PALAWAN STATE UNIVERSITY

COLLEGE OF BUSINESS AND ACCOUNTANCY

BSA Fourth Year Block No. 1
Mid-term Examinations
SALES, AGENCY & OTHER COMMERCIAL LAW (PART I)
Prof.: Atty. Emilia Concepcion D. Severino
INSTRUCTIONS:

Write your answers on a separate sheet of paper.

Do not write at the back of the answer sheet.
Write your answer briefly and consicely.
Submit the answer sheet together with this test questionnaire.

I.

MULTIPLE CHOICE: Choose the best answer

1.

The period when the minds of the seller and the buyer have met on the
subject matter and the cause of the contract of sale is:
a.
Negotiation of the sale
b.
Consensus of the sale
c.
Consummation of the sale
d.
Perfection of the sale

2.

One
a.
b.
c.
d.

3.

Gladys transferred to Joy ownership of a watch the value of which is

P100,000; Joy will give Gladys P30,000 in cash and her car worth P70,000.
What kind of contract is this?
a.
Lease contract
b.
Contract of sale
c.
Obligation to sell
d.
Barter

4.

A contract of sale is not necessarily:

a.
a principal contract
b.
commutative
c.
bilateral
d.
an onerous contract

5.

A sale is distinguished from dation in payment, that in sale:

a.
there is a pre-existing obligation or credit
b.
the cause as to the seller is the promise to pay the price
c.
it is a mode of extinguishing an obligation in the form of payment
d.
delivery is required for its validity

6.

A contract of sale is not:

a.
bilateral

of the following is not a remedy granted to an unpaid seller

Right of stoppage of goods in transit
Right of lien over the goods
Right of resale
Right to demand security for the payment of the price

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b.
c.
d.

gratuitous
consensual
nominate

7.

A characteristic of contract of sale which involves exchange of value:

a.
commutative
b.
nominate
c.
bilateral
d.
consensual

8.

Which of the following may not be the object of a valid contract of sale?
a.
things having a potential existence
b.
a vain hope or expectancy
c.
future goods
d.
a road

9.

The guardian purchased the property of his ward. The contract is:
a.
valid
b.
rescissible
c.
void
d.
unenforceable

10.

The following are requisites for a valid exercise of the right of stoppage in
transit, except:
a.
the seller is unpaid
b.
the goods are in transit
c.
the seller has not parted with the possession of the goods
d.
the buyer is insolvent

11.

In a contract of sale, a warranty against eviction is:

a.
an essential element
b.
a natural element
c.
an accidental element
d.
a formal requirement

12.

The following are the alternative remedies, except one available to the
buyer in case of breach of warranty by the seller:
a.
keep the goods and ask for damages
b.
refuse to accept the goods and ask for damages
c.
rescind the sale and retain the goods
d.
keep the goods and set up against the seller by way of recoupment in
price.

13.

Which of the following statements is true and correct?

a.
In a contract of sale the full payment of the price is in the nature of
suspensive condition in that the seller is obligated to transfer
ownership of the thing sold;
b.
the seller need not be the owner of the thing sold at the perfection of
the sale;

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c.
d.

there may be a transfer of ownership over the thing even if the seller
has not delivered the thing sold to the buyer;
in a contract of sale the buyer becomes the owner of the thing sold
upon full payment of the purchase price.

14.

The following are ways of effecting constructive delivery, except:

a.
by the execution of a public instrument
b.
traditio symbolica
c.
real delivery
d.
quasi-traditio

15.

In contract of sale of personal property the price of which is payable in

instalments, the vendor may exercise the any of the following remedies,
except:
a.
exact fulfilment of the obligation, should the vendee failed to pay;
b.
cancel the sale, should the vendees failure to pay cover two or more
instalments;
c.
the vendor may still pursue further action against the vendee to
recover any unpaid balance in case of foreclosure of chattel
mortgage;
d.
foreclose the chattel mortgage on the thing sold, if one has been
constituted should the vendees failure to pay cover two or more
instalments.

16.

When goods are delivered to the buyer on sale or return, for a period of
seven (7) days, ownership of the goods passes to the buyer,
a.
upon delivery of the goods
b.
upon expiration of seven (7) days
c.
upon acceptance by the buyer of the offer of the seller
d.
upon perfection of the contract

17.

Marta offered to sell her 2014 model car to Josie for price certain but the
latter told her that she will decide to buy within three days. At around
9:00am of the third day, Marta sent a letter to Josie withdrawing her offer
while Josie, on the same day around 3:00pm, informed Marta through a
messenger that she was accepting the offer.
Marta received Josies
acceptance in the morning of the fourth day while Josie received Martas
withdrawal in the afternoon of the same day. Is there a perfected contract
of sale?
a.
there is because the offer was accepted
b.
there is none since there is no consideration given for the exercise of
the option whether to buy the car or not
c.
there is none since when the offer was accepted it was no longer
existing
d.
there is since the offeror received first the acceptance than the
offeree who received the withdrawal of the offer later in the day

18.

Bruno delivered to Barbero for safekeeping 100 boxes of branded shirts, In

the due course of his business, Barbero charged Bruno a certain fee and
issued a receipt for the goods setting forth the terms and conditions of their
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contract. The receipt obligated Barbero to deliver the goods to the bearer
of the receipt. Mars stole the receipt from Bruno and sold and delivered it
to Mika for fair market value. Mika was not aware of the theft. Mika
specifically indorsed and delivered the receipt to Emo, who in turn delivered
it to Fe. Fe presented the receipt to Barbero to claim the goods. Can
Barbero refuse to deliver?
a.
No, because Fe holds a bearer receipt
b.
No, because Fe and Emo were buyers in good faith and for value
c.
Yes, because Fe had no title to the goods
d.
Yes, because Emo did not indorse the receipt
19.

The diamond ring of A was stolen by B who sold the same to C, a merchant
store owner. D bought the ring from the store of C. Can A recover the ring
from D?
a.
No, because D purchased the ring in good faith from a merchant store
b.
Yes, because A was unlawfully deprived of the ring, without
reimbursing D for the price paid by D to C
c.
Yes, but A has to reimburse D the price he paid to C
d.
No, because D is an innocent purchaser for value

20.

The contract of sale between A, a minor, who purchased a car from B, of

legal age, is:
a.
voidable and may be annulled by A
b.
void
c.
unenforceable
d.
voidable and may be annulled by B or A

21.

Mr. Seller offered a parcel of land to Mr. Buyer No. 1 under a contract to sell.
Subsequently, Mr. Seller sold the same land to Mr. Buyer No. 2 who paid the
price. After a couple of days, Mr. Buyer No. 1 paid the price. Which is
correrct?
a.
the one with a better right is Buyer No. 2
b.
Mr. Seller has done a double sale
c.
The one with the better right is the buyer who registers the sale first
in good faith
d.
there is no double sale

22.

Andrea wrote Beranrdo a letter offering to sell a piece of land. Andrea gave
Bernardo two months within which to pay the price of P500,000. After 50
days Andrea informed Bernardo that she is increasing the price of the land
to P700,000. Can Bernardo compel Andrea to accept the P500,000, first
offered and execute the deed of sale?
a.
No, because Bernardo did not signify his acceptance of the offer of
P500,000
b.
Yes, because the period of 2 months has not yet expired
c.
Yes, because Andrea is already stopped by her signed letter
d.
Yes, because there was actual meeting of minds of the parties

23.

The goods are no longer in transit in the following cases, except:

a.
after delivery to the buyer or his agent in that behalf
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b.
c.
d.
24.

if the buyer or his agent obtains possession of the goods at a point

before the destination originally fixed
if the carrier or bailee acknowledges to hold the goods on behalf of
the buyer
none of the above

The following are the essential elements of the warranty against eviction,
except:
a.
the judgment is based on a right prior to the sale or an act imputable
to the vendor
b.
the vendee is not deprived in whole or in part of the thing purchased
c.
the vendee is so deprived by virtue of a final judgment
d.
there was no waiver on the part of the vendee

25.

Charlie sold his parcel of land in Manila to Bernice for a consideration of

P1M. A deed of absolute sale was executed in Bernices favour immediately
after the purchase price was paid. However, Bernice did not immediately
take possession of the land, as she was still in the province. Seeing that the
house and lot seem unoccupied, several persons squatted on it and began
to establish their residence on said lot. After being aware of the situation,
Bernice instituted an action for rescission of the contract of sale between
her and Charlie alleging that Charlie was liable for violation of the warranty
against eviction. Was there a violation of warranty against eviction?
a.
No. Charlie and Bernice did not explicitly agree upon the warranty of
eviction in their contract.
b.
Yes. Even though Charlie and Bernice did not explicitly agree upon a
warranty of eviction, said warranty is implied in all contract of sale as
stated in Art. 1547 of the Civil Code.
c.
No. Warranty against eviction is not applicable in this case for mere
trespass in fact does not give rise to the application of the doctrine of
eviction.
d.
Yes. Bernice was deprived of the lot she has purchased; therefore
Charlie should be liable under the doctrine of warranty against
eviction.

26.

Juan sold his car to Berto. Several negotiations took place between the
parties, however, no final price for Juans car has been agreed upon. After a
month of negotiations, Juan delivered the car to Berto upon the
understanding that Berto is already committed to the purchase of the car.
Berto demanded for the execution of a deed of absolute sale in his favour,
asserting that the contract of sale between him and Juan is already
perfected as evidenced by delivery of the car. Is there a valid and perfected
contract of sale between Juan and Berto?
a.
No. The delivery and taking possession of the subject matter by the
buyer with the knowledge or consent of the seller, would not bring
about the perfection of the sale, when the meeting of the minds is
incomplete, there being no final agreement as to the price.
b.
No. The element of consent is absent for the parties are still in the
negotiation phase of the contract, there being no agreement as to the
final price of the car.
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c.

d.

27.

28.

Yes. Juans delivery of the car means that he has agreed to sell it. The
agreement as to the price can be agreed upon after the delivery, as
this does not affect the contractual relationship between the parties.
Yes. Perfection of the contract of sale is evidenced by delivery of the
thing, which is the object of the contract.

Statement 1: Any stipulation exempting the vendor from the obligation to

answer for eviction shall be void, if he acted in bad faith.
Statement 2: If the property is sold for non-payment of taxes due and not
made known to the vendee before the sale, the vendor is liable for eviction.
a.
Statement 1 is true; Statement 2 is false
b.
Statement 1 is false; Statement 2 is true
c.
Statement 1 is true; Statement 2 is true
d.
Statement 1 is false; Statement 2 is false
The following are the requisites for warranty against hidden defects, except
for:
a.
the defect may not be important for serious;
b.
it must be hidden;
c.
it must exist at the time of the sale;
d.
the vendee must give notice of the defect to the vendor within a
reasonable time.

29.

On June 5, 2015, JD was supposed to deliver to RS a specified red car.

There was no delivery however, on said date. On June 15, 2015, the garage
of the car was totally destroyed. Is JD liable?
a.
No.
JD could plead impossibility of the performance due to a
fortuitous event even if he is in default.
b.
Yes. JD is in legal delay.
c.
No. There was no demand and the car was lost through a fortuitous
event.
d.
Yes. There is a perfected contract of sale.

30.

Gross inadequacy of price in the contract of sale may indicate a defect in

the:
a.
Contract
b.
Consent
c.
Consideration
d.
Price

31.

A promise to buy and sell a determinate thing for a price certain is:
a.
Unilaterally demandable
b.
Reciprocally demandable
c.
Legally demandable
d.
All of the above

32.

Consent is manifested by the meeting of the offer and the acceptance upon
the thing and the cause which are to constitute a contract of sale. Which of
the following constitute an offer?
a.
a definite offer made through an agent
b.
business advertisement of things for sale
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c.
d.

advertisements for bidders

a declaration of an intent to sell

33.

Mr. Oliveros, by virtue of a written agreement agreed to deliver to Mr.

Santos a car on specified date provided the latter pays the former P1M.
a.
the prestation is the car; Mr. Santos is the active subject; Mr. Oliveros
is the passive subject; and the juridical tie is the contract.
b.
the active subject is Mr. Oliveros; the passive subject is Mr. Santos;
the juridical tie is the law and the prestation is the giving of the car.
c.
the active subject is Mr. Santos; the passive subject is Mr. Oliveros;
the prestation is the delivery of the car and the juridical tie is the law.
d.
the passive subject is Mr. Oliveros; the active subject is Mr. Santos;
the prestation is the delivery of the car and the juridical tie is the
contract.

34.

The action for rescission of the contract or reduction of the purchase price
due to violation of warranty against hidden defects prescribes in:
a.
One year from the date of delivery of the thing sold
b.
Two years from the date of delivery of the thing sold
c.
Six months from the date of delivery of the thing sold
d.
Three months from the date of delivery of thing sold

35.

Statement 1: The vendee is not bound to accept delivery and to pay the
price of the thing at the time and place stipulated in the contract.
Statement 2:
If the time and place should have been stipulated, the
payment must be made at the time and place of the delivery of the thing
sold.
a.
Statement 1: True; Statement 2: False
b.
Statement 1: False; Statement 2: False
c.
Statement 1: False; Statement 2: True
d.
Statement 1: True; Statement 2: True

36.

In the following cases, the vendee cannot suspend the payment of the price
even if there is disturbance in his possession of ownership of the thing sold:
a.
if the vendor gives security for the return of the price in a proper
case;
b.
if it has been stipulated that notwithstanding any such contingency
the vendee must make payment;
c.
if the disturbance is a mere act of trespass;
d.
all of the above

37.

The remedies allowed to the buyer when the seller has been guilty of a
breach of promise or warranty are:
a.
accept the goods and set up the sellers breach to reduce or
extinguish the price;
b.
accept the goods and maintain an action for damages for the breach
of the warranty;
c.
refuse to accept the goods and maintain an action for damages for
the breach of the warranty;
d.
all of the above
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38.

The following are the obligations of a vendor, except:

a.
to transfer the ownership of the determinate thing sold;
b.
to deliver the thing;
c.
to warrant against eviction and hidden defects;
d.
all of the above

39.

Statement 1: The thing sold shall be understood as delivered, when it is

place in the control and possession of the vendor.
Statement 2: With regards to movable property, its delivery may also be
made by the delivery of the keys of the place or depository where it is
stored or kept.
a.
Statement 1: True; Statement 2: True
b.
Statement 1: False; Statement 2: False
c.
Statement 1: False;
Statement 2: True
d.
Statement 1: True;
Statement 2: False

40.

The following are the rights of a person to whom a negotiable document of

title has been transferred, except:
a.
the title to the goods as against the transferor;
b.
the right to notify the bailee of the transfer thereof;
c.
the right, thereafter, to acquire the obligation of the bailee to hold the
goods for him;
d.
none of the above

II.

DEFINE OR GIVE THE MEANING THE FOLLOWING: (2 POINTS EACH)

1.
Divisible Contract
2.
Contract of Sale
3.
Tradition
4.
Right of Stoppage in Transitu
5.
Warranty of Merchantability
6.
Recoupment
7.
Barter
8.
Traditio brevi manu
9.
Redhibitory Defect
10. Quasi-Traditio
*******GOOD LUCK******

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