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

4. 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

5. 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

6. 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

7. 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

8. 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

9. One of the following is not a real contract

a) Pledge
b) Commodatum
c) Deposit
d) Sale

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
b) Insolvency of either party
c) Insanity of either party
d) 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) Benitez may compel Serrano to sell to him the car for P1M.
b) Serrano may validly withdraw his offer to Benitez because the option was not
founded upon a consideration.
c) Serrano may not withdraw his offer until the lapse of the option period that he gave to
Benitez
d) 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 exception?

a) 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.
b) When there is a failure to disclose facts, when there is duty to reveal them, as when
the parties are bound by confidential relations.
c) 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.
 d) 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

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.

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

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

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

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

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 was vitiated

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

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.

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

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

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 of what he has given

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) The agreement between Hayme and Nadya is valid because they can legally get
married if they want to.
b) The agreement between Hayme and Nadya is void for being contrary to morals
c) Hayme may legally demand that Nadya live with him as his wife.
d) 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) The contract was not perfected because P, the real party to the sale, died before the
acceptance came to his knowledge
b) The contract was perfected on August 1, 2018
c) The contract was perfected on August 3, 2018
d) 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) Is an essential element of a contract

b) Although illegal, does not affect the validity of the contract
c) Is always known by the other party
d) 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) Intimidation
b) Undue influence
c) Fraud
d) 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) Conception, consummation and birth
c) Conception, birth and consummation
d) 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.
Answer: C

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.
Answer: D

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 the custom in the place
because S and B did not stipulate about it.
b. S is obliged to place a horseshoe on the horse because the observance of custom or usage
in the becomes part of the contract.
c. S is not obliged to take care of the horse before delivery because the caring of the horse
was not stipulated.
d. S and B are bound only by the terms stated in their agreement.
Answer: B

54. In January 2008, S, 17 years old, sold his only car to B, 21 years old. The sale was without the
knowledge of G, the guardian of S. Assuming an annulment case is filed today:
a. S may bring the action for annulment.
b. G may bring the action for annulment.
c. B may bring the action for annulment.
d. Annulment will not prosper whoever will file it.
Answer: D

55. Which among the following contracts is void?

a. A contract of barter between S, insane, and B, 17 years old.
b. A contract of sale where B, the buyer, twisted the arm of S, the seller, so that S would
sign the deed of sale.
c. A contract of sale where B, the buyer, aimed a gun at the wife of S, so that S would sign
the deed of sale.
d. A contract for the sale of a cow which is suffering from a contagious disease.
Answer: D

56. Which of the following contracts is valid and enforceable?

a. An oral promise to answer for the default of another.
b. A donation and its acceptance in a private instrument of a parcel of land.
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.
Answer: C

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.
Answer: A

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.
Answer: B

59. S sold a parcel of land to B for P100,000.00 with B paying the said amount immediately.
Although S delivered the transfer certificate of title of the land to B, the parties did not execute
any document at all for the sale except the receipt for the payment which S issued to B. B now
wants to register the sale with the Register of Deeds.
a. B can compel S to execute a Deed of Sale which is duly notarized so that B can register
the sale.
b. B cannot compel S to execute a Deed of Sale because the contract is unenforceable.
c. The contract between S and B is void because it was not in the form required by law.
d. The contract between S and B is rescissible; hence can sue for damages.
Answer: A

60. S and B entered into a contract whereby S sold his car to B for P100,000.00. Based on the
foregoing, which of the following statements is incorrect?
a. The contract is voidable if S is 17 years old, and B is 25 years old.
b. The contract is unenforceable if S is 17 and B is insane.
c. The contract is void if B, 25 years old, compelled S, 30 years old, to sign deed of sale by
threatening to burn the house of S.
d. The contract is rescissible if at the time of the sale, the car was the subject of litigation
brought by X against S to recover the car, and the court and X did not give their authority to the
sale.
Answer: C
61. Which of the following contracts is valid and enforceable?
a. A contract where a party gave his consent in a moment of drunkenness.
b. A contract where a party gave his consent because the other party threatened to sue him
for an unpaid debt.
c. A contract where a party gave his consent because the other party threatened to kill the
first party’s spouse.
d. A contract where there was inadequate cause attended by mistake.
Answer: B

62. A entered into a contract with B whereby B agreed not to testify in a criminal case filed against
A in exchange for P5,000.00 to be given by A. The contract between A an B is:
a. void for being contrary to law.
b. void for being contrary to good customs.
c. void for being contrary to public policy.
d. valid because there is nothing wrong when one does not want to testify against another
in a crime.
Answer: C

63. Which of the following must be in writing to be enforceable as require by the Statute of Frauds?
a. A subscription for 100 shares of stock of a corporation at P100.00 per share.
b. A contract for the construction of a building scheduled to begin 3 months after the
execution of the contract.
c. A contract for the lease of an agricultural lot for a period of 8 months.
d. A contract whereby one agrees to pay another’s debt if the latter defaults in his payment.
Answer: D

64. Which of the following contracts is valid and enforceable?

a. A written contract for the purchase of a newborn baby who is the illegitimate child of
the buyer.
b. A written contract of employment where the employee agreed voluntarily not to demand
overtime payment for work rendered in excess of the regular hours of work per day.
c. An oral contract for the sale of a piece of land for P50,000.00 with the buyer giving a
down payment of P20,000.00.
d. An oral contract where the fruits of an immovable belonging to the debtor are to be
applied to the interest and principal of his obligation.
Answer: C

65. S, 17 ½ years old, sold his bicycle to , 24, for P12,000.00. The price is payable in 12 monthly
instalments. After reaching 18, S continued to collect the remaining 6 installments until the price
was paid in full.
 a. S may still annul his contract with B.
b. S may no longer annul his contract with B.
c. Only B may annul the contract with S on the ground of incapacity of S.
d. S and B may annul the contract at the same time based on the incapacity of S.
Answer: B

66. Under a contract between D and C, D is obliged to deliver 10 bags of detergent soap to C in
10 days after the execution of their agreement. On due date, D delivered to C 10 bags of detergent
soap which he mixed with chalk.
a. The contract entered into between D and C is voidable because of the frau employed by
D.
b. The contract is valid. The fraud employed by D does not affect the validity of the contract
but D is obliged to pay damages to C.
c. The contract is void because of the fraud employed by D in the performance of his
obligation.
d. The contract is rescissible because of the damages suffered by C.
Answer: B

67. On January 1, 2010, Berroya bought a parcel of land from Salustiano who was insane. The
deed of sale was duly acknowledged before a notary public. Six months after the sale, Berroya
realized that he needed a larger area on which to construct a commercial building. Salustiano who
had been undergoing psychiatric treatment was declared of sound mind by his psychiatrist. Should
a court action be filed today:
a. Berroya may successfully prosecute a court action to annul the contract on the ground of
Salustiano’s insanity.
b. Salustiano may successfully prosecute a court action to annul the contract on the ground
of his insanity.
c. Neither Berroya nor Salustiano may successfully prosecute a court action to annul the
contract.
d. Berroya may successfully prosecute a court action to annul the contract on the ground
of mistake as to the area of the parcel of land.
Answer: C

68. Stanley, 17 years old, suffered a deep cut on his eyebrow during a basketball game. He
requested one of his teammates to call Dr. Ramos whose clinic was just a stone’s throw from the
basketball court. Later, Dr. Ramos sent a bill to Stanley amounting to P500.00 for the services he
rendered. Stanley refused to pay the bill, claiming that, as a minor, he was not liable. The charge
was a reasonable amount.
a. Stanley is not liable because he is a minor and thus incapable of giving consent to engage
the services of the doctor.
 b. Stanley is liable although he is a minor because the contract involved a necessary.
c. Stanley is liable only when he reaches the age of majority.
d. The teammate is the one liable because it was he who personally called the doctor.
Answer: B

69. The following contracts are presented to you:

I. A contract of savings deposit between A and XYZ Bank. The contract was executed so
that A can present a certificate of bank deposit to the embassy of foreign country since A is
applying for a visa to the said country. A really has no deposit in the bank.
II. A contract where S and B made it appear that S sold his car to B for P100,0000.00, but
S actually borrowed P100,000.00 from B and mortgaged his car to secure the debt.

In your evaluation of the foregoing contracts:

a. Both contracts are absolutely simulated.
b. Both contracts are relatively simulated.
c. Contract I is absolutely simulated; Contract II is relatively simulated.
d. Contract I is relatively simulated; Contract II is absolutely simulated.
Answer: C

70. Which of the following contracts involving real property is valid and enforceable although not
in writing?
a. Sale of a piece of land for P50,000.00.
b. Lease of an agricultural lot for a period of 2 years at a monthly rental of P3,000.00.
c. Mortgage of a commercial lot to secure a loan of P50,000.00.
d. Donation and acceptance of a residential lot.
Answer: C

71. Tadeo owned a vacant lot adjacent to a bigger lot where Star Circus planned to put up a two-
week performance as provided in the lease contract which it executed with Legaspi, the owner of
the bigger lot. In expectation of using his property for parking lot, Tadeo levelled his lot and built
a small shed which cost him P20,000.00, an amount he had yet to pay the contractor. Later,
however, Star Circus cancelled the performance, so Tadeo brought a court action to recover
P20,000.00 from it and Legaspi. Based on the foregoing information, which of the following is
incorrect?
a. The circus contract took effect only between Star Circus and Legaspi, the parties to the
contract of lease.
b. Tadeo can recover damages from Star Circus and Legaspi by reason of stipulation pour
autrui.
c. Tadeo must pay his own contractor the amount of P20,000.00 because that is the
obligation that he alone contracted to pay.
 d. Tadeo, as an incidental beneficiary, has no rights under the circus contract.
Answer: B

72. An insurance policy which, in practice, is prepare by an insurance company and all the insured
has to do is sign thereon if he agrees with its terms, is an example of:
a. an auto-contract.
b. a contract of adhesion.
c. a commutative contract.
d. a gratuitous contract.
Answer: B

73. Don Henrico was an 85-year old, wheelchair-bound invalid who needed daily care. He hired
Normita, a live-in nurse to take care of him. After one year into this arrangement, Normita began
to pressure Don Henrico into signing a deed of donation giving Normita all his property in
exchange for her promise never to leave. Normita isolated Don Henrico from all his relatives and
friends and told him that everyone had abandoned him and that only she cared about him.
Convinced that he had been abandoned by his family and friends, Don Henrico donated all his
property to Normita. Both the donation and the acceptance were made in a public document. What
is the status of the donation?
a. Valid since it was in a public document together with the acceptance.
b. Voidable by reason of undue influence employed by Normita on Don Henrico.
c. Voidable by reason of the intimidation employed by Normita on Don Henrico.
d. Voidable since the old age of Don Henrico prohibited him from thinking intelligently.
Answer: B

74. D, the only daughter and heir of L, a lawyer, discovered shortly after L’s death that her father’s
book, Legal Eagle, a rare collection, was missing from L’s library. After going through L’s records,
D traced the book to S, a law student. When D informed S that she wanted the book returned, S
refused claiming that L donated the book to him. D, however, protested saying that the book was
merely lent to him by L.
a. D cannot ask for the return of the book although she is the only heir because L’s right
over the book was not transmitted to her.
b. D can ask for the return of the book because it should be considered to have been lent
only by L to S, i,e., the contract should be one of commodatum only.
c. D cannot ask for the return of the book because the same should be considered as having
donated by L to S.
d. The contract involving the book is void since the intent of L and S was ambiguous.
Accordingly, D can ask for the return of the book on the ground of the nullity of the contract.
Answer: B
75. S sold one of his lots to B for P100,000.00. The lot, located beside a busy street, consisted of
1,200 square meters was covered by Transfer Certificate of Title (TCT) No. 12345. After
registering the sale with the Register of Deeds, the issuance to him by the said office of a new
transfer certificate of title in his name, B discovered that the deed of sale and the new title described
S’s adjoining lot which, although also consisting of 1,200 square meters, was covered y TCT No.
12346 and located farther from the street. B learned that C, the secretary of S, typed the wrong
description on the deed of sale. B now approaches you for advice on which course of action to
take. What advise will you give to B?
a. Annulment of the contract because he did not consent to the purchase of the lot covered
by TCT No. 12346.
b. Rescission because the erroneous description has caused him damages.
c. Reformation because the deed of sale failed to show the true intention of the parties to
the contract.
d. Declaration of nullity of the contract because it is void ab initio by reason of the wrong
object.
Answer: C

76. Which of the following contracts is rescissible?

a. A sale made by a guardian in behalf of his ward of the corn harvested from the ward’s
corn field at a price of P50,000.00. The corn had a value of P60,000.00.
b. A sale of a piece of land made by D to defraud C, his creditor. The buyer of the piece of
land was aware of the fraudulent intention of D when D made the sale.
c. A donation made by D to X of his Guess wristwatch worth P3,000.00 during a party
where D was in a state of drunkenness, X wrote his acceptance on a table napkin.
d. A barter of D’s ring with C’s necklace. D was publicly known to be insane but he was
in his lucid interval at the time of the exchange.
Answer: B

77. Which of the following statements is true are regards a void contract?
a. A void contract is ratified by the acceptance by a party to the contract of a benefit under
its terms.
b. The right to set up the defense of illegality of a void contract may be waived if the
illegality is not raised within a reasonable time.
c. If there is a novation of a voi contract, such novation is valid provided the new contract
is valid.
d. The right to set up the defense of illegality of a void contract does not prescribe.
Answer: D
78. W, a woman, agreed to live with M, a man, as M’s wife without the benefit of marriage in
exchange for M’s promise to give a monthly support of P10,000.00. Both parties are single. After
3 years, M found another woman and stopped giving support to W.
a. W can demand the continuation of the monthly support from M pursuant to their
agreement.
b. M can demand the return of the support that he had given to W for the past 3 years.
c. Both M and W will be criminally prosecuted.
d. The agreement between M and W is illegal but the illegality does not constitute a crime.
Answer: D

79. It is a contract by virtue of the terms of which the parties thereto promise and obligate
themselves to enter into another contract at a future time, upon the happening of certain events, or
the fulfilment of certain conditions.
a. Contract of adhesion.
b. Contract of option.
c. Contract of sale.
d. Auto-contract.
Answer: B

80. O was cleaning the glass window of his building when a large piece of broken glass fell down
directly hitting the roof of a car which was parked below. C, the owner of the car, was not around.
Sensing that he would be made liable for the damage on the car, O immediately went down and
cleaned up the mess. O, seeing that W had witnessed all that happened, proposed to give W
P2,000.00 so that W would not testify in case a court case is filed. W agreed to the proposal and
accepted the money. Base on the foregoing facts, which of the following statements is incorrect?
a. O’s liability, if any, is based on quai-delict.
b. The agreement between O and W is binding on both of them.
c. W may testify in court despite the agreement.
d. The agreement between O and W is void for being contrary to public policy.
Answer: B

81. Salendrez agreed to sell his car to Martinez who just turned 17 years old, for P100,000.00.
Martine gave a down payment of P10,000.00 of the price. Shortly before the scheduled delivery
of the car, Salendrez received a higher offer from Tablizo. He thus attempted to annul the sale on
the ground that Martinez is a minor.
a. Salendrez may annul the contract because the minority of Martinez rendered the contract
voidable.
b. Only Martinez may annul the contract on the ground of his incapacity.
c. Martinez may no longer annul the contract because he is deemed to have ratified it when
he gave a down payment at the time of the execution of the contract of the sale.
 d. Neither Salendrez nor Martinez may annul the contract because the contract is partly
executed.
Answer: B

82. Torrente, a supplier of typewriters, sent to several customers in various parts of the country a
letter offering to sell out “all his stock of 10 unites of Olympia typewriter” at the discounted price
of P3,000.00 each. The offer stated that the reply must be received by registered mail not later than
September 18. On September 14, Belleza sent a registered letter accepting the offer. The letter was
received by Torrente on September 19. On September 16, Corpuz sent a telegram accepting the
offer. The telegram was received by Torrente on the same day. Whose acceptance is binding on
Torrente?
a. The acceptance by Belleza because it was mailed first.
b. The acceptance by Corpuz because it was received first by Torrente.
c. Neither acceptance is binding on Torrente.
d. Both the acceptance will be binding on Torrente, with Belleza getting 5 typewriters, and
Corpuz getting the other 5.
Answer: D

83. S and B signed a deed (written contract) of sale of motor vehicle whereby S 0sold his car to B
for P200,0000.00. The parties agreed that S would deliver the car, and B would pay the price, after
two weeks. Before the two week period was over, S found another buyer who was willing to pay
P220,000.00 for the car. May S validly withdraw from his contract with B?
a. Yes, because B has not yet paid the price.
b. Yes, because the other buyer was willing to pay more.
c. No, because S was already bound by his contract with B and he cannot unilaterally
withdraw from it.
d. Yes, because S has not yet delivered the car.
Answer: C

84. D obtained a loan from C amounting to P200,000.00. To secure the loan, D mortgaged his lot.
C registered the mortgage with the Register of Deeds. Later, D sold the lot to X who was not aware
that the lot was mortgaged. On the due date of the loan, C demanded payment but D could not pay.
Accordingly, C decided to foreclose the mortgage on the lot. X, however, opposed the foreclosure
claiming that he was not bound by the mortgage since he was not a party thereto.
a. X was bound by the mortgage although he was not aware of it because the same is
registered.
b. X was not bound by the mortgage because he was not a party thereto.
c. Only D and C were bound by the mortgage contract because they were the only parties
thereto.
d. X was not bound by the mortgage because he was not aware of it.
Answer: A

85. On June 1, S offered to sell a specific generator set to B for P300,000.00. B sent his letter if
acceptance to S on June 8. On June 10, however, B became insane. On June 12, S received B’s
letter of acceptance.
a. The contract was perfected on June 8 when B sent his letter of acceptance, at which time
he was still sane.
b. The contract was perfected on June 12 when S learned of the acceptance.
c. The contract was not perfected because the insanity of B occurred before S came to learn
of the acceptance of his offer by B.
d. The contract was perfected on June 1 because the acceptance made by B on June 8
retroacts to the date of the offer.
Answer: C

86. P gave a special power of attorney to A to sell P’s house and lot for P2,000,000.00. On May 7,
A, pursuant to the authority granted to him by P, offered to sell the house and lot to B at the price
of P2,000,000.00. B accepted the offer on May 8 by sending a letter of acceptance to A on such
date, which letter of acceptance was received by A on May 10. On May 11, P revoked A’s authority
before the latter could inform him of B’s acceptance.
a. The contract was perfected on May 8 when B sent his letter of acceptance.
b. The contract was perfected on May 10 when A received the letter of acceptance.
c. The contract was not perfected because P, the true owner of the car that was sold, revoked
A’s authority before he came to learn of B’s acceptance.
d. The contract was perfected on May 7 since the acceptance by B retroacts to the date of
the offer.
Answer: B

87. On May 1, Sonora offered to sell his car for P500,000.00 to Balmores who was interested in
buying the same. In his letter to Balmores, Sonora stated that he was giving Balmores up to May
31 to decide whether to buy the car or not. On May 10, Balmores sent to Sonora through his
messenger a letter stating that he was accepting the promise of Sonora. Enclosed in the envelop
was the amount of P2,000.00 as option money On May 25, Sonora personally went to Balmores
to inform him that he was no longer willing to sell the car unless the price was increased to
P600,000.00 because another buyer was interested in buying the car for the said amount.
a. Balmores may compel Sonor to sell him the car for P500,000.00 because they have an
option contract which was founded upon valuable consideration.
b. Sonora may validly withdraw his offer to Balmores and all that Sonora needs to do is to
inform Balmores of such withdrawal.
c. Sonora may withdraw his offer even before the lapse of the option period that he gave
to Balmores because that is his right as the owner and seller of the car.
 d. Sonora is free to sell the car to another only even before the lapse of the option period
that he gave to Balmores because he stands to gain P100,000.00 from the transaction.
Answer: A

88. D donated his lot to C because he thought that C was his illegitimate son. The deed of donation
was signed by D and C, and acknowledged by them before a notary public before a new certificate
of title to the lot was issued by the Register of Deeds. Later, D learned that C was not his son, but
that of another man:
a. D can have the donation annulled on the ground of mistake of identity.
b. D can no longer annul the donation because a new certificate of title has already been
issued.
c. D cannot annul the donation because he freely entered into it.
d. D cannot annul the donation because disregarding it would be unfair to C.
Answer: A

89. A has been for more than 20 years the legal counsel of C. A talked to C almost everyday in the
course of giving counsel to C to convince C to donate his lot to him. A told C that it was only he
who knew all of C’s cases and was the only one who could handle them and C’s other legal
concerns. Because of the persistence of A in talking him into donating his lot, C finally signed the
deed of donation of the lot in A’s favor with all the formalities required by law.
a. The deed of donation is valid because all the formalities required were complied with.
b. The deed of donation is voidable on the ground of undue influence.
c. The deed of donation is voidable on the ground of intimidation.
d. The deed of donation is valid because it was the only way by which C could keep A as
a lawyer.
Answer: B

90. The following are the essential elements of a consensual contract except:
a. Consent of the contracting parties.
b. Object certain which is the subject matter of the contract.
c. Delivery of the object of the contract.
d. Cause of the contract which must be established.
Answer: C

91. An insurance contract is:

a. an aleatory contract.
b. a contract of adhesion.
c. Both (a) and (b).
d. neither (a) nor (b).
Answer: C
92. D borrowed P100,000.00 from C. On due date, C demanded payment by D refused to pay. In
view thereof, C threatened to sue D. Afraid that he would be sued, D executed a contract
transferring his lot to C by way of dacion en pago. What is the status of the dacion en pago?
a. Void because D did not give his consent freely.
b. Voidable because D gave his consent by reason of the intimidation employed by C.
c. Valid because there was no intimidation when a party seeks the aid of the courts to
enforce his right.
d. Rescissible because D suffered damages.
Answer: C

93. On March 1, S sent a letter offering the sale of his car for P200,000.00 cash to B. In his letter,
S stated that B’s acceptance should be sent by registered mail and must be received by S not later
than March 31. On March 20, B accepted the offer of S by sending an e-mail message on the same
day to S whose e-mail address was indicated in the letter. S read the message the following day,
March 21. Was there a perfected contract between S and B?
a. Yes, on March 1.
b. Yes, on March 20.
c. Yes, on March 21.
d. No, no contract was perfected at all.
Answer: D

94. These statements are presented to you:

I. Option money is part of the purchase price.
II. Earnest money is proof of the perfection of a contract of sale.
In your evaluation of the foregoing statements:
a. Both statements are true.
b. Both statements are false.
C. Only Statement I is true
d. Only Statement II is true.
Answer: D

95. D gave his US$100.00 bill to C to have it converted into pesos at the agreed rate of P55.00 to
US$1.00. When D received his money in pesos, he discovered that C gave him P5,700.00 instead
of P5,500.00. No written agreement was executed by the parties. The only written evidence of the
transaction was the tape dispensed by the adding machine showing the computation to be
P5,500.00 and which was in the possession of D.
a. The contract is voidable. C can have it annulled on the ground of mistake.
b. The contract is valid. D must return the excess of P200.00 to C.
c. The contract is unenforceable since it was not in writing.
 d. C can demand that a writing be executed to show the true intention of the parties.
Answer: B

96. P, the owner of a business, appointed A as his agent to manage it. P authorized A to borrow
money for the business. A himself is the one who lends the money at the current rate of interest.
Thus, in the said contract of loan, A enters into the contract in his own behalf as lender and
represents P as borrower. The contract of loan in such a case is considered as:
a. an auto-contract.
b. an aleatory contract.
c. a remuneratory contract.
d. a gratuitous contract.
Answer: A

97. D dined at C’s restaurant where he was served food amounting to P475.00. When he was about
to pay, he discovered his wallet was missing. Not having any money to pay, he called T, his friend,
who knew C, and explained his predicament. T, through his cell phone, then called C and told D
to let D leave without incident, and that he would be the one to pay D’s bill if D does not or cannot
pay.
a. The promise of T can be enforced against him by C because the food sale was evidence
by the bill issued by C to D.
b. The promise of T can be enforced against him by C because the food sale was less than
P500.00.
c. The promise of T cannot be enforced against him by C because it was not in the form
required by law to be enforceable.
d. The promise of T can be enforced against him by C because D already benefited from
the contract of sale.
Answer: C

98. S sold his lot consisting of 1,000 square meters to B. However, the deed of sale signed by the
parties showed a total area of 1,200 square meters due the secretary’s mistake. Later, S discovered
the mistake. What remedy is available to either party?
a. Annulment
b. Reformation
c. Rescission
d. Declaration of nullity of the contract.
Answer: B

99. On August 1, 2015, Samonte sent a letter to Benavidez. In the letter, Samonte offered to sell
his house and lot located at Green Valley Subdivision for P1,200,000.00 cash and stated that the
acceptance had to be received by Samonte not later than August 15, 2015. Benavide sent his
acceptance on August 10, 2015 but due to the delay in the mails, Samonte received the letter of
acceptance on August 18, 2015.
a. The contract between Samonte and Benavidez was perfected on August 10, 2015.
b. The contract between Samonte and Benavidez was perfected on August 15, 2015.
c. The contract between Samonte and Benavidez was perfected on August 18, 2015.
d. No contract was perfected between Samonte and Benavidez.
Answer: D

100. Sermonia Agri-Products, a supplier of “ZZ” fertilizer, offered in writing to sell to Barbados
Farms, 50 bags of the fertilizer at the price of P100.00 per bag. The offer stated that the price would
be good for one week during which Barbados Farms may decide to accept the offer. Three days
later and before Barbados could make any acceptance, the general market price went up. Sermonia
attempted to revoke the offer by informing Barbados, but Barbados claimed Sermonia could not
do so.
a. Sermonia may withdraw the offer by just informing Barbados since there has not yet
been any acceptance thereof.
b. Sermonia may not withdraw the offer since the one-week period within which Barbados
may decide had not yet lapsed.
c. Sermonia may withdraw the offer only after the expiration of the one-week period, unless
Barbados in the meantime has accepted the offer.
d. Sermonia may withdraw the offer because it would suffer a loss if the sale was allowed
to push through.
Answer: A
101. D obtained a loan of P1,000,000.00 from C. To secure the debt, D executed deed of mortgage
covering tw of his lots, Lot A and Lot B, each of which is in the name of D in the certificate of
title. The mortgage of Lot A was recorded within one week in the Office of the Register of Deeds,
but that of Lot B could not be processed as other documents were being required by the Register
of Deeds. In the meantime, D sold Lot A to X, and Lot B to Y. X knew nothing on the mortgage
of Lot A, but Y was aware of the mortgage of Lot B.
a. Both X and Y are bound by the mortgage on the lot sold to each of them.
b. Both X and Y will not be bound. In the case of X, he knew nothing of the mortgage. In
the case of Y, the mortgage was not registered.
c. X is bound by the mortgage of Lot A. Y is not bound by the mortgage of Lot B.
d. X is not bound by the mortgage of Lot A. Y is bound by the mortgage of Lot B.
Answer: A

102. B obtained delivery from S of a Nikkon camera and an unlicensed revolver which he
purchased from the latter at the rice of P1,500.00 and P5,000.00, respectively. No written
agreement was signed by the parties to keep the contract a secret.
 a. The sale of the camera is unenforceable because it was not in writing, while that of the
revlver is void because the object is illegal.
b. The sale of the camera is valid and enforceable, while that of the revolver is void.
c. The sale of both the camera and the revolver is valid because the parties are bound by
their secret agreement.
d. The sale of both the camera and the revolver is void because the contract is indivisible.
Answer: B

103. Which of the following contracts is valid and enforceable?

a. A contract of sale between S and B, both of legal age, of a computer worth P20,000.00.
No document was signed by the S, the seller, and B, the buyer who has given a down payment of
P4,000.00. S is set to deliver the computer upon full payment of the price.
b. A contract of lease between S, 16, and B, 25. The lease which was in writing and signed
by both parties, had for its object a drilling equipment, and had a duration of 3 years. The drilling
equipment is now in the possession of B who has paid the rental of P1,000.00 for the first month
to S.
c. A contract of donation of a lot between S,30, and B, 24. The donation and the acceptance
are in a private document. B has since occupied the lot.
d. A 6-month contract for the supply of carabao meat by S to B. Although the slaughter of
carabao is prohibited by law, the contract is now on its third month and S has made the carabao
meat deliveries worth P30,000.00.
Answer: A

104. P, the owner of a certain business, instructed A, his agent and manager of the business to buy
goods on credit from S. S issued a sales invoice where A acknowledged the receipt of the goods
by signing thereon. P called S by phone and promised to S that he (P) would pay for the goods on
the due date. S was not paid on the due date. Accordingly, he sued P for the price of the goods. P
raised the defense of unenforceability under the Statute of Frauds claiming that a representation as
to credit must be in writing.
a. The promise is enforceable against P although it was not in writing.
b. The promise is unenforceable against P because it was not in writing.
c. The promise is enforceable against A because it was he who signed the invoice.
d. The promise may be enforced both against P and A since they are the debtors in the
transaction.
Answer: A

105. The following contracts, all of which are executor and not in writing, are presented to you for
evaluation:
I. Sale of a price of land for P50,000.00.
II. Sale of a computer for P20,000.00.
 III. Lease of a delivery truck at P1,000.00 per month for 2 years.
In your evaluation of the foregoing contracts:
a. I and II are enforceable.
b. II and III are unenforceable.
c. I and III are unenforceable.
d. All contracts are unenforceable.
Answer: A

106. The following are characteristics of certain contracts:

I. Nominate
II. Real
III. Aleatory
IV. Commutative
A contract for the sale of a sweepstakes ticket is considered as:
A. I and II.
B. I and IV.
C. I and III.
D. III and IV.
Answer: C

107. Which of the following does not apply to a relatively simulated contract?
a. The parties are bound by their real agreement.
b. The parties are not bound at all.
c. The parties are bound by their ostensible agreement if the real agreement prejudices third
persons.
d. The parties are bound by their ostensible agreement if the real agreement is contrary to
law, morals, good customs, public order and public policy.
Answer: B

108. The following contracts are presented to you:

I. A contract where one of the parties gave his consent in a state of drunkenness.
II. A contract where one of the parties gave his consent during a hypnotic spell.
III. A contract where both parties employed fraud to obtain the consent of the other
party.
IV. A contract where one of the parties gave his consent because the other party
threatened to sue him.
In your evaluation of the foregoing contracts, which of the said contracts are not voidable?
a. I and II.
b. I and III.
c. II and III.
 d. III and IV.
Answer: D

109. S placed an advertisement in the Manila Bulletin as follows: “INVITATION TO BID: For
sale, house and lot located at No. 120 Roxas Boulevard, Manila.” Three persons submitted their
bids as follows: A, P2 million; B, P2.5 million; and C, P3 million. After studying the bids, S
awarded the contract to B. C complained claiming that the contract should have been awarded to
him since he was the highest bidder.
a. The award of the contract to B is not valid because he was only the second highest bidder.
b. The contract should have been awarded to C because S, as the advertiser, was bound to
accept the highest bidder.
c. S was not bound to accept the highest bidder because advertisements for bidders are
mere invitations to make proposals, unless the contrary appears.
d. The contract should have been awarded to C because his bid was the most advantageous
to S.
Answer: C

110. When a physician who takes improper advantage of his power over the will of his patient in
order to get the latter’s consent to a contract between the two of them, the contract will:
a. likely be voidable because of intimidation.
b. still be valid because the patient is merely returning the favour to his physician who takes
care of his health.
c. likely be voidable because of undue influence.
d. be void because of unlawful service.
Answer: C

111. These statements are presented to you for evaluation:

I. Payment of option money by the buyer reduces the purchase price that he will pay
to the seller in case he accepts the offer.
II. Payment of earnest money will make an oral sale of an immovable enforceable.
In your evaluation of the said statements:
a. Both are true.
b. I is true; II is false.
c. Both are false.
d. I is false; II is true.
Answer: D

112. Casimiro filed against Delgado a complaint which sought to collect Delgado’s debt of
P200,000.00 and attach Delgado’s lot located at No. 120 Lepanto Street, Sampaloc, Manila. The
court accordingly issued the writ of attachment on the property against Delgado. While the case
was pending, Delgado sold his lot located at No. 95 Scout Albano Street, Quezon City. Torres,
another creditor of Delgado, now questions the sale as fraudulent and seeks to rescind it.
a. Torres may not question the sale because it was not he but Casimiro who obtained the
writ of attachment against Delgado.
b. Casimiro may not question the sale because it referred to a lot which was not the object
of attachment.
c. Either Torres or Casimiro may question the sale.
d. Neither Casimiro nor Torres may question the sale.
Answer: C

113. The following contracts are presented to you for evaluation:

I. Pledge
II. Commodatum
III. Sale
IV. Donation of an immovable.
The real contracts among the four contracts enumerated are:
a. I and II
b. II and III
c. I and III
d. II and IV
Answer: A

114. The following cases are presented to you:

I. S informed B that the house S was selling was never infested by termites. The truth,
however, was that S had the house treated for termites 3 months before. B bought the house
believing in the words of S.
II. S sold to B 10 bags of cement which were scheduled for delivery one week from
their scheduled agreement. On delivery, S delivered t B 10 bags that contained a mixture of cement
and pulverized rocks.

In your evaluation of the above cases, the fraud employed by S rendered voidable:
a. The contract of sale in Case I only.
b. The contract of sale in both cases.
c. The contract of sale in Case II only.
d. Neither of the two contracts.
Answer: A

115. The following statements are presented to you:

I. The illegality of the motive of a party to a contract renders the contract void.
II. The motive of one party to a contract is always known by the other party.
In your evaluation of the foregoing statements:
a. Both are true.
b. Both are false.
c. Only I is true.
d. Only II is true.
Answer: B

116. On March 5, 2014, Orlando and Timoteo entered into a written contract of lease whereby
Orlando as lessor leased the third floor of his building to Timoteo, lessee. The contract provides,
among other terms and conditions, the following: (a) The lessee shall give a rental deposit of two
months amounting to P40,000.00; and pay an advance rental of one(1) month amounting to
P20,000.00 upon the execution of the contract; (b) The lessor shall keep the leased premises in
tenantable condition throughout the period of lease which is from April 1, 2014 to March 31, 2016;
(c) At the end of the lease period, the lessor shall return the rental deposit to the lessee less any
amount of damage that may be caused on the leased premises by the lessee.

Timoteo, pursuant to the contract, gave both the rental deposit and advance rental to Orlando upon
the execution of the contract.

The contract between Orlando and Timoteo is:

a. Bilateral, nominate, onerous and commutative.
b. Bilateral, innominate, onerous and aleatory.
c. Unilateral, nominate, gratuitous and commutative.
d. Unilateral, innominate, onerous and commutative.
Answer: A

117. Assume the same facts in No. 172 except that the contract was entered into orally between
Orlando and Timoteo. In such a case, the contract between the parties is:
a. unenforceable.
b. voidable.
c. rescissible.
d. valid and enforceable.

118. The efficient cause in the obligations in No. 172 is the:

a. lease period of two (2) years.
b. contract of lease between Orlando and Timoteo.
c. Obligation of Timoteo to give the rental deposit and the one (1) month advance rental.
d. obligation of Orlando to keep the leased premises in tenantable condition throughout the
period of the lease, and to return the rental deposit upon the expiration of the lease.
Answer: B
119. D borrowed P50,000.00 from C. The debt, which is payable within one year, is secured by a
mortgage that D constituted on his lot. The mortgage s recorded in the Registry of Property. C dies
before the due date of the debt and was not able to collect any amount of his loan receivable from
D. He was survived by S, his only son and heir. D, taking advantage of the situation, sold the lot
to T who was not aware of the mortgage constituted thereon.
a. The mortgage is not binding on T since he was not aware of it at the time he bought the
lot.
b. S, the son of C, has the right to collect the amount of the note from D, and foreclose the
mortgage if D cannot pay.
c. The mortgage is not binding on T since D was in bad faith when he sold the lot to T.
d. The right to collect the loan was extinguished upon the death of C.
Answer: B

120. B entered into a contract for the purchase of 5 rolls of cloth worth P20,000.00 from S. The
materials which were to be used by B in the making of school uniforms, were scheduled for
delivery within 7 days. On the seventh day, S failed to deliver the cloth despite the demands from
B. As a result, B could not meet his commitment to his customers and was threatened with a court
suit. S claimed that M from whom he ordered the cloth under a contract that he (S) and M entered
into, did not finish manufacturing the product as scheduled in accordance with the terms of such
contract. In this case, B may not sue M for damages under the contract between S and M under
which principle of contract?
a. Principle of Liberality of Contract.
b. Principle of Relativity of Contract.
c. Principle of Consensuality of Contract.
d. Principle of Obligatory Force of Contract.
Answer: B

121. The following contracts are presented to you:

I. A contract of sale involving 100 sacks of rice entered into by G, a guardian, in
behalf of M, his ward. The rice was worth P100,000.00 but was sold by G for P85,000.00.
II. A contract of sale made by D of his only lot to X in order to defraud C, his creditor.
X was not aware of the fraudulent intention of D when he sold the lot to him.
III. A contract of sale made by D to X of jewelry which C is trying to recover in a court
case he filed against D. X was not aware that the jewelry was the subject of litigation between C
and D.

In your evaluation of the foregoing contracts:

a. Contracts I and II are rescissible.
b. Contracts I and III are rescissible.
 c. Contracts II and III are rescissible.
d. None of the above contracts is rescissible.
Answer: D

122. Which of the following contracts is not a void contract?

a. A contract of sale of an animal suffering from a contagious disease.
b. A purchase of an illegitimate child by one who is the father of the child.
c. A contract of insurance whereby the insured asked another to take his place during the
medical examination.
d. A contract between F, a Filipino and A, an alien for the purchase of the right kidney of
F for P200,000.00.
Answer: C

123. An aleatory contract is one:

a. the fulfilment of which depends upon chance.
b. the parties of which are obliged to perform reciprocal prestations.
c. where only one party actually and physically enters into the contract.
d. where delivery of the object is required to be made for its perfection.
Answer: A

124. Zenith Cars Corporation (Zenith) engaged the services of Stronghold Construction
Corporation (Stronghold) for the construction of its showroom. For this purpose, Stronghold
bought construction materials on a 60-day credit from Durable Materials Corporation (Durable).
On due date, Durable demanded payment from Stronghold but the latter contended that it could
not make any payment because it has not collected from Zenith. In this case:
a. Durable can hold liable Stronghold only.
b. Durable can hold liable Zenith only.
c. Durable can hold liable both Stronghold and Zenith.
d. Durable cannot hold liable neither Stronghold nor Zenith.
Answer: A