LAW ON Contracts 2 - Law law law PDF

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FINAL EXAMINATIONLAW ON CONTRACTSI. Multiple Choice: Read each questions carefully. Write the letter of your correct answer and explain your answer briefly and concise. An answer without an explanation will not earn a point. Thank you. PLEASE DO NOT CHEAT. Please answer this exam as honest as you ca...

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FINAL EXAMINATION LAW ON CONTRACTS I.

Multiple Choice: Read each questions carefully. Write the letter of your correct answer and explain your answer briefly and concise. An answer without an explanation will not earn a point. Thank you. PLEASE DO NOT CHEAT. Please answer this exam as honest as you can. God bless.

1. A delivered his bracelet to B for B’s necklace. No written agreement was signed by the parties. Which of the following is appropriate description of the contract between A and B? A. Onerous and bilateral C. Bilateral and innominate B. Bilateral and innominate D. Aleatory and nominate 2. They are the elements that are found in certain contracts and are presumed to exist unless set aside by the parties A. Accidental elements C. Artificial elements B. Natural elements D. Incidental elements 3. They refer to the elements that may be stipulated by the contracting parties A. Accidental elements C. Artificial elements B. Natural elements D. Incidental elements 4. The following are some accidental elements of a contract of sale, except A. Terms of payment C. Place of payment B. Interest rate D. Accession and accessories 5. A contract where the cause with respect to each contracting party is the prestation or the promise of a thing or service by the other is A. An onerous contract C. An innominate contract B. A gratuitous contract D. An aleatory contract 6. A contract where one party receives no valuable consideration and the cause is the liberality of the benefactor is A. A gratuitous contract C. An onerous contract B. A unilateral contract D. A commutative contract 7. A delivered his van to B for the latter’s use for one week without any compensation. The cause of the contract is A. The van of A C. The period of one week B. The generosity of A D. The delivery of the van 8. The principle that contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, moral, public policy and public order, refer to the principle of A. Liberty of contract C. Consensuality of contract B. Relativity of contract D. Mutuality of contract 9. The following instances will render an offer ineffective before acceptance is conveyed. Which one will not? When one of the parties A. Is civilly interdicted C. Becomes insane B. Becomes insolvent D. Is placed under a hypnotic spell 10. The following statements pertain to the cause of a contract. Which statement refer to motive? A. It is the essential reason of a contract.

B. It is always known to the contracting parties C. It is illegality does not affect the validity of the contract D. there will be no contract without it 11. The bargaining point, that is, when negotiation is in progress (stage in the life of a contract) A. Consummation C. Perfection B. Conception D. Birth 12. The meeting of minds regarding the object and cause of the contract (stage in the life of a contract) A. Conception C. Death B. Preparation D. Birth 13. The point where the parties have performed their respective obligations and the contract is Terminated A. Preparation C. Perfection B. Conception D. Consummation 14. When there is concurrence of offer and acceptance, there is A. Payment C. Consent B. Consignation D. Tender of payment 15. An absolutely simulated or fictitious contract is A. Void C. Rescissible B. Voidable D. Unenforceable 16. A sold to B his cow for P5,000. No date is fixed by the parties for the performance of their respective obligations. The obligation of A is A. To deliver the cow immediately as there is a perfected contract. B. To deliver the cow within the reasonable time from the perfection of the contract C. To deliver the cow upon the payment by B of P5,000 D. To rescind the contract as there is no time fixed for the delivery and payment. 17. A owes B P10,000 due on March 10, 2010. A owes B P8,000 due on March 11, 2010. A obliged himself to deliver to B a cow valued at P6,000 on March 12, 2010. On March 13, 2010, a paid B P10,000. If A makes an application of payment, A. The P10,000 should be applied to the first debt only B. The P10,000 should be applied to the second debt only C. The P10,000 may be applied either to the first debt or second debt D. The P10,000 may be applied to the first debt, or to the second debt or to the third debt 18. A contract where both contracting parties are incapable of giving consent is A. Void C. Unenforceable B. Rescissible D. Voidable 19. The conception of a contract is when A. When there is meeting of the minds B. When negotiations are in progress C. When the contract is executed D. When the parties come to an agreement 20. Contract which has no effect at all A. Rescissible B. Voidable

C. Unenforceable D. Void

21. Contract which cannot be ratified A. Rescissible B. Voidable

C. Unenforceable D. Void

22. If mistake, fraud, accident or inequitable conduct has prevented a meeting of the minds of the parties to a contract, the proper remedy is A. Ratify the contract C. Annulment of the contract B. Ask for a specific performance D. Reformation of the contract 23. A sold his land to B. The sale was made orally. B paid the agree price. B wanted to have the sale registered but he needs a public instrument. Which is correct? A. B may sue A for the return of his money as no one shall be unjustly enriched at the expense of another. B. B cannot demand the return of the purchase price because the sale is unenforceable. C. B may compel A to execute the public instrument because the sale is valid. D. B may only occupy and use the land as buyer in good faith 24. A is the guardian of B, a minor. B sold A’s land in writing to C valued at P1M for P.7M. The sale is (stage in the life of a contract) A. Rescissible C. Unenforceable B. Voidable D. Void 25. Although validly agreed upon, courts can nullify this contract because of damage to one of the parties or to a third person and its enforcement, may cause injustice by reason of some external facts A. Rescissible contracts C. Unenforceable contracts B. Voidable contracts D. Void contracts 26. A contract where the fulfillment is dependent upon the chance, so the values may vary because of the risk or chance. A. Commutative C. Remunerative B. Aleatory D. Gratuitous 27. A clause providing that the mortgagee will automatically own the property mortgaged if the debt is not paid at maturity is A. Dacion en pago C. Pactum Commissorium B. Payment by cession D. Upset price 28. The contact must bind both contracting parties A. Consensuality of contract C. Mutuality of contract B. Simplicity of contract D. Relativity of contract 29. Not a characteristic of contract A. Consensuality of contract B. Simplicity of contract

C. Mutuality of contract D. Relativity of contract

30. Contracts are generally effective only between the parties, their assigns and their heirs A. Consensuality of contract C. Mutuality of contract B. Simplicity of contract D. Relativity of contract 31. A stipulation in favor of a third person A. Stipulation pour autrui B. Stipulation pour over

C. Assignment of credit D. Pactum commissorium

32. Not a requisite of stipulation pour autrui A. The contracting parties must have clearly and deliberately conferred a favor upon third person B. The stipulation must be part of the contract C. The third person communicated his acceptance to the obligor before its revocation D. There must be an agency between either of the parties and the third person 33. The following contracts are not perfected until the delivery of the object of the obligations, except A. Pledge C. Commodatum B. Deposit D. Sale 34. Pledge, deposit and commodatum are A. A Consensual contracts B. Real contracts

C. Solemn contracts D. Formal contracts

35. Acceptance of an offer made by letter or telegram shall bind the offeror. From the time the A. Offeree accepted the offer B. Offeree sent his letter or telegram C. Acceptance came to the knowledge of the offeror D. Offeror made the offer 36. A contract where consent is given through mistake, violence, intimidation, undue influence or fraud is A. Rescissible C. Unenforceable B. Voidable D. Void 37. The mortgagor will execute an instrument to transfer the ownership over the property mortgaged to the mortgagee if the debt is not paid at maturity is A. Void C. Valid B. Voidable D. Unenforceable 38. A, B and C are jointly liable to D in the amount of P9,000. D assigns the entire credit to A. In this case A. The obligation is extinguished because of confusion B. B and C will not be liable to A C. a becomes the new creditor and may demand from B and C P4,500 each D. A’s share in the obligation is extinguished because of confusion. 39. One is not a requisite needed in order that obligation shall be extinguished by loss or destruction of the thing due: A. When the thing is lost without the fault of the debtor B. When the thing lost is generic C. When the thing is lost before the debtor has incurred in delay. D. When the thing lost is specific 40. The obligation is demandable on the date of the obligation and shall continue to be in force up to the arrival of the day certain: A. Resolutory period C. Indefinite period B. Suspensive period D. Legal period 41. Characteristic of void contracts, except A. Defense of illegality cannot be waived B. Cannot be ratified C. Action for declaration of inexistense does not prescribe D. The inexistence can be assailed by third person

42. Unless ratified, suits will not prosper if the contract is A. Rescissible C. Unenforceable B. Voidable D. Void 43. The following statements concerning void contracts are correct, except A. The defense of illegality of contracts is available to third persons whose interests are directly affected. B. A contract which is the direct result of a previous illegal contract is also void and inexistent. C. In case of a divisible contract, if the illegal terms can be separated from the legal ones, the latter may be enforced. D. The concept of pari delicto still allows the contracting party to file an action for declaration of nullity. 44. The following statements concerning ratification of unenforceable contracts are true, except A. In a contract where both parties are incapable of giving consent, express or implied ratification by the parent, or guardian, as the case maybe, of one of the contracting parties shall give the contract the same effect as if only one of them were incapacitated. B. In a contract where both parties are incapable of giving consent and if ratification is made by the parents or guardians, as the case may be, of both contracting parties, the contract shall be validated from the inception. C. Ratification of unenforceable contracts will make them valid and binding. D. Unenforceable contracts can be assailed by third persons. 45. The hotel – keeper and the guests agree that the responsibility of the former as set forth in Articles 1998 to 2001 of Civil Code regarding necessary deposits brought by the guests is suppressed or diminished. It was also stipulated that the hotel – keeper is free from responsibility to the effect that he is no liable for the articles brought by the guest. Are the stipulations valid? A. They are always void for being contrary to law and public policy. B. They are valid if agreed to in writing. C. They are valid provided that hotel – keeper properly posted the notices containing the waiver in the rooms. D. They are only void if they are entered into orally. 46. A is a creditor of B. In order to escape the liability to A, B sell all his property to C. May A ask for rescission of the contract of sale between B and C? A. No because A is not a party to the contract. B. No because A has no right of rescission. C. Yes because creditors are protected in cases of contracts intended to defraud them. D. Yes even if the right of levy and execution and accion subrogatoria are still available. 47. A borrowed P 10,000 from B and entered into a contract of real estate mortgage involving his car. A is also indebted to C in the amount of P 100,000 but the latter cannot attach the car because of the mortgage. May C file an action for declaration of nullity of contract of real estate mortgage? A. Yes because a void contract may be assailed by a third person directly affected by such void contract. B. No because C is not a party to the contract. C. No because it will be violative of relative of contract. D. No because it will be violative of relative of contract. 48. From the moment of perfection of a contract, what is the extent of its binding effect? A. The parties are bound only to the fulfillment of what has been expressly stipulated in the contract. B. The parties are bound only to the natural consequences of the contract.

C. The parties are bound not only to the fulfillment of what has been expressly stipulated in the contract but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. D. The parties are not bound by what is not stipulated in the contract. 49. An owner of hacienda did not authorize his wife and children to sell the said hacienda but upon being informed that they had done so, instead of refusing to enforce of the sale, he proceeded to collect in installments the amount of promissory note given to the purchase. Can the buyer of the hacienda enforce the contract of sale of land? A. No because the contract is unenforceable considering the wife and children has no authority to sell the land. B. No because the contract is rescissible considering that it is entered into to defraud the creditors. C. Yes because the contract is only voidable and therefore enforceable. D. Yes because the contract becomes enforceable upon the collection of the purchase price which is considered an implied ratification. 50. On January 1, 2021, A wrote a letter to B offering him to lease a building. On January 2, 2021, B sent a letter to A advising him that his offer was accepted. This letter was received by A at 2:55 pm that day. On the same day, in the morning, at 11:25, A had already written a letter to B, withdrawing the offer to lease the building. The letter revoking the offer was received by B at 3:55 pm. Is the contract perfected? A. Yes because the offer was accepted by B before the revocation was received by him. B. Yes because the contract is perfected from the moment B send the letter of acceptance. C. No because before the acceptance is known, the offer can be revoked, it not being necessary, in order for the revocation to have the effect of impeding the perfection of the contract, that it be known to the offeree. D. No because the contract is perfected only by the execution of written contract. 51. A department store advertises a Christmas sale of men’s and women’s shoes, those of men at a price of P20 and above, and those of women’s at P10 and above. Can anyone of the public make an acceptance of the offer? A. Yes because business advertisements of things for sale are definite offers. B. No because business advertisements are mere invitations to make an offer. C. Yes because those who advertise are stopped. D. No because an offer cannot be made through an advertisement. 52. One of the parties agrees to an upset price in a contract of sale with full knowledge of the favorable or unfavorable possibilities with respect to the essential circumstances of the contract. What is the status of the contract? A. Voidable because there is mistake in the upset price. B. Null and void because upset price is prohibited by law in any type of contract. C. Valid and without defect because there is no mistake if the party alleging it knew the doubt, contingency or risk affecting the object of the contract. D. Unenforceable because it violate statute of frauds. 53. If one of the parties believed that he received a certain amount as a loan, which the other delivered as a real deposit, what is the status of the contract? A. Voidable contract of loan on the part of the first party. B. Voidable contract of real deposit on the part of the second party. C. Valid contracts of loan and deposit on both parties. D. Null and void because of want of consent.

54. A borrowed money from B. Upon failure of A to pay the loan, B threatened to A to file a collection suit against A if the latter will not execute the contract of mortgage. As a result of the threat, A entered into the contract of mortgage. What is the status of the contract of mortgage? A. Void because threat is illegal. B. Voidable because the consent of A is vitiated. C. Valid and binding because the claim of B is just and legal. D. Unenforceable because there is violation of statute of fraud. 55. Through insidious words and fraudulent machinations by B, A entered into a contract with B. What is the remedy of A? A. To ask for annulment of contract because there is dolo incidente. B. To ask for damages because there is dolo causante. C. To ask for damages because there is dolo incidente. D. To ask for annulment of contract because there is dolo causante. 56. Which of the following statements is incorrect? A. The statement of a false cause in contracts shall render them void, if it should not be proved that they were founded upon another cause which is true and lawful. B. Although the cause is not stated in the contract, it is presumed that it exists and is lawful, unless the debtor proves the contrary. C. As a general rule, lesion or inadequacy of cause shall invalidate a contract. D. The particular motives of the parties in entering into a contract are different from the cause thereof. 57. When, there having been a meeting of minds of the parties to the contract, their true intention is not expressed in the instrument purporting to embody the agreement, by reason of mistake, fraud, inequitable conduct or accident, what is the remedy of one of the parties? A. Ask for reformation of the instrument. B. Ask for annulment of the contract. C. Ask for rescission of the contract. D. Ask for indemnification for damages. 58. The following are the rules for interpreting or construing a contract, except A. In order to judge the intention of the contracting parties, their contemporaneous and subsequent acts shall be principally considered. B. If the contract is clear, the judge must interpret and construe it in order to determine the hidden motive of the contracting parties. C. However general the terms of a contract may be, they shall not be understood to comprehend things that are distinct and cases that are different from those upon which the parties intended to agree. D. If some stipulation of any contract should admit several meanings, it shall be understood as bearing that import which is most adequate to render in effectual. 59. The following are requisites in order that an action for rescission of a contract or accion pauliana may prosper, except A. The contract must be rescissible. B. The action for rescission must be brought within the prescriptive period of 1 year. C. The things which are the object of the contract must not have passed legally to the possession of a third person acting in good faith. D. The person demanding rescission must be able to return whatever he may be obliged to restore if rescission is granted. 60. The following statements pertaining to the effects of annulments of contract are correct, except A. The contracting parties shall restore to each other things which have been the subject matter of the contract with their fruits and the price with interests.

B. In obligations to render services, the value thereof shall be the basis for damages. C. When the defect of the contract consists in the incapacity of one of the parties, the incapacitated person is not obliged to make any restitution except insofar as he has been benefited by the thing or price received by him. D. Annulment of contract may be availed to by the capacitated contracting party or by the contracting party who vitiated the consent of the other party. II. For the following scenario, determine the status of the contract entered into: Rescissible, Voidable, Unenforceable and Null and Void.

Valid and Binding,

1. A, a minor, sold in writing his ballpen to B, a capacitated person for P 1,000. The book value o...