Test bank - Law on Sales PDF

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CPARQUIZ- Business Law and Taxation As a rule, this contract of sale involving a piece of land is void, A. Between a minor and a capacitated person. B. Between two insane persons who did not act during lucid interval C. Between first degree cousins D. Between husband and wife X, 17 years old, sold t...

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CPAR

QUIZ- Business Law and Taxation

1. As a rule, this contract of sale involving a piece of land is void, A. B. C. D. 2.

Between a minor and a capacitated person. Between two insane persons who did not act during lucid interval Between first degree cousins Between husband and wife

X, 17 years old, sold to Z, of legal age, her necklace worth P20,000 for P15,000. Later, Z sold the necklace to Y for P20,000. Which of the following statements is correct? A. X has got a voidable title because at the time of sale, she is a minor B. X can ask for rescission of the sale to Y because she suffered a lesion of more than ¼ of the value of the property. C. If Y is in bad faith, Y becomes the owner of the necklace upon delivery to him but his title is voidable. D. X can ask for the annulment of the sale to Y because at the time of sale she is a minor.

3. This serves as a proof of the perfection of the contract of sale A. B. C. D.

Dacion en pago Option money Delivery Arras

4.A contract of sale is not a(an) A. B. C. D.

Onerous contract Accessory contract Commutative contract Bilateral contract

5.Warranty against hidden defects is A. B. C. D.

An essential element A natural element An accidental element An artificial element

7. When a sale of a piece of land or any interest therein is through an agent, the authority of the agent shall be in writing, otherwise the sale is A. B. C. D.

Valid Voidable Unenforceable Void

8. The sale of an expected thing A. Dacion en pago B. Payment by cession C. Emptiospei

D. Emptio rei-speratae 9. The sale of the hope itself A. B. C. D.

Dacion en pago Payment by cession Emptio spei Emptio rei-speratae

10. One of the following is not correct A. Things subject to a resolutory condition may be the object of the contract of sale. B. A thing is generic when it is particularly designated or physically segregated from all others of the same class. C. Things having a potential existence may be the object of the contract of sale. D. The sole owner of a thing may sell an undivided interest therein 11. X needs a size of 10 of model 101 of Leather Shoes regularly available to the public for her boyfriend Z, but the same is out of stock so she placed an order for one. On the other hand, Z placed an order for size No. 8, colored violet, (something not ordinarily made by the company) to be given to X. Which is correct? A. B. C. D.

Both are contracts of sale Both are contracts for a piece of work First is a contract of sale second is a contract for a piece of work First is a contract for a piece of work, second is a contract of sale

12. V offered to sell for P12,000,000 her house and lot to DD who was interested in buying the same. In her letter to DD, V stated that she is giving DD a period of one month within which to raise the amount and that as soon as DD is ready, they will sign the deed of sale. Five days before the expiration of the one month period. V went to DD and told her that she is no longer willing to sell the property unless the price in increased to P15,000,000. Which is correct? A. B. C. D.

DD may compel V to accept the P12,000,000 first offered. V may compel DD to pay P15,000,000 V and DD should shoulder the P3,000,000 difference DD cannot compel V to accept the P12,000,000 first offered

13. If the object of the contract is specially made or manufactured at the specific order of another, it is a contract for a piece of work. This is A. B. C. D.

English rule Massachusetts rule New York rule Chicago rule

14. If the article already exists and subsequently acquired by another, it is a contract of sale, and if the article is still to be manufactured at the instance of another, it is a contract for a piece of work. This is A. B. C. D.

English rule Massachusetts rule New York rule Chicago rule

15. If the material used in the manufacturer of the article is more valuable, it is a contract of

sale, and if the labor or skill is more valuable than the material used in the manufacture of the article, it is a contract for a piece of work. This is A. B. C. D.

English rule Massachusetts rule New York rule Chicago rule

16. The rule observed in the Philippines is A. B. C. D.

English rule Massachusetts rule New York rule Chicago rule

17. The Realty Installment Buyer Protection Act applies to all transactions involving the sale or financing of real estate on installment but it excludes the following except: A. B. C. D.

Sale or financing of industrial lots Sale or financing of commercial building Sale to tenants under the Land Reform Code Sale of residential condominiums

18. Delivery by merely pointing to the object of sale if it cannot be delivered to the vendee at the time of the sale is A. B. C. D.

Traditio longa manu Traditio brevi manu Traditio constitutum possessorium Traditio symbolica

19. Effected when the object of sale is already in the possession of the vendee at the time of sale so that delivery need no longer be made is A. B. C. D.

Traditio longa manu Traditio brevi manu Traditio constitutum possessorium Traditio symbolica

20. When the owner of the thing sells it to vendee, but continues to have possession or occupation of the thing not as owner but as tenant or lessee A. B. C. D.

Traditio longa manu Traditio brevi manu Traditio constitutum possessorium Traditio symbolica

21. Goods are deemed in transit A. When the buyer accepts delivery of the goods upon arrival at destination B. When the buyer intercepts and lawfully takes possession of the goods at any point before destination. C. From the time they are delivered by the seller to a common carrier or other bailee for transmission to the buyer, up to the time that the buyer or his agent takes delivery of the goods from the carrier or bailee.

D. When the carrier or bailee, upon arrival of the goods at destination acknowledges to the buyer or his agent that he is holding the goods as bailee for the latter. 22. Goods are deemed no longer in transit A. If the goods are rejected by the buyer for a valid reason and the carrier or other bailee continues in possession of them, even if the seller has refused to receive them back. B. From the time they are delivered to a carrier by land, water or air for the purpose of transmission to the buyer. C. From the time they are delivered to a bailee for the purpose of transmission to the buyer until the buyer or his agent in that behalf, takes delivery of them from such bailee. D. If the carrier or other bailee wrongfully refuses to deliver the goods to the buyer or his agent in that behalf. 23. X sold to V orally a parcel of land for P200,000. X effected the delivery of the land. The payment of the price was to be made three month later. At the end of three month period A. B. C. D.

V may refuse to pay claiming in his defense the Statute of Frauds V may return the parcel of land to X X can collect from V because the contract has already been executed V may refuse to pay on the ground that there is no written contract to support the sale.

24. On January 15, 2010, X sold for P2M her house and lot to V. It was agreed that delivery of the house and lot, and the payment therefore, would be made on March 10, 2010. Unfortunately, Z a stranger negligently set the house on fire on February 25, 2010, and the house was completely destroyed. Which is correct? A. V is not required to pay the P2M since the contract had no subject matter. B. X must still deliver the lot but is excused from delivering the house, while V must still pay the P2M C. X must deliver the lot while V should pay only the amount equivalent to the value of the lot. D. X need not deliver the lot while V need not pay the P2M 25. If immovable property should have been sold to different vendees, the ownership shall be transferred to the person A. B. C. D.

Who have first taken possession in good faith Who presents the oldest title in good faith Who in good faith first recorded it in the Registry of Property Who have paid in good faith the purchase price in full

26. Using the preceding number, if movable property, it shall belong to the person A. B. C. D.

Who have paid in good the purchase price in full Who in good faith first recorded it in the Registry of Property Who presents the oldest title in good faith Who have first taken possession in good faith

27. Action by the vendee against the vendor to nullify the sale due to some vices or defects which render the object of sale unfit for the use intended or knowledge of which the vendee should not have bought the thing A. B. C. D.

Accion quanti minoris Accion reinvidicatoria Accion pauliana Redhibilitory action

28. Action to seek a corresponding reduction in price by reason of some vices or defects in the thing purchased A. B. C. D.

Accion quanti minoris Accion reinvidicatoria Accion pauliana Redhibilitory action

29. The redhibitory action based on the faults or defects of animals must be brought within A. B. C. D.

30 days from delivery to the vendee 40 days from delivery to the vendee 45 days from delivery to the vendee 6 months from delivery to the vendee

30. In contract of sale, if the price is absolutely simulated, the sale is A. B. C. D.

Unenforceable Voidable Void Rescissible

31. In a contract of sale, of personal property, the price of which is payable in installments, the vendor may exercise any of the following remedies, except A. Exact fulfillment of the obligation, should the vendee fail to pay any installment B. Cancel the sale, should the vendee’s failure to pay cover two or more installment C. Foreclose the chattel mortgage on the thing sold, if one has been constituted should the vendee’s failure to pay cover two or more installments D. Rescind the sale should the vendee fail to pay any installment. 32. The right of the seller to stop goods in transit, upon discovering that the buyer does not have the funds to pay for the goods A. B. C. D.

Pre-emptive right Appraisal right Voting right Right of stoppage in transit

33. A sold to B a parcel of land for P3.8M. The sale is evidenced by a memorandum of agreement of sale written in the Bicolano dialect. One week later, A sold the same parcel of land to C for P4M. This is evidenced by a formal deed of sale. Upon buying the property, C, who was aware of the first sale immediately took possession of the lot. When informed of the second sale, B subsequently registered an adverse claim to the property. Later, C registered the deed of sale in her favor. The parcel of land shall belong to A. B. C. D.

B because he has got an older title C because he is the first to register C because he is the first to take possession No one as both sales are void

34. Voluntary renunciation made by the buyer of his right to warranty against eviction where in case the buyer is evicted, the seller is liable to the value of the thing at the time of eviction. A. Waiver intentionada

B. Waiver consciente C. Waiver cursunada D. Waiver inocente 35. Using the preceding number, where the seller is no longer liable A. B. C. D.

Waiver intentionada Waiver consciente Waiver cursunada Waiver inocente

36. A contract of sale whereby the seller acquires the right to redeem or repurchase the object of the sale from the buyer within a certain period agreed upon A. B. C. D.

Equitable mortgage Absolute sale On sale or return Pacto de retro sale

37. A sold to B his car and promised to deliver ten days later. The next day, after the sale to B, A sold the same car to C and immediately affected delivery. On the day agreed upon, A did not deliver the car to B. Which is correct? A. B can cancel the contract between A and C, because the contract between A and B was perfected ahead of the contract between A and c B. B should make the demand to make A in default C. A is liable to B for the value of the car plus damages after B makes a demand D. A is liable to B for damages and is in default without need of any demand 38. X sold to V her Yamaha organ. It was agreed that X would fix the price a week later. At the agreed time, X named the price P10,000. V agreed. Was the sale perfected? A. B. C. D.

No, because the price was left to the discretion of one of the contracting parties No, because at the time of sale the price was not fixed Yes, because the price fixed by one of the parties was accepted by the other Yes, because there was agreement that X would fix the price

39. Not an implied warranty in a contract of sale A. B. C. D.

Right to sell the thing at the time of perfection of the contract Reasonably fit for the purpose they are acquired Merchantable in quality Free from charges or encumbrances not declared or known to the buyer

40. After the death of C, A, C’s son, sold his inheritance though its amount has not yet been determined to B for a consideration of P1,000,000. Which is correct? A. The contract is valid if the value of inheritance is at least equal to P1,000,000 B. The contract is valid even though the inheritance to be turned over to B is less than P1M C. The contract is void as future inheritance cannot be the object of sale D. The contract is unenforceable 41. X stole a fountain pen from P and sold it to Z Merchandise, a “store for pens”, which paid for it in good faith, not knowing it was stolen. The “store” then sold it to C, a student.Which is correct?

A. C cannot be considered as the owner because the original seller (X) is not the real owner. B. P may recover the fountain pen from C without reimbursement because he is the legal owner. C. C became the owner because he purchased the pen from a merchant store D. C became the owner regardless of whether the seller is a store for pens or not because C bought it in good faith. 42. When goods are delivered to the buyer on “sale or return” for period of seven days, ownership of the goods passes to the buyer A. B. C. D.

Upon perfection of the contract Upon acceptance by the buyer of the offer of the seller Upon expiration of seven days Upon delivery of the goods

43. Quasi-traditio is equivalent to A. B. C. D.

Traditio longa manu Traditio brevi manu Traditio constitutum possessorium Execution of a public instrument

44. Vi imported radios from Taiwan and asked for 220 volts radios. The radios arrived clearly labeled 220 volts and Vi sold them to the public as such. Later the customer complained that the radios have been mislabeled by the manufacturer and that they were good only for 110 volts. As a consequence A. B. C. D.

Vi is liable to the vendees for any hidden defects even though he is not aware. Vi is not liable because he is in good faith Vi is not liable under the principle of “caveat emptor” or let the buyer beware The vendees may hold the manufacturer liable but not Vi because Vi specifically asked for 220 volts

45. If the redemption is to be made by the seller, one of the following need not be given to the Buyer A. B. C. D.

Expenses of the contract Interest on the price of the sale Necessary expenses on the thing sold Price of the sale

46. Not an element of the sellers right of stoppage in transit A. B. C. D.

The goods must be in transit The buyer must be insolvent The seller must be in possession of the goods The seller must be unpaid

47. A sold his only car to B for P300,000 to be paid as follows: P150,000 upon delivery of the car to B and the balance at P10,000 per month until full payment of the purchase price. Later the car gets burned in the possession of B through fortuitous event and without B’s fault, before full payment of the balance. Is B obliged to pay the balance? A. No, because the car was lost through fortuitous event and without B’s fault, hence B’s obligation is extinguished. B. No, because the loss should be borne by the seller as this an installment sale so until the buyer pays the full amount of the price of the sale, A remains to be the owner....