabelle. b. P1M only for that is the extent of benefit of Dennis. c. No reimbursement because the payment was not proper being without the knowledge or against the will of Dennis. d. P1M plus interest from the time of payment until reimbursement. 26. Payment made by a third person is valid to extinguish the obligation of the debtor to the creditor in the following cases, except a. After payment to the creditor, the third person acquires the creditor’s right b. When the creditor ratifies the payment to the third person c. When through the creditor’s conduct, the debtor was led to believe that the third person had authority to receive payment d. When the third person is subrogated to the rights of the creditor. 27. Sister offered his car to Brother for P1M and giving the latter one week to decide. Brother in turn gave Sister P1,000. In this case, there is a. Contract of sale of the car with the P1,000 as earnest money b. Contract of option with the P1,000 as option money c. Contract to sell of the car at B’s option 7

d. Contract to sell of the car at S’s option 28. 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 29. 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 30. A defective contract where damage or lesion is essential is a. Rescissible c. Unenforceable b. Voidable d. Void 31. 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 c. Void b. Voidable d. Rescissible 32. The following even if not in public instrument are valid, binding and enforceable except a. Negotiable instruments 8

b. Sale of land, either by the owner or agent with written authority c. Agency, pledge, mortgage d. Partnership contract wherein immovables are contributed 33. Aguilar sold to Beddie his dog with the agreement that delivery shall be after one week from sale and the payment of the price after two weeks from delivery. If the dog shall produce offspring, it shall belong to: a. If produced before the sale, it shall pertain to the seller b. If the puppy shall exist before the actual delivery, it shall pertain to the seller c. The fruits that shall exist after delivery will only be the ones to pertain to the buyer d. The fruits after the sale but before delivery shall pertain to the buyer if so stipulated by the parties to the sale 34. A sold B’s car in B’s name to C without any authority from B. The contract of sale is a. Rescissible b. Voidable c. Unenforceable d. Void 35. With written authority from his principal, the agent sold verbally the land of the principal. The sale is a. Rescissible b. voidable c. unenforceabled. Void 36. A, as agent of P with oral authority, sold P’s land in public instrument. The sale is a. Rescissible b. voidable c. unenforceabled. Void 37. A, agent of P, in excess of authority, entered into a contract in the name of P with X who knew of the lack of authority and P did not ratify the contract. The contract is 9

a. Rescissible b. voidable unenforceabled. Void

c.

38. S sold his car to B. No agreement was made on the time and place of delivery and payment. Hence a. The time and place of delivery shall be at the time and place of payment of the price b. The time and place of delivery and payment not having been agreed upon, the sale shall be void c. The seller may demand payment first before delivery of the thing sold d. The buyer may demand delivery first before payment 39. A owes B P20,000 which became due and payable last June 23, 2010. On that date, A offered B P10,000, the only money he then had, but B refused to accept the payment. A, thereafter met C, B’s 23 year old son, to whom he gave the P10,000 with the request that he turn the money over to B. The money was stolen while C’s possession. How much may B still recover from A? a. P20,000 c. P15,000 b. P10,000 d. P -040. If a third person pays an obligation. What are the rights, which are available to him if he pays the obligation with the knowledge and consent of the debtor? 1st answer – He can recover from the debtor the entire amount, which he has paid. 2nd answer – He subrogated to all of the rights of the creditor. c. Only the first is a. Both answers are correct. correct. b. Both answers are wrong. d. Only the second is correct. 41. 10

Indivisibility as distinguished from solidarity.

a. Plurality of subject is indivisible. b. When the obligation is converted into one of indemnity for damages because of breach, the character of the obligation remains. c. Refers to the legal tie or vinculum. d. Refers to the prestation which constitutes the object of the obligation. 42. a. b. c. d.

Demand is not needed to put the debtor in default, except When demand would be useless When the parties so stipulate When the time is of the essence When the fixing of the time is the controlling motive for the establishment of the contract

43. Culpa aquiliana as distinguished from culpa contractual a. Proof of due diligence in the selection and supervision of employees is not available as a defense b. Proof of the contract and of its breach is sufficient prima facie to warrant recovery c. The negligence of the defendant is merely an incident in the performance of the obligation d. The source of liability is the defendant’s negligent act or omission itself 44. A passenger on a truck was hurt but in a criminal case against the driver, said driver was acquitted. The victim now sues the owner of the truck for culpa contractual. May the suit still prosper? a. No, this will constitute double jeopardy b. No, the acquittal means that the guilt of the accused was not proven by proof beyond reasonable doubt c. Yes, it is sufficient for him to prove the existence of the contract of carriage and the injuries suffered d. Yes, provided he can prove the negligence of the driver 11

45. If the obligor binds himself to perform his obligation “ as soon as he shall have obtained a loan” from a certain bank. This obligation is a. With a term c. with a period d. with a resolutory b. With a suspensive condition condition 46. An action to impugn the acts of a debtor intended to defraud the creditor is a. Accion reivindicatoria c. accion redhibitoria b. Accion subrogatoria d. accion pauliana 47. A owes B P11,000 due on July 2, 2010. B owes A P6,000 due on July 3, 2010 and P4,000 due on July 10, 2010. B owes C P11,000 due on July 3, 2010. On July 2, 2010 B cannot pay C so B assigns to C her credit of P11,000 against A, without the knowledge of A. On July 10, 2010 C tries to collect from A the P11,000. How much can C compel A to pay? a. P11,000 c. P5,000 b. P9,000 d. P1,000 48. If the obligation of the debtor is “I will pay you my debt after I have arrived from abroad.” The obligation is a. Valid c. voidable b. Void d. unenforceable 49. There is novation of the obligation if 1. The period for payment is shortened from 5 years to 3 years. 2. The period for payment is extended form 3 years to 5 years. a. True; true b. true;false c. false;true d. false;false 50. 12

This is a real defense

a. Fraud is inducement an incomplete instrument b. Want of consideration absence of physical pressure

c.

Want of delivery of d.

Duress in the

51. This contract is without effect unless ratified a. Marriage between first degree cousins c. Contract of sale between a guardian and his ward d. b. Contract of sale between two insane persons Donation between husband and wife 52. a. b. c. d.

Dacion en pago as distinguished from sale The cause is the price The object exists and is specific There is no pre-existing obligation There is a greater degree of freedom in fixing the price

53. A contract as a rule must be in writing to be valid. A taxpayer is not entitled to interest in the overpayment of tax subject of a refund because an obligation derived from law is not presumed. a. Both statement s are true c. First is false, second is true b. Both are false d. Second is false, first is true 54. S1: As a general rule, the extrajudicial expenses required by the payment shall be for the account of the creditor. S2: If there is no stipulation and the thing to be delivered is specific, the place of payment shall be the domicile of the debtor. a. True;true b. true;false c. false;true d. false;false

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55. S1: Consignation without tender of payment is sufficient if two or more persons claim the same right to collect. S2: When the debt of a thing certain proceeds from a criminal offense, the debtor shall be exempted from the payment of the price of the thing is lost through a fortuitous event. a. Both statements are true. b. Both statements are false. c. S1 is true; S2 is false. d. S1 is false; S2 is true. 56. S1: The party may recover, if public interest will be subserved, money or property delivered by him for an illegal purpose, provided that he repudiates the contract before the purpose has been accomplished. S2: If an illegal contract constitute a criminal offense and both parties are guilty, both shall be criminally prosecuted but they may keep the object of the contract. b. true;false c. false;false a. True;true d. false;true 57. 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. 58. S1: If the cause is not stated in the contract it is presumed that it is lawful. S2: 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. Both are true c. Only 1st is true 14

b. Both are false

d. Only 1st if false

59. Simon offers to sell his house to Pedro for P200,000. Pedro asks him if he would accept P185,000. 1st: Because of ambiguity, both offers are terminated by operation of law. 2nd: Pedro’s response is a more inquiry, the P200,000 offer by Simon is still in force. a. True;true b. true;false c. false;true d. false;false 60. Debtor’s fault in real obligation is called a. Mora accipiendi b. Mora solvendi ex-re c. Mora solvendi ex-persona d. Compensation-morae 61. ) In order to amend the corporate by-laws, what vote is required to happen? a.)

2/3 votes of the Board of Directors and 2/3 votes of the outstanding capital stockanding capital stock b) Majority votes of the Board of Directors and 2/3 votes of the outstanding capital stock c) 2/3 votes of the Board of Directors and majority vote Majority votes of the Board of Directors and majority votes of the outstanding capital stock

b.) c.)

2/3 votes of the Board of Directors and majority votes of the outstanding capital stock

d.)

Majority vo...