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LEVEL: NOTES IN BUSINESS LAW - OBLIGATIONS ( TRUE OR FALSE)QUESTIONS AND ANSWERS LISTlevel questions: Notes in Business Law - Obligations ( True or False)Question AnswerIn an obligation to give a determinate thing which is subject to a suspensive condition, the creditor has a right to the fruits of ...

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LEVEL: NOTES IN BUSINESS LAW - OBLIGATIONS ( TRUE OR FALSE) QUESTIONS AND ANSWERS LIST

level questions: Notes in Business Law - Obligations ( True or False) Question

Answer

In an obligation to give a determinate thing which is subject to a suspensive condition, the creditor has False a right to the fruits of the thing upon the perfection of the obligation. A person criminally liable is also civilly liable.

True

Obligations arising from contracts have the force of law between the contracting parties.

True

A natural obligation cannot be enforced in a court of justice.

True

A person obliged to give something is also obliged to take care of it with the diligence of a father of a False good family, unless the law or stipulation of the parties requires a greater degree of care. If the debtor fails to perform an obligation to do, the creditor may compel the debtor to comply with False the obligation. If an obligation to do has been poorly done, the creditor may have the same be undone at the expense True of the debtor. As a general rule, the debtor incurs in delay if he does not perform his obligation on the date it is due. False If the obligation consists in the delivery of a determinate thing, the debtor who incurs in delay shall not False be responsible for loss due to fortuitous event. A waiver of an action for future fraud is valid.

False

In an obligation to give an indeterminate thing, the loss or destruction of anything of the same kind will False extinguish the obligation if the cause of the loss is a fortuitous event.

Question Acts of men such as armed robbery or piracy are considered fortuitous events if they occur independently of the debtor's will.

Answer

As a general rule, rights acquired in virtue of an obligation are not transmissible

False.

An obligation subject to a resolutory condition is demandable at once.

True

True

An obligation which is subject to a suspensive condition that is potestative on the part of the debtor at False the same time, is valid. An obligation where the debtor binds himself to pay when his means permit him to do so is a conditional False obligation. An obligation which is demandable upon the death of a person is an obligation with a period.

True

The condition not to do an impossible thing shall be considered as not having been agreed upon. In such True a case, the obligation is immediately demandable. The condition that some event happen at a determinate time shall extinguish the obligation as soon as True the time expires or it has become indubitable that the event will not take place. The condition shall be deemed fulfilled if the debtor voluntarily prevents its fulfillment.

True

The effects of a conditional obligation to, give, once the condition has been fulfilled shall retroact to the day of the constitution of the obligation.

True

A thing, although it still physically exists, may be considered lost if it goes out of commerce.

True

In an obligation to give a determinate thing which is subject to a suspensive condition, the deterioration False of the thing without the debtor's fault shall render the debtor liable for damages. A condition may refer to a past event unknown to the parties.

True

If the thing is improved at the expense of the debtor before the fulfillment of a suspensive condition, the debtor may demand reimbursement of such expense from the creditor.

False

Question Answer Whenever a period is designated in an obligation, it shall be presumed to have been established for the False benefit of the debtor. The debtor does not lose the right to make use of the period if the security that he has given is lost due False to a fortuitous event. The period in an obligation always refers to the future.

True

In alternative obligations, the right of choice belongs to the creditor unless it has been expressly False granted to the debtor. In alternative obligations, the creditor may be compelled to receive part of one and part of another False undertaking. In a facultative obligation, the loss of the substitute through a fortuitous event before the substitution True has been made by the debtor, shall have no effect on the debtor's obligation to deliver the principal thing. When there are two or more debtors and/or two or more creditors in one and the same obligation, the False obligation is presumed to be a solidary obligation. Solidarity may exist although the creditors and debtors may not be bound in the same manner and by True the same periods and conditions. Where an instrument containing the words "I promise to pay", is signed by two or more persons, they are True deemed to be jointly and severally liable. In a joint indivisible obligation, a demand made by one of the joint creditors against all the joint False debtors is a valid demand. A solidary debtor who obtains remission of the whole obligation is entitled to reimbursement from his False co- debtors. A solidary creditor may assign his rights in the obligation without the consent of the other creditors.

False

If an insolvent solidary debtor cannot reimburse his share to the debtor paying the obligation, such share shall be borne by all his co-debtors in proportion to the debt of each.

True

A joint creditor in a joint indivisible obligation may validly renounce or condone the whole obligation.

False

Question In obligations with a penal clause, the penalty shall substitute the indemnity for damages and the payment of interests, if there is no stipulation to the contrary,

Answer

The nullity of the penal clause in an obligation carries with it the nullity of the principal obligation.

False

As a rule, the creditor may demand fulfillment of the obligation and the penalty at the same time.

False

Payment means not only the delivery of money but also to the performance of the obligation in any other manner. A third person who has an interest in the fulfillment of the obligation, such as a guarantor, may compel the creditor to accept payment. Payment made in good faith by the debtor to a person in possession of the credit releases him from liability. Payment made for an obligation which is interest-bearing must first be applied to the principal before the interest.

True

True True True False

Payment to an incapacitated creditor shall be valid if he has kept the payment.

True

The debtor of a thing may compel the creditor to accept a different one if the latter is more valuable than that which is due.

False

If an obligation is physically divisible, the debtor may compel the creditor to accept partial payments.

False

When the debt is in part liquidated and part liquidated, the creditor may demand and the debtor may True effect the payment of the former without waiting for the liquidation of the latter. The debtor may compel the creditor to accept a certified check as payment since the bank guarantees False the check to be covered with sufficient funds. Payment by a third person who does not intend to be reimbursed by the debtor shall be deemed to be a True donation which requires the consent of the debtor. However, even if the debtor does not give his consent, payment shall nevertheless be valid with respect to the creditor. Payment may be applied to a debt not yet due if the term was constituted in favor of the party making True the application.

Question

Answer

For dacion en pago to apply, the debtor must be insolvent.

False

In payment by cession, the creditors become the owners of the properties abandoned by the debtor for False the payment of his debts. Whenever the thing is lost while in the possession of the debtor, it shall be presumed to have been lost True through his fault. The debtor shall be released totally from his debts when he assigns his properties to his creditors. Consignation without tender of payment is sufficient if two or more persons claim the same right to collect. Before the court has declared that the consignation has been properly made or the creditor has accepted the consignation, the debtor may withdraw the sum or thing deposited in court as a matter of right. When the debt of a thing certain proceeds from a criminal offense, the debtor shall be exempted from the payment of the price if the thing is lost through a fortuitous event. In obligations to do, the debtor's obligation is extinguished if the prestation becomes physically impossible due to his fault The condonation or remission of an obligation must be accepted in order for it to be extinguished.

False True True False False True

Merger which takes place in the person of the principal debtor or creditor extinguishes the obligation of True guaranty. A debt which consists in sum of money and another debt which consists in a consumable thing are False extinguished by legal compensation as long as both debts have the same amount and are already due. The condonation of a debt in money exceeding P5,000.00 to be valid requires that the condonation and False the acceptance must be in public instrument. The remission of the principal obligation carries with it the remission of the accessory obligation.

True

Confusion which takes place in the person of the guarantor extinguishes the principal obligation

False

Question

Answer

The parties may agree upon the compensation of debts that are not yet due.

True

Legal compensation takes place by operation of law even if the debts are payable at different places.

True

Compensation cannot be set up against a creditor who has a claim for support by gratuitous title.

True

Novation may take place by changing the object or principal conditions of the obligation.

True

If the old obligation is void, the novation will still be valid if the new obligation is valid.

False

If the new obligation is void, the original one shall subsist, unless the parties intended that the old obligation shall be extinguished in any event.

True

Conventional subrogation requires the consent of the original parties and the third person.

True

When the principal obligation is extinguished as a consequence of novation, accessory obligations are extinguished except if they may benefit third persons who did not give their consent.

True

LEVEL: OBLIGATIONS (MULTIPLE CHOICE) QUESTIONS AND ANSWERS LIST

level questions: Obligations (Multiple Choice)

Question

Answer

Which of the following is not an obligation with a period? a. "Payable soonest" b. An obligation payable little by little C. Will pay you P10,000 "if I like" d. Payable "within 2 years from today" e. All of the above

c

Question

Answer

If the obligation is payable in foreign currency a. the obligation is void. b. the obligation is valid, but the stipulation is void. C. the creditor can compel the debtor to pay in foreign currency as per agreement. d. The stipulation and the obligation are void.

c

Which of the following statements is false? a. The nullity of the principal carries with it that of the penal clause. b. Proof of actual damages suffered by the creditor is not necessary in order that the penalty may be demanded. C. Iwill pay you P10.000 "soonest" is for the benefit of the debtor. d. Condonation is essentially gratuitous.

c

I'll give you my car one year after your death." The obligation is a. valid, because the event is sure to come. b. d valid, the obligation is conditional. c. Valid, but disregard the condition d. Void, not legally possible A sold his cow to B for P 2,500. No date was stipulated for the delivery of the cow. While still in the possession of O the cow gave birth to a calf. a. A is entitled to the calf because it was born before his obligation to deliver the cow arises. b. A is entitiled to the calf as B has not paid the price. c. B is entitled to c the calf which was born after the perfection of the contract d. B, in order to be entitled to the calf, should pay additional cost for the calf to be agreed upon by both parties Statement No. 1: The concurrence of more than one creditor or more than one debtor in one and the same obligation implies solidarity. Statement No. 2: In alternative obligations where the right of choice is exercised by the creditor, consent of the debtor as to the creditor's choice of which prestation to perform is necessary. b a. Both statements are true b. Both statements are false. C. Statement No. 1 is true while statement No. 2 is false d. Statement No. 1 is false while statement No. 2 is true The kind of compensation which may only be raised by the creditor and not by the debtor in the obligation to give gratuitous support: a. judicial compensation b. conventional compensation C. facultative compensation d. legal compensation

c

Statement No. 1: Legal compensation takes place by operation of law even if the parties may not be aware of it. Statement No. 2: The indivisibility of an obligation necessarily implies solidarity. a. Both statements are c true. b. Both statements are false. C. Statement No. 1 is true while statement No. 2 is false. d. Statement No. 1 is false while statement No. 2 is true.

Question Answer Statement No. 1: Responsibility arising from fraud is demandable in all obligations. A waiver of an action for future fraud is void. Statement No. 2: When the fulfillment of the condition depends upon the sole will of the a debtor, the conditional obligation shall be void. If it depends upon chance or upon the will of a third person, the obligation shall take effect in conformity with the provisions of laws. a. Both statements are true. b. Both statements are false. C. No. 1 is false, No. 2 is true. d. No 1 is true, No. 2 is false. Statement No. 1: D obliged himself to give C a specific car tomorrow. If D failed to deliver tomorrow after demand is made, C may compel D to do his obligation and may ask for damages. Statement No. 2: D obliged a himself to deliver a car to C tomorrow. If D failed to deliver tomorrow after demand is made, C's right is to ask a third person to deliver a car to him at the expense of D plus damage. a. Both are true. b. Both are false. C. No. 1 is true; No. 2 is false. d. No. 1 is false; No. 2 is true. A person obliged to give something must preserve the object using a standard of care or diligence. This standard of care or diligence may be: a. diligence provided by law. b. diligence provided by agreement of the d parties. c. diligence of a good father of the family. d. any of the above. An obligation wherein various things are due but the complete performance of all of them is necessary to extinguish the obligation. a. Facultative obligation. b. Conjoint obligation. c. Alternative obligation. d. Pure or simple obligation.

b

D1, D2 and D3 are solidary debtors of C for P30,000. The obligation was in writing. After the lapsed of the tenyear prescriptive period, which of the following statement is incorrect. a. If D1 paid C knowing that the obligation has already prescribed, D1 cannot ask reimbursement from D2 and D3. b. If D1 paid C not knowing d that the obligation has already prescribed, D1 cannot ask reimbursement from D2 and D3. C. If D1 paid C not knowing that the obligation has already prescribed, his right is to proceed against C because there was undue payment. d. None of the above. S owns specific ring and sells it to B for P10,000. B paid S the price, and S promised to deliver the ring five (5) days after. After the sale, S gets a loan from X and pledged the ring in a private instrument. Statement 1Between B and X, B has got a better title because the pledge did not appear in a public instrument. Statement c 2- However, if S delivers the ring to X, X will have a better title because there was delivery. a. Both are true. b. Both are false. C. No. 1 is true; No. 2 is false. d. No. 1 is false; No. 2 is true. S sold to B a specific car for P10,000 and promised to deliver on December 25, 2010. The next day, after the sale is made, he sold the same car to X and delivered it to X on the same day. If no delivery is made by S to B d on December 26, 2010, which of the following is correct? a. S is not in default because there was no demand.

Question Answer b. B can cancel the contract between S and X because the contract of S and B was perfected ahead of X. C. S is liable to B for the value of the car plus damages. d. S is in default, even if there was no demand. Hence, he will answer for damages. Change of persons or objects: a. Confusion b Novation C. Solutio indebiti d. None of the above

b

Statement No. 1: In solutio indebiti, the contract of the parties is the basis for damages in case of nonperformance. Statement No. 2: "Dolo", as a ground for awarding damages, is the deliberate intention to cause d damage or injury to another person. a . Both are true. b. Both are false. c. No. 1 is true; No. 2 is false. d. No. 1 is false; No. 2 is true. Statement No. 1: "I will give you a specific car if you will not marry X this year (2010). If by the end of 2010, both parties are alive and no marriage has taken place, my obligation is extinguished. Statement No. 2: "I will give you P10,000 if you cannot make a dead man alive. This is an impossible condition, obligation not demandable. a. Both are true. b. Both are false. , C. No. 1 is true; No. 2 is false. d. No. 1 is false; No. 2 is true.

b

A, B and C are joint debtors of joint creditors W, X, Y and Z in the amount of P300,000. How much can W and d X collect from B? a. P 75,000 b. P150,000 c P100,000 d. None of the above

Which of the following is considered as quasi-contract? a. Solutio indebiti. b. When the third person, without the knowledge of the debtor, pays the debt. c. Reimbursement due the person who saved property during fire d or storm without the knowledge of the owner. d. All of the above. Statement No. 1: The receipt of the principal obligation without reservation as to the payment of interest shall raise a conclusive presumption that the interest is also paid. Statement No. 2: The receipt of the latter installment of a debt without reservation as to prior installment, shall not raise a conclusive presumption that d the prior installment is also paid. a. Both are true. b. Both are false. C. No. 1 is true; No. 2 is false. d. No. 1 is false; No. 2 is true. Statement No. 1: If the obligation does not fix a period, but from its nature and the circumstances, it can be d

Question inferred that a period was intended, the court may fix the duration thereof. Once it is fixed by the court, the parties cannot change the fixed date for performance. Statement No., 2, "I will give you P10,000 as Soon as possible." This is an obligation with a period for the benefit of both the debtor and creditor. a. Both are true. b. Both are false. c. No. 1 is true; No. 2 is false. d. No. 1 is false; No. 2 is true. Example No. 1: D obliged himself to give C P10,000. However, the day before the obligation falls due, D's apartment was completely gutted by accidental fire. There is no question that the money was also razed by fire. The obligatlon of D is totally extinguished because of fortuitous event. Example No. 2: D obliged himself to pay C P10,000 with 6% interest. On the due date, D tendered P10,000 with a promise to pay the P600 interest the day after. If C refused to accept, he can...