Answer Key on Midterm Exam PDF

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DLSU Manila ACTREG 2 Midterm Examination LA Lakers entered into a contract with Nike Inc to provide two pairs of basketball shoes for Kobe Bryant and Andrew Bynum. No pair was, however, available at the time of perfection of the contracts. Kobe wears 10” basketball shoes which Nike normally manufact...

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DLSU Manila ACTREG2 Midterm Examination 1. LA Lakers entered into a contract with Nike Inc to provide two pairs of basketball shoes for Kobe Bryant and Andrew Bynum. No pair was, however, available at the time of perfection of the contracts. Kobe wears 10” basketball shoes which Nike normally manufactures for the general market while Andrew wears 20” basketball shows which will be manufactured specially for Andrew. What contracts are entered into by the parties? a. Both contracts of sale b. Both contracts for a piece of work c. Contract of sale ffor or K Kobe’ obe’ obe’ss shoes and contract for a piece of work for Andrew’ Andrew’ss shoes d. Contract of sale for Andrew’s shoes and contract for a piece of work for Kobe’s shoes 2. A sold his laptop to B at a price P10,000 cash and a cellphone with a fair value of P10,000. What is the name of the contract? a. Contract of Barter b. Contract of Agency c. Contract of Sale d. Contract of Pledge 3. On January 1,2012, S sold to B a specific car owned by X for P50,000. S promised to deliver the car to B on January 11,2012. S bought the car from X on January 10,2012 and delivered it to B on January 11,2012. Is the contract of sale between S and B valid? a. No because there is no delivery of the car on January 1,2012 which is an essential requisite of a contract of sale. b. No because the seller or vendor shall be the owner of the thing sold at the time of perfection of contract. c. Yes even if X is not the owner of the thing sold on January 11,2012 because future thing can be the object of a contract of sale. d. Yes because the vendor need not possess the title to the thing sold at the perfect perfection ion of the contract but he must have th the e right to transfer the ownership of the thing at the time that the thing is to be delive delivered. red. 4. On January 1,2012, D borrowed from C P100,000 and as a security D mortgaged his land to C. On January 2,2012, D sold the same land to X for P50,000 to be delivered on January 5,2012. D failed to pay the loan. Is the contract of sale between D and X valid? a. No because D is no longer the owner of the land on January 2,2012. b. No because D is no longer the owner of the land on January 5,2012. c. Yes because D is still the owner of tthe he land although it was mortgaged to C C.. d. Yes provided D will pay the amount due to C. 5. S sold a lottery ticket No. 143 to B on January 2,2012. The draw was already made on January 1,2012 and ticket No. 143 did not win. B purchased the ticket with intent to win the jackpot price. Is the contract of sale between S and B valid? a. Yes because it involves emptio spei or sale of mere hope. b. No because the sale of vvain ain hope or expectancy is void. c. No even if the ticket is considered collector’s item. d. Yes because the essential elements of contract of sale are present.

6. S is the sole owner of a condominium unit. S sells ½ undivided interest therein to B. Is the contract of sale valid? a. No because the object of a contract of sale must be determinate. b. No because the object of a contract of sale must be whole interest. c. Yes the sole owner of a thing may sell an undivided interest therein and such sale shall produce the effect of making the seller and the buye buyerr co-owners of the thing sold. d. Yes provided that the condominium unit shall be physically divided. 7. S sells to B 200 sacks of rice from a mass stored in the warehouse of S. The mass, however, actually consist of 300 sacks of rice. Which of the following statements is correct? a. The sale is null and void because the object is not determinate. b. The sale is valid provided B will pay for the excess 100 sacks of corn. c. The sale is valid, thus, S and B will become co-owners of the whole mass to the extent of 2/3 for B and 1/3 fo forr S. d. The sale is null and void because there is no consent. 8. S sells to B 300 sacks of yellow corn from a mass stored in the warehouse of S. The mass, however, actually consists of 280 sacks of yellow corn. Which of the following statements is correct? a. The sale is null and void because there is no consent. b. The sale is null and void because there is no determinate object. c. B becomes the owner of all the 280 sacks and S is bound to deliver additional 20 sacks in the absence of contr contra a ry agreement. d. B becomes the owner of all the 280 sacks and S is not bound to deliver the additional 20 sacks. 9. Which of the following contracts of sale is void? a. S sold to B a specific watch for P2,500 which both parties agreed upon. b. S sold to B a certain ring of which the price is the salary of the faculty member of La Salle School. c. S sold to B a specific car the price of which is subject to determination of X, third person. d. S sold to B 500 shares of ordinary stocks of BPI at the price equivalent to the closing price of the ALI’s ordinary shares on April 30,2020 at the Philippine Stock Exchange.

10. S sold to B a specific good. The price of the good cannot be determined. The good has been delivered to and appropriated by B. What is the obligation of B? a. B has no obligation because the contract of sale is null and void having no price. b. B has no obligation because the contract of sale is inefficacious because the price of the good cannot be determined. c. B has the obligation to rescind the contract. d. B has th the e obligation to pay a rea reasonable sonable price which depends on the circumstances of each particular case. 11. What is the effect of gross inadequacy of price in a contract of sale? a. It renders the contract of sale null and void. b. In renders the contract of sale unenforceable. c. It does not affe affect ct a contr contract act of sale, except as it may indicate a defect in the consent which make makess the contract voidable or except as it may indicate that the intention of the parties is another contr contra a ct such as donat donatii on or loan with equitab equitable le mortgage. d. It does not affect a contract of sale even if the parties really intended a donation or some other act or contract.

12. X and Y are good friends. X sold and delivered his car to Y. It was agreed and understood that on next Sunday X will name and fix the price of the car. Sunday came, X called Y by telephone and stated and fixed the price at P150,000. Is the contract of sale perfected? a. No because the purchase price is not yet paid. b. No because the title is not registered to the buyer. c. Yes because the car has already been delivered to Y. d. No because the price of the ssale ale was left to the discretion of one of the parties, that is, the seller seller,, and it was not consented by the buyer buyer.. 13. Which of the following contracts of sale is void? a. Executory oral sale of real property or any interest therein regardless of the price. b. Executory oral sale of goods, chattels or things in action the price of which is P500 or more. c. Sale of a piece of land by the a agent gent in the name of principal wherein his authority is not in writing. d. Sale of a piece of land by a third person in the name of owner but who has not been given any authority 14. S promised to sell his car to B for P100,000 giving B one week to decide whether to buy or not. B accepts the promise and gives a consideration of P1,000 for the one week period. If B decides to buy the car, how much should B pay to S? a. P100,000 because the P1,000 is an earnest money. b. P99,000 because the P1,000 is an option money. c. P100,000 because the P1,000 is an optio option n money money.. d. P99,000 because the P1,000 is an earnest money. 15. B purchased the car of S for P100,000 payable within 30 days from the date of sale. As a downpayment, B gives S P1,000 upon the execution of their agreement. How much should B pay to S on the 30th day? a. P100,000 because the P1,000 is an earnest money. b. P99,000 because the P1,000 is an option money. c. P100,000 because the P1,000 is an option money. d. P99,000 because the P1, P1,000 000 is an earnest money money.. 16. On January 1, S delivered an electronic calculator to B under a sale or return arrangement. S gave B up to May 7 to return the electronic calculator. Before May 7, the calculator was destroyed by fire. Should B pay for the purchase price? a. No because B is not yet the owner of the calculator. b. No because the calculator is destroyed through fortuitous event. c. Yes because B becomes the owner of tthe he calculator upon delivery delivery.. d. Yes if the fire is due to the fault of B. 17. Using the same data in preceding number except the fact that the arrangement is a sale on trial or approval, should B pay the purchase price? a. No even if the fire is due to the fault of B. b. Yes even if B signifies his approval before the fire. c. No if B does not signif signify y his approv approval al before the fire because B iiss not yet the o owner wner wner.. d. Yes because B becomes the owner of the calculator upon delivery.

18. Lebron is the registered owner of a vacant lot. Kevin stole the certificate of title of the registered lot of Lebron and through connivance with a notary public, he was able to execute a notarized deed of sale through forging the signature of Lebron. With connivance with a Registry of Deeds, Kevin was able to transfer the title of the lot to his name. Afterwards, Kevin sold the said lot to Carmelo who acquired the said lot after inspecting the title and the vacant lot. Carmelo is a purchaser in good faith and for value. Which of the following statements is correct? a. The contract of sale between Kevin and Carmelo is void because it is the product of a previous void contract. b. Lebron can recover the land from Carmelo because the title acquired by Carmelo is that of a thief even without reimbursing Carmelo. c. Lebron can recover the land from Carmelo provided he will reimburse him for the price Carmelo paid. d. Lebron cannot recover the land from Carmelo because a forged document or deed of sale, in case of registered lot, can be a root of a valid title if the title is already in the hand of a purchaser ffor or value and in good faith. 19. Manny, a Filipino, sold his private land to Ippo, a Japanese national. The contract of sale has already been executed. Which of the following statements is correct? a. The contract of sale is void because it is violative of Constitutional provision against ownership of private land by foreigners. Therefore, Manny cannot ask for declaration of nullity because of principle of pari delicto. b. The contract of sale is unenforceable because it is violative of Constitutional provision against ownership of private land by foreigners. c. Ownership of the land will transfer to Ippon and the contracts can no longer be avoided since the contract is already executed. d. Manny can still recover the land by filing an ac action tion for declar declaration ation of nullity because the principle of pari delicto is not applicable in the case since it will frustrate the state policy to reserve the land to Filip Filipin in inos. os. 20. Naruto, a Filipino, sold his private land to Hinata, a Japanese national. Afterwards, Hinata sold the said private land to Kakashi, a Filipino. Which of the following statements is correct? a. Both contracts of sale are subject to declaration of nullity because they are violative of Constitutional provision against ownership of private land by foreigners. b. Both contracts of sale are unenforceable because they are violative of Constitutional provision against ownership of private land by foreigners. c. Ownership of the land will tr trans ans ansfer fer to Kakashi and the contracts cannot be avoided since the land is finally with a Filipino. d. The second contract of sale is void because it is the product of the first contract of sale. 21. S, a minor of 17 years, sold his watch for P1,500.00 to B, 30 years old. The guardian of S was not aware of the sale; hence, no action for annulment has yet been filed. Subsequently, B sold the watch to T, who acquired it in good faith. Which of the following statements is correct? a. T acquires no title to the watch because the seller’s title is voidable. b. T acquires good title to the watch even if he buys it in bad faith. c. T acquires good title to the watch even if the voidable title of the seller has been avoided before the time of sale as long as T acquires the watch in good faith, for value and without notice of seller’s defect of title. d. T acquires good title to the watch even if the seller’ seller’ss title is voidable provid provided ed the same has not been avoided at the time of s ale and T acquires the watch in go good od faith, for value a and nd without notice of seller’ seller’ss defect of title.

22. The following are the instances when goods are no longer in transit and therefore the unpaid seller can no longer exercise his right of stoppage in transitu, except a. If the buyer obtains delivery of the goods before arrival at the appointed destination. b. If the carrier or other bailee acknowledges to the buyer or his agent, that he is holding the goods in his behalf, after arrival of the goods at their appointed destination. c. If the carrier or other bailee wrongfully refuses to deliver the goods to buyer or his agent. d. If the goods are rejected b by y the buye buyerr, and the carrier or other bailee continues in possession of them, even if th the e seller has refused to receive them back. 23. What is the prescriptive period available to the buyer for filing the legal action (action quanti minoris or action for cancellation) regarding contract of sale of lot with lacking area or with poor quality? a. 6 months from the date of delivery b. 12 months from the date of delivery c. 3 months from the date of delivery d. 1 month from the date of delivery 24. S sold his watch to B in a public document. However, B informed S that he would obtain actual delivery of the watch after 3 days. The day after the sale to B, S sold the same watch to X in a private document and X immediately took possession of the watch. X was not aware of the sale to B. Who has a better right over the watch? a. B because he has the older title. b. B because he first took construct constructive ive possession of the watch in good faith. c. X because he first took actual possession of the watch in good faith. d. X because X has not registered the watch in good faith. 25. On May 1, S sold his registered/titled lot to X. The deed of sale was in a private instrument. On May 3, S sold the same lot to Y in a public instrument. On May 5, S sold again the said lot to Z in a public instrument. Z immediately registered the sale with Register of Deeds on May 5. X took actual possession of the lot on May 6. X, Y and Z were not aware of the sale made to others. Who among the buyers has the better right? a. X because he first took actual possession in good faith. b. X because he has the oldest title in good faith. c. Y because he first took constructive possession in good faith. d. Z because he is the first reg regis is istr tr trant ant in good faith. 26. What is the prescriptive period for the warranty against hidden or non-apparent burden, encumbrances or servitude on immovable? a. 6 months from the execution of deed of sale or discovery of encumbrance or burden b. 40 days from the execution of deed of sale or discovery of encumbrance or burden c. 1 year from the ex execution ecution of deed of sale or discovery of encumbr encumbrance ance or burden d. 3 days from the execution of deed of sale or discovery of encumbrance or burden 27. What is the prescriptive period of the accion redhibitoria, accion quanti minoris or all other actions to enforce the seller’s liability for hidden defect? a. 1 year from the delivery of the thing sold b. 1 month from the delivery of the thing sold c. 6 months from the delive delivery ry of the thing sold d. 3 months from the delivery of the thing sold

28. What is the prescriptive period of redhibitory action in case of sale of animal with redhibitory defect? a. 30 days from the delivery of animal to the vendee. b. 20 days from delivery of animal to the vendee. c. 40 days from deliv delivery ery of animal to the ve vendee. ndee. d. 10 days from delivery of animal to the vendee. 29. What is the status of the contract of sale when the animals are suffering from contagious diseases or when the animals are found to be unfit for the use or service for which they were acquired as stated in the contract? a. Void b. Voidable c. Rescissible d. Unenforceable 30. The following are the requisites in order for the vendor to be liable in case the animal dies of disease, except a. The disease exists at the time of sale. b. The disease is the cause of death of the animal. c. The animal dies within 3 days from time of purchase. d. The disease is redhibi redhibittory ory.. 31. UST sold its accounts receivable worth P1M from its students to BPI for P900,000. The students paid UST in the amount of P1M. What is the effect of payment? a. The students are released from the oblig obligation ation if th they ey pay UST befo before re the knowledge of the assignment. b. The students must still pay BPI the amount of P1M. c. BPI can no longer recover the P1M from UST. d. The basis of liability of UST to BPI is quasi-delict. 32. Which of the following may become a subject matter of contract of sale? a) Future inheritance b) Pig with African Swine Fever c) Kidney organ d) Pa Patrimonial trimonial property of tthe he state 33. A franchisee of PCSO sold an undrawn lottery ticket No. 23 to a bettor. This contract is considered a) Emptio spei b) Emptio rei speratae c) Empio pour autrui d) Emptio commissorium 34. In which of the following cases is the price of the contract of sale considered uncertain making the contract void ab initio? a) Sale of a specific cellphone whereby the price is left by the buyer and seller to the judgment of a specified third person b) Sale of a specific laptop whereby the p price rice is the monthly salary of At Atty ty ty.. John Lloyd Cruz c) Sale of a specific tablet whereby the price of P40,000 is fixed by the seller but voluntarily accepted by the buyer d) Sale of preferred stock of Globe Incorporated equivalent to the closing price of common stock of Smart Incorporated in the Philippine Stock Exchange on October 4, 2020

35. S and B orally entered into a contract involving a production of a particular dining table based on the design specifically customized for B at a price of P500 with the payment and delivery to be made one month from the date of oral agreement. The estimated production cost of the said dining table is P800. What is the status of contract between S and B? a) Perf Perfectly ectly vva a lid contr contract act b) Rescissible contract c) Voidable contract d) Unenforceable contract 36. In which of the following contracts is full payment of the price generally the operative act that transfers ownership from the seller to the buyer? a) Contract of sale b) Agency to sell c) Consignment sale d) Contract to sell 37. S sold and delivered a mass of black pepper (100 sacks) in his specific warehouse to B at a lump sum price P100,000 per sack. Which of the following statements is correct? a) The contract of sale is void because the subject matter is not determinate at the time of constitution of the contract. b) If the content of the mass is 150 sacks, B will own all the mass of black pepper provided he will pay P100,000 to S. c) If the content of the mass is only 80 sacks, S is still required to deliver additional 20 sacks to B unless there is stipulatio stipulation n to the contrary contrary.. d) None of the above 38. S and B orally agreed for the sale of a specific car at a price of P100,000. As a downpayment, B paid manager’s check with amount of P10,000 to S on the date of oral agreement. Delivery of the car will happen after the full payment of the price which will happen 2 years after the date of oral agreement. Which of the following statements is correct? a) B may legally compel S to sign a and nd execute the notarized deed of sale of car car.. b) The oral contract of sale of car between S and B is unenforceable by court action. c) I B decides to buy the car 2 years after the oral agreement, he must still the total purchase price of P100,000 to S. d) The oral contract entered between S and B is a co...