Question 1

Consent in a contract is manifested by any of the following acts, except:

Accepted Answer

A) Delivery of downpayment. 
B) Delivery of earnest money. 
C) Delivery of option money. 
D) Delivery of a letter accepting the offer with qualification. 
A) Delivery of downpayment. 
B) Delivery of earnest money. 
C) Delivery of option money. 
D) Delivery of a letter accepting the offer with qualification. D

Question 2

A was employed by ABC Co. as manager in Metro Manila subject to the condition that if A will be severed from the company, voluntarily or involuntarily, he cannot get involved in any business of the same nature with ABC's business in Metro Manila within a period of six (6) months from severance. Is the stipulation valid?

Accepted Answer

A) The stipulation is not valid because it is contrary to public policy. 
B) The stipulation is not valid because it is contrary to law, as it is a restraint of trade. 
C) The stipulation is valid because of the principle of mutuality of contracts. 
D) The stipulation is valid because the non-involvement clause provides for time and place to prevent unfair competition and advantage. 
A) The stipulation is not valid because it is contrary to public policy. 
B) The stipulation is not valid because it is contrary to law, as it is a restraint of trade. 
C) The stipulation is valid because of the principle of mutuality of contracts. 
D) The stipulation is valid because the non-involvement clause provides for time and place to prevent unfair competition and advantage. D

Question 3

A & B entered into an oral contract of sale of A's car worth ₱4.5M where the object was supposed to be delivered upon payment of the price. When A went to B's house to pay the price, the latter refused to sell hence, a complaint for specific performance was filed by A. will the complaint prosper?

Accepted Answer

A) The complaint will not prosper because the contract is not enforceable as it is not in writing. 
B) The complaint will prosper because a contract can be valid in whatever form it may be entered into. 
C) The complaint will not prosper because the contract is void as it was not put into writing. 
D) The complaint will prosper because of the principle of mutuality of contracts. 
A) The complaint will not prosper because the contract is not enforceable as it is not in writing. 
B) The complaint will prosper because a contract can be valid in whatever form it may be entered into. 
C) The complaint will not prosper because the contract is void as it was not put into writing. 
D) The complaint will prosper because of the principle of mutuality of contracts. A

Question 4

A is indebted to B in the amount of ₱2M. When the obligation became due and demandable B delivered to A his car and A accepted it. A month later A sued B for sum of money. Can B interpose the defense of dacion en pago?

Accepted Answer

A) B can interpose the defense of dacion en pago, because of the acceptance of the object. 
B) B can interpose the defense of extinguishment of the obligation by way of novation. 
C) B can interpose the defense of novation since the delivery of the car resulted in a change of relationship. 
D) B cannot interpose the defense of novation because novation cannot be presumed, it must be expressly agreed upon. 
A) B can interpose the defense of dacion en pago, because of the acceptance of the object. 
B) B can interpose the defense of extinguishment of the obligation by way of novation. 
C) B can interpose the defense of novation since the delivery of the car resulted in a change of relationship. 
D) B cannot interpose the defense of novation because novation cannot be presumed, it must be expressly agreed upon.

Question 5

The following enumeration is correct, except:

Accepted Answer

A) Consensual contracts are perfected by mere consent. 
B) Real contracts are perfected by the delivery of the object. 
C) All contracts are perfected by mere consent. 
D) Even if the lessor is obliged to deliver the thing leased, it is still a consensual contract. 
A) Consensual contracts are perfected by mere consent. 
B) Real contracts are perfected by the delivery of the object. 
C) All contracts are perfected by mere consent. 
D) Even if the lessor is obliged to deliver the thing leased, it is still a consensual contract.

Question 6

An action pauliana is an action to rescind contracts in fraud of creditors. The following are its requisites, except:

Accepted Answer

A) Plaintiff asking for rescission has a credit prior to the alienation although demandable later. (Panlilio v. Victoria, 35 Phil. 706) 
B) Debtor has made a subsequent contract conveying a patrimonial benefit to a third person. 
C) Creditor has no other legal remedy. 
D) The third person was not a party to the fraud. 
A) Plaintiff asking for rescission has a credit prior to the alienation although demandable later. (Panlilio v. Victoria, 35 Phil. 706) 
B) Debtor has made a subsequent contract conveying a patrimonial benefit to a third person. 
C) Creditor has no other legal remedy. 
D) The third person was not a party to the fraud.

Question 7

A borrowed money from Metrobank and executed a mortgage over his house and lot as security. No period has been agreed upon on the date of payment. Before the lapse of ten (10) years, the bank foreclosed the mortgage. Is the bank correct?

Accepted Answer

A) Yes, because of delay in the payment of the obligation. 
B) Yes, otherwise the action to foreclose might prescribe. 
C) No, because the proper remedy is for the bank to file an action for the fixing of the perio 
D) (Art. 1197, NCC, Pacific Bank v. CA, 5 May 1989). 
A) Yes, because of delay in the payment of the obligation. 
B) Yes, otherwise the action to foreclose might prescribe. 
C) No, because the proper remedy is for the bank to file an action for the fixing of the perio 
D) (Art. 1197, NCC, Pacific Bank v. CA, 5 May 1989).

Question 8

A lent money to B with a penalty clause providing for 6% per month. In case a suit is filed, what do you think the court will do with the penalty?

Accepted Answer

A) It will declare it void because it is contrary to law. 
B) It will declare it void because it is contrary to public policy. 
C) It will reduce the penalty. (Art. 1229, NC
C) . 
D) It will declare the penalty void as it is contrary to morals. 
A) It will declare it void because it is contrary to law. 
B) It will declare it void because it is contrary to public policy. 
C) It will reduce the penalty. (Art. 1229, NC
C) . 
D) It will declare the penalty void as it is contrary to morals.

Question 9

When A's obligation to B became due and demandable, A offered to pay, but refused to accept payment. State the remedies of A.

Accepted Answer

A) A must make a tender of payment to B. 
B) A must make a tender of payment and deposit the amount in court. 
C) A can go direct to court and deposit the amount due in court. 
D) A must make a tender of payment, deposit the amount in court and make a subsequent notice. 
A) A must make a tender of payment to B. 
B) A must make a tender of payment and deposit the amount in court. 
C) A can go direct to court and deposit the amount due in court. 
D) A must make a tender of payment, deposit the amount in court and make a subsequent notice.

Question 10

Which of the following is not correct in connection with the requisites of rescission?

Accepted Answer

A) It must be gratuitous. 
B) It must be accepted by the obligor. 
C) The obligation must be demandable. (Art. 1270, NC
C) . 
D) It can be unilateral. 
A) It must be gratuitous. 
B) It must be accepted by the obligor. 
C) The obligation must be demandable. (Art. 1270, NC
C) . 
D) It can be unilateral.

Question 11

A is indebted to ABC Corporation in the amount of ₱100M. Despite efforts to collect from A, the latter failed to pay due to business reverses as he has no more assets. In order to maintain a more accurate inventory of the worth of its current assets, ABC Corp. was forced to write-off A's obligation. One (1) year later, A won the lotto draw in the US in the amount of $100M. Learning of the good luck of A, it demanded for payment, but A refused to pay contending that his obligation was extinguished when it was written-off. Is A correct?

Accepted Answer

A) A is correct because write-off is a mode of extinguishing an obligation. 
B) A is correct because write-off is a compromise of liability. 
C) A is correct because write-off is a condonation of an obligation. 
D) A is not correct because in making the write-off, only the creditor takes action by removing the uncollectible account from its books even without the approval or participation of the debtor, hence, there is no extinguishment of the obligation. (Reyna, et al. v. COA, G.R. No. 167219, February 8, 2011) 
A) A is correct because write-off is a mode of extinguishing an obligation. 
B) A is correct because write-off is a compromise of liability. 
C) A is correct because write-off is a condonation of an obligation. 
D) A is not correct because in making the write-off, only the creditor takes action by removing the uncollectible account from its books even without the approval or participation of the debtor, hence, there is no extinguishment of the obligation. (Reyna, et al. v. COA, G.R. No. 167219, February 8, 2011)

Question 12

A and B entered into a contract, subject to the condition that in case the Senate will not concur in to the treaty, neither party will be liable. The Senate rejected it. Can A invoke force majeure or fortuitous event as a ground to exempt himself from liability?

Accepted Answer

A) No, because it is not an act of God. 
B) Yes, because of the binding effect of contracts. 
C) Yes, because while the non-concurrence is foreseeable, it is beyond their control. 
D) Yes, because of the principle of liberty of contracts. (Philcomsat Corp. v. Globe Telecom, Inc. 25 May 2004. Sicam v. Jorge, 8 August 2007). 
A) No, because it is not an act of God. 
B) Yes, because of the binding effect of contracts. 
C) Yes, because while the non-concurrence is foreseeable, it is beyond their control. 
D) Yes, because of the principle of liberty of contracts. (Philcomsat Corp. v. Globe Telecom, Inc. 25 May 2004. Sicam v. Jorge, 8 August 2007).

Question 13

A and B entered into a contract for A to manufacture boxes to be used by B for his export business. B paid the amount of ₱2M, but A failed to manufacture the boxes despite repeated follow-up of the immediate production of the boxes. B filed a complaint for reimbursement of the ₱2M.

Accepted Answer

A) The action will not prosper because of lack of demand by B for A to fulfill his obligation. 
B) The action will prosper because the follow-up is the equivalent of demand to comply. 
C) The action will prosper because in reciprocal obligations rescission is implied in case of non-performance. 
D) The action will prosper, otherwise, A will enrich himself at the expense of B. 
A) The action will not prosper because of lack of demand by B for A to fulfill his obligation. 
B) The action will prosper because the follow-up is the equivalent of demand to comply. 
C) The action will prosper because in reciprocal obligations rescission is implied in case of non-performance. 
D) The action will prosper, otherwise, A will enrich himself at the expense of B.

Question 14

X communicated to Y that he was selling his house and lot and gave him an option to buy the same up to the end of the month of September. Y accepted the offer with an agreement that Y will allow X to stay in his house in Los Angeles, California during Christmas time that year. Is the option binding upon X?

Accepted Answer

A) The option is not binding since no payment in the form of money was delivered to X by Y. 
B) The option is not binding because no property or anything of value was delivered to X by Y. 
C) The option is binding as the consideration can be in an undertaking. 
D) The option is not binding or void because no consideration at all was paid. 
A) The option is not binding since no payment in the form of money was delivered to X by Y. 
B) The option is not binding because no property or anything of value was delivered to X by Y. 
C) The option is binding as the consideration can be in an undertaking. 
D) The option is not binding or void because no consideration at all was paid.

Question 15

A owes money to B evidenced by a PN payable on A's birthday. When A was celebrating his birthday, B put the PN inside an envelope and delivered it to A. What is the effect of B's act?

Accepted Answer

A) Nothing as there was no intention to extinguish the obligation. 
B) Nothing as B did not state his intention to condone the obligation. 
C) The delivery of the PN implies the renunciation of the action which B had against A. (Art. 1271, NC
C)  
D) Nothing as condonation must be accepted. 
A) Nothing as there was no intention to extinguish the obligation. 
B) Nothing as B did not state his intention to condone the obligation. 
C) The delivery of the PN implies the renunciation of the action which B had against A. (Art. 1271, NC
C)  
D) Nothing as condonation must be accepted.

Question 16

The attestation in the will of A omitted to state that the testator signed the pages of the will in the presence of the instrumental witnesses. Can evidence aliunde be admitted to prove such fact in the probate proceeding?

Accepted Answer

A) Yes, to give due course to the petition for probate. 
B) No, because such fact cannot be determined from an examination of the will itself. 
C) Yes, because the will of a person is his voice even after his death. (Reyes v. C
A)  
D) Yes, because the court should give tender care to the will. 
A) Yes, to give due course to the petition for probate. 
B) No, because such fact cannot be determined from an examination of the will itself. 
C) Yes, because the will of a person is his voice even after his death. (Reyes v. C
A)  
D) Yes, because the court should give tender care to the will.

Question 17

A and B entered into a compromise agreement dated April 29, 2007 and approved on July 1, 2007. It states that A will pay B the amount of ₱1M within one (1) year from the execution of the agreement. What is the reckoning point of the one (1) year period?

Accepted Answer

A) From the approval of the compromise. 
B) From the receipt of the judgment based on compromise. 
C) From the date of the execution of the compromise. 
D) 15 days after receipt of the judgment. (Santos Ventura Hocorma Foundation, Inc. v. Santos, 5 November 2004). 
A) From the approval of the compromise. 
B) From the receipt of the judgment based on compromise. 
C) From the date of the execution of the compromise. 
D) 15 days after receipt of the judgment. (Santos Ventura Hocorma Foundation, Inc. v. Santos, 5 November 2004).

Question 18

Which is not correct in the following statements:

Accepted Answer

A) Collation is a mere mathematical operation by the addition of the value of donations made by the testator to the value of the hereditary estate. 
B) Collation is the return to the hereditary estate of property disposed of by gratuitous title by the testator during his lifetime. 
C) One of the purposes of collation is to secure equality among the compulsory heirs in so far as it is possible and to determine the free portion after finding the legitime so that inofficious donations may be reduce 
D) (6 Manresa 406) 
A) Collation is a mere mathematical operation by the addition of the value of donations made by the testator to the value of the hereditary estate. 
B) Collation is the return to the hereditary estate of property disposed of by gratuitous title by the testator during his lifetime. 
C) One of the purposes of collation is to secure equality among the compulsory heirs in so far as it is possible and to determine the free portion after finding the legitime so that inofficious donations may be reduce 
D) (6 Manresa 406)

Question 19

A lent money to B in 1950 payable in 1951. Despite demand, B failed to pay. In 2011, his daughter who recently became a lawyer sent a demand for payment to B who sent a letter acknowledging the debt and asked for one (1) year to pay but failed to pay within the extended period. A filed a complaint for sum of money. How do you think the court will decide?

Accepted Answer

A) Dismiss the action due to prescription. 
B) Dismiss due to laches. 
C) Decide for A because there was a waiver of prescription acquired by B. (Art. 1112, NC
C) . 
D) Dismiss on the ground of estoppel. 
A) Dismiss the action due to prescription. 
B) Dismiss due to laches. 
C) Decide for A because there was a waiver of prescription acquired by B. (Art. 1112, NC
C) . 
D) Dismiss on the ground of estoppel.

Question 20

Is a stipulation in a contract of lease granting the lessee an exclusive right to renew the contract valid?

Accepted Answer

A) No, because it is violative of the principle of mutuality of contracts. 
B) No, because validity or compliance cannot be left to the will of only one of the parties. 
C) Yes, it is fundamentally part of the consideration in the contract. (Allied Bank v. CA, January 16, 1998) 
D) No, it is contrary to law. 
A) No, because it is violative of the principle of mutuality of contracts. 
B) No, because validity or compliance cannot be left to the will of only one of the parties. 
C) Yes, it is fundamentally part of the consideration in the contract. (Allied Bank v. CA, January 16, 1998) 
D) No, it is contrary to law.

Consent in a contract is manifested by any of the following acts, except:

A & B entered into an oral contract of sale of A's car worth ₱4.5M where the object was supposed to be delivered upon payment of the price. When A went to B's house to pay the price, the latter refused to sell hence, a complaint for specific performance was filed by A. will the complaint prosper?

A is indebted to B in the amount of ₱2M. When the obligation became due and demandable B delivered to A his car and A accepted it. A month later A sued B for sum of money. Can B interpose the defense of dacion en pago?

The following enumeration is correct, except:

An action pauliana is an action to rescind contracts in fraud of creditors. The following are its requisites, except:

A borrowed money from Metrobank and executed a mortgage over his house and lot as security. No period has been agreed upon on the date of payment. Before the lapse of ten (10) years, the bank foreclosed the mortgage. Is the bank correct?

A lent money to B with a penalty clause providing for 6% per month. In case a suit is filed, what do you think the court will do with the penalty?

When A's obligation to B became due and demandable, A offered to pay, but refused to accept payment. State the remedies of A.

Which of the following is not correct in connection with the requisites of rescission?

A and B entered into a contract, subject to the condition that in case the Senate will not concur in to the treaty, neither party will be liable. The Senate rejected it. Can A invoke force majeure or fortuitous event as a ground to exempt himself from liability?

A and B entered into a contract for A to manufacture boxes to be used by B for his export business. B paid the amount of ₱2M, but A failed to manufacture the boxes despite repeated follow-up of the immediate production of the boxes. B filed a complaint for reimbursement of the ₱2M.

A owes money to B evidenced by a PN payable on A's birthday. When A was celebrating his birthday, B put the PN inside an envelope and delivered it to A. What is the effect of B's act?

The attestation in the will of A omitted to state that the testator signed the pages of the will in the presence of the instrumental witnesses. Can evidence aliunde be admitted to prove such fact in the probate proceeding?

A and B entered into a compromise agreement dated April 29, 2007 and approved on July 1, 2007. It states that A will pay B the amount of ₱1M within one (1) year from the execution of the agreement. What is the reckoning point of the one (1) year period?

Which is not correct in the following statements:

Is a stipulation in a contract of lease granting the lessee an exclusive right to renew the contract valid?

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Exam 18: Contractual and Legal Issues

Consent in a contract is manifested by any of the following acts, except:

A & B entered into an oral contract of sale of A's car worth ₱4.5M where the object was supposed to be delivered upon payment of the price. When A went to B's house to pay the price, the latter refused to sell hence, a complaint for specific performance was filed by A. will the complaint prosper?

A is indebted to B in the amount of ₱2M. When the obligation became due and demandable B delivered to A his car and A accepted it. A month later A sued B for sum of money. Can B interpose the defense of dacion en pago?

The following enumeration is correct, except:

An action pauliana is an action to rescind contracts in fraud of creditors. The following are its requisites, except:

A borrowed money from Metrobank and executed a mortgage over his house and lot as security. No period has been agreed upon on the date of payment. Before the lapse of ten (10) years, the bank foreclosed the mortgage. Is the bank correct?

A lent money to B with a penalty clause providing for 6% per month. In case a suit is filed, what do you think the court will do with the penalty?

When A's obligation to B became due and demandable, A offered to pay, but refused to accept payment. State the remedies of A.

Which of the following is not correct in connection with the requisites of rescission?

A and B entered into a contract, subject to the condition that in case the Senate will not concur in to the treaty, neither party will be liable. The Senate rejected it. Can A invoke force majeure or fortuitous event as a ground to exempt himself from liability?

A and B entered into a contract for A to manufacture boxes to be used by B for his export business. B paid the amount of ₱2M, but A failed to manufacture the boxes despite repeated follow-up of the immediate production of the boxes. B filed a complaint for reimbursement of the ₱2M.

A owes money to B evidenced by a PN payable on A's birthday. When A was celebrating his birthday, B put the PN inside an envelope and delivered it to A. What is the effect of B's act?

The attestation in the will of A omitted to state that the testator signed the pages of the will in the presence of the instrumental witnesses. Can evidence aliunde be admitted to prove such fact in the probate proceeding?

A and B entered into a compromise agreement dated April 29, 2007 and approved on July 1, 2007. It states that A will pay B the amount of ₱1M within one (1) year from the execution of the agreement. What is the reckoning point of the one (1) year period?

Which is not correct in the following statements:

Is a stipulation in a contract of lease granting the lessee an exclusive right to renew the contract valid?

Succession and Probate Law

Inheritance, Property and Ownership Laws

Property and Family Law

Philippine Laws and Marriage

Legal and Contractual Queries

Contractual and Partnership Issues

Legal and Contractual Obligations

Loans, Fraud, Liability, and Sale of Land

Obligation Scenarios in Civil Law

Legal Obligations and Their Application

Family and Marriage Law: Marriage, Divorce, Inheritance, and Property Rights

Family Law: Filiation, and Custody

Family Law: Marital Issues, Adoption, and Property Relations

Property Ownership and Rights

Legal Issues in Property Ownership and Easements

Donation, Probate, and Reserva Troncal in Philippine Law

Inheritance and Probate Law

Contractual Obligations and Remedies

Contracts of Sale and Property Ownership

Legal Contracts, Partnerships, and Agency Law

Contractual Obligations and Liabilities

Legal Liability and Damages

Land Ownership and Registration Issues

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