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Summary

Contract A real contract has the following essential elements: a) Consent of the contracting parties, object certain and cause or consideration b) Consent of the contracting parties, object certain and cause or consideration and delivery of the object c) Consent of the contracting parties, object ce...

Description

Contract 1.

A real contract has the following essential elements: a) Consent of the contracting parties, object certain and cause or consideration b) Consent of the contracting parties, object certain and cause or consideration and delivery of the object c) Consent of the contracting parties, object certain and cause or consideration and formalities required by law d) Consent of the contracting parties, object certain, delivery of object and formalities required by law

2.

Meeting of the 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) Consent c) Contract d) Stipulation

3.

Elements that accompany with certain contracts unless set aside or suppressed by the parties are known as: a) Natural Elements b) Accidental Elements c) Essential Elements d) Original Elements

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9.

One of the following is a natural element of a sales contract a) Terms of Payment b) Rate of Interest c) Place of Delivery d) Warranty against eviction A contract where both parties are required to do or give something is known as a: a) Bilateral Contract b) Unilateral Contract c) Gratuitous Contract d) Commutative Contract Contracts may take effect only between the contracting parties, their assigns and heirs, except in cases where the obligations and rights arising from the contract are not transmissible by nature, or by stipulation or provision of law. This principle of contract is known as: a) Relativity of Contracts b) Mutuality of Contracts c) Obligatory force of Contracts d) Liberty of Contract A contract may be enforced by or against a third person, except: a) In the case of stipulation pour atrui b) When a third person includes another to violate his contract c) In case of contracts intended to defraud creditors d) When the benefit of a third person is merely incidental Obligations arising from contracts have the force of law between the contracting parties and should be complied in good faith. From perfection, the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. This is known as the principle of: a) Consummation of Contract b) Consensuality of Contract c) Obligatory force of contract and compliance in good faith d) Mutuality of Contracts One of the following is not a real contract a) Pledge b) Commodatum

10. 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) Consent d) Cause 11. On June 1, 2018. S offered to sell his only car to B for P100,000. B accepted the offer by mailing his letter of acceptance on June 10, 2018. On June 12, 2018, B revoked his previous acceptance and mailed his letter of revocation on the same date. S received the letter of acceptance on June 15, 2018. a) The contract was perfected on June 14, 2018 when S received B’s letter of acceptance. b) The contract was not perfected because at the time the acceptance was received, the parties are no longer of one mind. c) The contract was perfected on June 10, 2018 when B sent his letter of acceptance. d) The perfection of the contract retroacts to June 1, 2018 when the offer was made. 12. Three of the following instances will render an offer ineffective before acceptance is conveyed. Which one will not? a) Civil interdiction of either party Insolvency of either party b) Insanity of either party c) Intoxication of either party 13. On July 1, 2018, Serrano offered to sell his only Mercedes Benz car for P1,000,000 to Benitez who was interested in buying the same. In his letter to Benitez, Serrano stated that he was giving Benitez up to July 31, 2018 to make up his mind whether to buy the car or not. On July 25, 2018, Serrano personally went to Benitez to inform him that he was no longer willing to sell the car unless the price was increased to P1,400,000 because another buyer was interested in buying the car for the said amount of P1,400,000.

a) b)

c) d)

Benitez may compel Serrano to sell to him the car for P1M. Serrano may validly withdraw his offer to Benitez because the option was not founded upon a consideration. Serrano may not withdraw his offer until the lapse of the option period that he gave to Benitez The increase in the price made by Serrano was not valid because it was made within the option period.

14. A contract entered into by incapacitated person is: a) Void b) Voidable c) Rescissible d) Unenforceable 15. A contract entered into in a state of drunkenness of during hypnotic spell are: a) Valid b) Voidable c) Rescissible d) Void 16. Aside from fraud and undue influence, the following are the vices of consent, except: a) Violence b) Intimidation c) Mistake d) Dealer’s talk 17. It involves the employment of serious or irresistible force to obtain consent. a) Intimidation b) Threat c) Violence d) Moral Coercion 18. Fraud exist in three of the following. Which is the

c) d)

Deposit Sale

exception?

a)

b) c)

d)

When through the insidious words or machinations of one of the contracting parties, the other is induced to enter into a contract which, without them, he would not have agreed to. When there is a failure to disclose facts, when there is duty to reveal them, as when the parties are bound by confidential relations. When there is an expression of an opinion by an expert which turned out to be wrong, and the other party relied upon such expert knowledge. When the misrepresentation refer to the usual exaggerations in trade, and the other party had an opportunity to know the facts.

19. An absolute simulated contract is: a) Void b) Voidable c) Valid d) Enforceable

27. One of the following may not annul a voidable contract, a) The party whose consent is vitiated by violence, intimidation, mistake, fraud or undue influence b) The incapacitated person when he attains capacity. c) The guardian, during the ward’s incapacity d) The party who is capable of entering into a contract. 28. The following contracts are unenforceable, except: a) Those entered into by one who has no authority or legal representation b) Those that do not comply with the Statute of Frauds c) Those where both parties are incapable of giving consent to a contract d) Those where the consent of a party is vitiated by violence, intimidation, mistake, fraud or undue influence

20. One of the following statements does not pertain to a relatively simulated contracts. a) The parties conceal their true agreement b) The parties are bound by their real agreement provided it does not prejudice third persons c) The parties are bound by their real agreement provided it is not contrary to law, morals, third persons, public order or public policy d) The parties do not intend to be bound at all.

29. The Statute of Frauds applies only to: a) Wholly executed contracts b) Contracts wholly or partially executed on the part of the debtor c) Contracts wholly or partially executed on the part of the creditor d) Wholly executory contracts.

21. A contract whose cause is the promise of a thing or service by the other party is: a) An onerous contract b) A gratuitous contract c) A lucrative contract d) A remuneratory contract

30. D was driving on his way to Manila from the province when he suffered a busted fire. Not having any spare tire, he went to a nearby car spare parts store to buy a new tire. However, he did not have sufficient money with him so he phoned G, his friend, who happened to know the S, the owner. G then instructed D to give S the telephone through which G told S “Don’t worry. If D cannot pay, just charge me.” D was thus able to buy a new tire for P6,000 fir which S issued D a sales invoice.

22. A contract whose cause is the liberality of the benefactor is: a) a gratuitous contract or contract of pure beneficiary b) a remuneratory contract c) an aleatory contract d) an onerous contract

a) b) c) d)

23. One of the following is not a requisite of cause in a contract. Which is it? a) It must exist. b) It must be lawful. c) It must not be false. d) It must be clearly stated in the contract. 24. The defective contracts arranged according to the degree of their defectiveness from the least defective to the most defective are: a) Voidable, rescissible, unenforceable, and void contracts b) Rescissible, unenforceable and void contracts c) Rescissible, voidable, unenforceable, and void contracts d) Unenforceable, rescissible, voidable, and void contracts

If D cannot pay, S can proceed against G to make good his promise to pay D’s debt G’s promise cannot be enforced against him because he did not execute any writing for the guaranty he made S can enforce G’s promise to answer for D’s debt since the guaranty was witnessed by D S can enforce G’s promise because there was a writing of some kind, the invoice for the sale of the tire.

31. The following contracts are void or inexistent, except: a) Those whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy. b) Those which are absolutely simulated or fictitious c) Those whose cause or object did not exist at the time of the transaction d) Those where one of the parties employed fraud to obtain the consent of the other

25. The following are the requisites of a rescissible payment, except: a) The debt is already due b) The debtor is insolvent c) The debtor pays the debt d) The payment is not yet due

32. If the illegal contract between the parties is a criminal offense and both parties are guilty (in pari delicto), such illegal contract shall produce the following effects, except: a) The parties shall have no right of action against each other b) Both parties shall be criminally prosecuted c) The effects and instruments of the crime will be confiscated in favor of the government d) The parties may recover what they have give, if it is not illegal in itself

26. One of the following statements concerning ratification of a voidable contract is false. Which is it? a) Ratification extinguishes the action to annul voidable contract b) Ratification cleanses the contract from all its defects from the moment it was constituted c) Ratification requires the conformity of the party who has the right to bring the action for annulment d) Ratification may be made by the guardian of the incapacitated person, or the party whose consent

33. If the contract is illegal but it does not constitute a criminal offense and only one party is guilty, such illegal contract shall produce the following effects, except: a) The guilty party cannot recover what he has given b) The guilty party cannot ask for the fulfillment of what has been promised him. c) The innocent party cannot be compelled to comply with his promise d) The innocent party cannot demand the return

was vitiated

of what he has given

d)

34. The following contracts are required to appear in a public document for the convenience of the parties so that they may be registered into the proper recording office, except: a) Contracts which have for their object the creation of real rights over immovable property b) The acceptance of an inheritance c) The power to administer property d) The cession of actions or rights proceeding from an act, appearing in a public document 35. Reformation of instruments has the following requisites, except a) There must be meeting of the minds of the parties to the contract b) The true intention of the parties is not expressed in the instrument c) The failure of the instrument to express the true intention of the parties is due mistake, fraud, inequitable conduct or accident d) The contract must be in a public instrument 36. As a rule, a contract of sale is perfected: a) Upon compliance with the instrument of the law as to form b) Upon delivery of the object of the contract c) Upon the meeting of the minds on the thing which is the object of the contract and upon the price d) Upon demand 37. Reformation is not available in the following cases, except: a) Simple donations inter vivos wherein no condition is imposed b) Wills c) When the real agreement is void d) When through the ignorance, lack of skill negligence or bad faith on the part of the person drafting the instrument or of the clerk or typist, the instrument does not express the intention of the parties 38. A contract of sale is not a: a) Principal contract b) Nominate contract c) Consensual contract d) Real contract 39. D insured his house against fire with C Insurance Company. The insurance policy which was prepared and printed by C Insurance Company was signed by D after reading its terms. You are to determine which of the following characterize the contract between D and C Insurance Company. I. Auto-contract II. Contract of adhesion III. Aleatory contract IV. Nominate contract The contract between D and C Insurance Company is: a) I, II and III b) II, III and IV. c) I, II and IV d) I, III and IV 40. Nadya, a woman, agreed to live with Hayme, a man as the wife of Hayme without the benefit of marriage in exchange for the monthly support of P10,000 that Hayme would give to Nadya. Both Hayme and Nadya are single, of legal age, and there is no legal impediment for them to get married. Their parents have no objections to the two getting married. Based on the foregoing information, which of the following statement is true?

a)

b) c)

The agreement between Hayme and Nadya is valid because they can legally get married if they want to. The agreement between Hayme and Nadya is void for being contrary to morals Hayme may legally demand that Nadya live with him as his wife.

Nadya may legally demand that Hayme give her the monthly support of P10,000 that he had promised. 41. Which of the following contracts is rescissible? a) Contracts entered into during a hypnotic spell b) Contracts entered into in a state of drunkenness c) Contracts entered into to defraud creditors when the latter cannot collect the claims due them d) Contracts where both parties are incapable of giving consent 42. A, duly authorized agent of P, wrote a letter to B on August 1, 2018 offering to sell P’s only Mercedes Benz car for P200,000 cash. On August 3, 2018, B wrote a letter to A stating that he was accepting all the terms of the offer, which letter was received by A on August 5, 2018. Before A could relay such acceptance to P, P died in a vehicular accident on August 6, 2018.

a) b) c) d)

The contract was not perfected because P, the real party to the sale, died before the acceptance came to his knowledge The contract was perfected on August 1, 2018 The contract was perfected on August 3, 2018 The contract was perfected on August 5, 2018

43. The cause of a contract differs from the motive of each party to the contract in that motive: a) b) c) d)

Is an essential element of a contract Although illegal, does not affect the validity of the contract Is always known by the other party When illegal will render the contract void.

44. P is a minister of a certain church whose members include X. X regularly confides in P because of his many personal problems. P is interested in buying the lot of X and uses his position as elder of the church and confidant of X to convince X to sell to him the lot. Should X sell the lot to P by reason of P taking advantage of his confidential relationship with X, the contract between them would likely be voidable because of

a) b) c) d)

Intimidation Undue influence Fraud Mistake

45. S convinced B to buy a gold-plated bar which S told B was made of pure gold. B bought the thing believing that it was really made of pure gold. The contract between S and B is: a) Valid b) Voidable c) Rescissible d) Void 46. D, out of his love and affection for C, donated a parcel of land to the latter who accepted it. The formalities required by law were complied with. The contract between D and C is: a) Onerous contract b) Gratuitous contract c) A remuneratory contract d) An accessory contract 47. The cause of the contract in the previous number is: a) The parcel of land b) The acceptance of the donation by C c) The generosity of D d) The contract has no cause because C did not give any consideration to D. 48. B bought a baby boy from S. B knew that the baby boy was his illegitimate son by a woman named, W, and which W sold to S. The contract between B and S is: a) Valid b) Void c) Unenforceable d) Voidable 49. The stages of a contract according to the order of their occurrence are:

a)

Birth, conception and consummation

b) c) d)

Conception, consummation and birth Conception, birth and consummation Consummation, conception and birth

50. They refer to particular stipulations of the parties in a contract a) Accidental elements b) Natural elements c) Inherent elements d) Essential elements 51. The cause of the contract in Number 106 is: a. the parcel of land. b. the acceptance of the donation by C. c. the generosity of D. d. the contract has no cause because C did not give any consideration to D. 52. Which of the following contracts is valid, enforceable and would not require any further act for the convenience of the parties other than its registration with the proper government office? a. Oral sale of a piece of land made through an agent whose authority is in a public instrument. b. Sale of a piece of land in a public instrument made through an agent whose authority was given orally by the principal. c. Sale of a piece of land in a private instrument made through an agent whose authority is in a public instrument. d. Sale of a piece of land in a public instrument made through an agent whose authority is in a public instrument.

c. An oral lease of a mining equipment for more than two years. d. An oral contract of sale of a ring worth P450,000 between an insane and a minor. 57. S and B entered into a contract where they made it appear that S sold to B a parcel of land worth P50,000.00. In reality, however, S borrowed from B P50,000.00 with S mortgaging the parcel of land as security for the debt. a. S and B are bound by the contract of loan and mortgage. b. S and B are bound by the contract of sale. c. S and B are not bound at all. D. S and B are bound by the contract of loan and mortgage if third persons are affected. 58. S, a store owner, hired the services of E as a clerk in the store at the minimum wage. E began to work immediately although no employment papers were signed by S and E. After 1 year and 2 months without E receiving any compensation except free meals and lodging, E demanded payment from S. S refused to pay E on the ground that their contract was unenforceable not being in writing and that the employment already lasted more than a year.

a. The contract is unenforceable because it is not in writing and it has already been one year from the time it was entered into. b. The contract is valid and enforceable although not in writing. c. The contract is void because an employment contract must be in writing to be valid. d. The contract is rescissible because E suffered damages by the reason of non-payment of his compensation.

53. S sold his only horse to B for P30,000.00. The parties agreed that S shall deliver the horse one week from the execution of their agreement. B, however, is required to pay the price immediately in certified check. In the place of S and B, it was the custom that anyone selling a horse should place a horseshoe on its hooves. However, this was not stated in the agreement including how the horse would be cared for before delivery.

a. S is not obliged to place a horseshoe on the horse although it was th...