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BL 1: Obligations and ContractsFINAL EXAMINATIONName: Score:Section:________1. When the object of the contract is outside the commerce of man, the contract is: a. Void b. Rescissible c. Voidable d. Unenforceable________2. In order that fraud may make a contract voidable: a. It should be serious and ...

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BL 1: Obligations and Contracts FINAL EXAMINATION

Name: Section: ________1. When the object of the contract is outside the commerce of man, the contract is: a. Void b. Rescissible c. Voidable d. Unenforceable ________2. In order that fraud may make a contract voidable: a. It should be serious and should not have been employed by both contracting parties b. It may incidental but should have been employed by both parties c. It should be serious and the parties must be in pari delicto d. It may be incidental but both parties should not be in pari delicto ________3. A and B who are both unemancipated minors entered into a contract. The contract entered into by and between them is: a. Unenforceable b. Rescissible c. Voidable d. Void ________4. Which of the following contracts cannot be ratified? a. Those whose cause or object did not exist at the time of the transaction b. Unauthorized contracts c. Those where both parties are incapable of giving consent d. Those that fail to comply with the Statute of Frauds ________5. On July 15, 1986, X entered into a contract with Y. On February 10, 1987, X discovered that fraud was committed at the time he entered into the contract, a fraud that vitiated his consent. The action for annulment shall be brought: a. Within four years from February 10, 1987 b. Within three years from the time of fraud c. Within four years from the time A entered into the contract d. On February 10, 1987 ________6. On September 1, 1987, A entered into a contract with B whereby A sells to B 5,000 sacks of sugar to be delivered on the 15th and to be paid in full on the 30th. There was no agreement for rescission based on nonpayment. A did not deliver on the 15 th but on the 30th, he was willing and offering to deliver but b did not make payment on the said date and so A did not like it and refuse to make delivery. Decide. a. A cannot rescind the contract for nonpayment of the price b. A can rescind the contract for nonpayment of the price c. A cannot refuse to deliver the goods d. B is not entitled to recover damages ________7. Case 1 – A hired B for P10,000 to kidnap C, and he paid B in advance. Before B could kidnap C, and A relented and stopped B from performing the contract. The court may not allow A to recover from B the P5,000 he paid in advance. Case 2 – A, at the point of a gun, compels B to marry him. Since the contract of marriage is voidable, either A or B has the right to file the action or annulment. a. Case 1 is true but case 2 is false

Score:

b. c. d.

Both cases are false Case 1 is false but case 2 is true Both cases are true

________8. Contracts entered into during lucid interval are a. Unenforceable b. Perfectly valid c. Voidable d. Void ________9. Three of the following may be valid objects of a contract, except: a. All that are within the commerce of man. b. All services which are not contrary to law. c. Impossible things or services. d. All rights that are transmissible. ________10. 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. Contract c. Consent d. Stipulation ________11. The elements of a contract without which a contract would not exist are known as: a. Accidental elements b. Natural elements c. Essential elements d. Special elements ________12. A contract that can stand by itself is known as: a. Accessory contract b. Commutative contract c. Principal contract d. Gratuitous contract ________13. A contract that does not have any special name under the law is known as: a. Nominate contract b. Special contract c. Innominate contract d. Nominal contract ________14. The contracting parties may establish such stipulation, clauses, terms and conditions as they may deem convenient provided they are not contrary to law, morals, good customs, public order or public policy. This is known as the principle of: a. Mutuality of contract b. Relativity of contract c. Liberty of contract d. Obligatory force of contract ________15. 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. Consensuality of contract

b. c. d.

Relativity of contract Mutuality of contract Freedom to contract

________16. D borrowed P500,000 from C. D died without having paid his loan obligation to C. He left S, his son and heir, properties worth P400,000. a. S is liable to C for P500,000. b. S is liable to C for P100,000. c. S is not liable at all because he should not be made to shoulder the obligation of his father. d. S is liable to C for P400,000. ________17. A contract may be enforced by or against a third person, except: a. In the case of stipulation pour autrui b. When a third person induces another to violate his contract c. In case of contracts intended to defraud creditors d. When the benefit to the third person is merely incidental ________18. The principle that contracts are perfected by mere consent is known as: a. Consistency of contract b. Consummation of contract c. Mutuality of contract d. Consensuality of contract ________19. One of the following is not a real contract: a. Pledge b. Commodatum c. Deposit d. Sale ________20. 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 b. Contract c. Cause d. Consent ________21. Three of the following instances will render an offer ineffective before acceptance is conveyed. Which one will not? a. Civil interdiction of either party b. Insolvency of either party c. Intoxication of either party d. Insanity of either party ________22. One of the following is not incapable of giving his consent a. Insane persons b. Somnambulist c. Deaf-mutes who know how to read d. Unemancipated minors ________23. A contract in which one of the parties is incapacitated a. Void b. Rescissible c. Voidable d. Unenforceable ________24. Contracts entered into in a state of drunkenness or during hypnotic spell are: a. Void

b. c. d.

Rescissible Voidable Valid

________25. Contract that is effective upon execution but may be invalidated later a. Rescissible b. unenforceable c. voidable d. void ________26. Cannot be sued upon unless ratified a. Rescissible b. voidable c. unenforceable d. void ________27. Validable contracts a. Rescissible b. voidable c. unenforceable d. void ________28. Contracts that that has no effect upon execution but may be effective upon ratification a. Rescissible b. voidable c. unenforceable d. void ________29. No effect at all a. Rescissible b. voidable c. void d. unenforceable ________30. Cannot be ratified nor validated a. Rescissible b. Voidable c. void d. unenforceable ________31. Inexistent contract a. Rescissible b. voidable c. unenforceable d. void ________32. X (guardian) sold the land of Y (ward) to Z for P300,000. The value of the land is P500,000. a. Y can rescind the contract between X and Z within 4 years after reaching the age of majority b. Lesion suffered by Y is more than ¼ of the value of the land, hence, he can rescind he contract c. If rescission is proper and it prospers, X should return to Z the money plus interest; Z to X, the land plus fruits d. All of the above ________33. Consent is vitiated intimidation, undue influence or fraud a. Rescissible b. unenforceable c. void d. voidable

by

mistake,

violence,

________34. Action for annulment shall be brought within 4 years a. From the time the defect of consent ceases in cases of intimidation, violence or undue influence b. From the time of discovery in case of mistake or fraud c. From the time guardianship ceases d. All of the above ________35. Cures the defect of contract celebrated in the name of another without authority or in excess of authority a. Rescission b. annulment c. reformation d. ratification ________36. Which can be enforced in courts? a. Those executed by one in the name of another without any authority or in excess of authority b. Those that do not comply with the Statute of Frauds c. Those where both parties are incapable of giving consent d. None of the above ________37. Statute Of Frauds a. Law that requires that certain contracts must be in writing otherwise they are unenforceable b. Failure to execute the contract in writing does not render the contract void, only unenforceable c. Applies to executory contracts, not to contract totally or partially executed d. All of the above ________38. It exists when a person takes improper advantage of his power over the will of another depriving the latter of a reasonable freedom of choice. a. Intimidation b. Duress c. Threat d. Undue influence ________39. Nano and Iking entered into a contract where they made it appear that Nano was mortgaging his lot and building to Iking to secure a contract of loan. The truth, however, was that Nano was selling his lot and building to Iking. Which of the following statements is true? a. The parties are bound by the contract of loan and mortgage. b. The parties are not bound at all. c. The parties are bound by the contract of sale only when third persons are affected. d. The parties are bound by the contract of sale. ________40. 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 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. Rescissible because B will likely suffer damage if the eggs do not come into existence c. Unenforceable because the contract was not in writing d. Valid because future things may be the object of contracts ________41. A died leaving properties estimated at P1 M to his sons S and T. Subsequently, S sold one-half of his inheritance to X for P300,000, although his share was still to be delivered

a. b. c. d.

The contract is void because what S sold is future inheritance which may not be the object of a contract as a rule The contract is valid since the inheritance is an existing inheritance The contract is rescissible The contract is unenforceable

________42. If mistake, fraud, inequitable conduct, or accident has prevented a meeting of the minds of the parties to contract, the proper remedy is a. sue for specific performance of the contract b. reformation of the contract c. annulment of the contract d. ratify the contract ________43. D is indebted to C for P10,000. For the purpose of defrauding C, D sold his only parcel of land to X valued at P10,000. X had no knowledge of the intention of D a. The contract between D and X is binding b. The right of C is to rescind the contract because the transaction is fraudulent c. The contract is voidable because D is in bad faith d. the contract between D and X is rescissible ________44. G was appointed guardian of S, the latter being 16 years old. S sold his parcel of land in writing to B valued at P100,000 for P75,000, suffering lesion by ¼ of the value. What is the status of the contract? a. rescissible b. voidable c. unenforceable d. enforceable ________45. Which of the following contracts is not rescissible? a. Those which are entered into by guardians whenever the wards whom they represent suffer a lesion of more than ¼ of the value of the object of the contract b. Those where one of the parties is incapable of giving consent to a contract c. those executed in representation of absentee, if the latter suffer a lesion of more than ¼ of the value of the object of the contract d. Those undertaken in fraud of creditors when the latter cannot in any other manner collect the claims due them ________46. Which of the following contracts is voidable? a. Those where both of the parties are incapable of giving consent to a contract b. Those where the consent if vitiated by mistake, fraud, violence, intimidation or undue influence c. Those undertaken in fraud of creditors when the latter cannot in any other manner collect the claims due them d. Those whose object is outside the commerce of men ________47. Which of the following contracts is rescissible? a. Those where one of the parties is incapable of giving consent to a contract b. Those which are entered into by guardians whenever the wards whom they represent suffer lesion by more than ¼ of the value of the object of the contract c. Those where both of the parties are incapable of giving consent to a contract d. Those which are absolutely simulated or fictitious ________48. Chai sold her lot consisting of 1,000 square meters to Ming. However, the deed of sale signed by the parties showed a

a. b. c. d.

total area of 1,200 square meters due to the secretary’s mistake. Later, Chai discovered the mistake. What remedy is available to either party? rescission reformation annulment d. declaration of nullity

________49. On June 1, Shin Hyee offered to sell a specific generator set to Min Ho for 300,000. Min Ho sent his letter of acceptance to Shin Hyee on June 8. On June 10, however, Min Ho became insane. On June 12, Shin Hyee received Min Ho’s letter of acceptance. a. The contract was perfected on June 8 when Min Ho sent his letter of acceptance, at which time he was still sane. b. The contract was not perfected because the insanity of Min Ho occurred before Shin Hyee came to learn of the acceptance of his offer by Min Ho. c. The contract was perfected on June 12 when Shin Hyee learned of acceptance. d. The contract was perfected on June 1 because the acceptance made by Min Ho on June 8 retroacts to the date of the offer.

A. B. C. D. E. F. G. H. I. J. K. L. M. N. O. P. Q. R. S. T.

Aleatory contract Annulment Preparation of a contract Lucid interval Cause Onerous contract Natural elements Commutative contract Mutuality of contract Nominate contract Perfection of a contract Ratification Auto contract Consideration State of drunkenness Innominate contract Relativity of contract Real contract Essential elements Consensual contract Items

________50. On March 1, S sent a letter offering the sale of his car for P200,000 cash to B. In his letter, S stated that B’s acceptance should be sent by registered mail and must be received by S not later than March 31. On March 20, B accepted the offer of S by sending an e-mail message on the same day to S whose e-mail address was indicated in the letter. S read the message the following day, March 21. Was there a perfected contract between S and B? a. Yes, on March 1. b. No, no contract was perfected at all. c. Yes, on March 20. d. Yes, on March 21. II. Write TRUE if the statement is correct and wrong if it is FALSE. ________1. A relatively simulated contract is void. wrong ________2. The illegality of the motive of a party to a contract renders the contract void. wrong ________3. The action of rescission must be commenced within three years. wrong ________4. A party who employed violence, intimidation, undue influence, or fraud, or who caused mistake may bring an action to annul the contract on any such ground. wrong ________5. Option money is part of a purchase price. Wrong ________6. Contracts entered into during a lucid interval are valid. TRUE ________7. The usual exaggerations in trade, when the other party had an opportunity to know the facts, are not in themselves fraudulent. TRUE ________8. Incidental fraud does not render a contract voidable but only obliges the person employing the damages. TRUE ________9. Reformation cannot be availed of in the case of a last will and testament. TRUE ________10. Reformation is not available if the contract is void. TRUE II. MATCHING TYPE. Indicate your answers by writing the letter representing the statement or phrase that best describes, defines or explains the numbered items. Terms

________1. A contract whose fulfillment depends upon chance. A ________2. The action that is brought to set aside a voidable contract. B ________3. Involves preliminary negotiations and bargaining, with no arrival yet of a definite agreement. C ________4. The period of temporary sanity of an insane person. D ________5. The essential reason of a party in entering into a contract. E ________6. A contract that does not have any special name under the law. P ________7. The principle that contracts take effect only between the contracting parties, their assigns and heirs. Q ________8. The delivery of the object is required for its perfection. R ________9. Elements without which a contract would not exist. S ________10. A contract that is perfected by mere consent. T...