NATIONAL COLLEGE OF BUSINESS AND ARTS

Cubao-Fairview-Taytay
FIRST SEMESTER SY 2018-2019

PRE – FINALS QUIZ 1 1.5 HRS

BUSINESS LAW 1 LAWS ON OBLIGATIONS & CONTRACTS

INSTRUCTIONS: Select the correct answer for each of the following questions. Mark only one answer for
each item.

PART 1 - IDENTIFICATION
FOR NUMBERS 1 - 20
A. Valid B. Rescissible C. Voidable D. Unenforceable E. Void

1. Contract in writing contemplating and asking for impossible service. E

2. That where one party is incapable of giving consent C
3. That which is entered into the name of another person by one who has been given no authority, D
4. That which does not comply with the Statute of Frauds D
5. Oral authority given to an agent in sale of land. E
6. Oral partnership agreement where immovable property is contributed E
7. Oral contract of loan for more than P5,000.00 A
8. Mr. X sold his ward’s house worth P1M for only P500,000, B
9. Mr. X, 16 years old, sold his house worth P1M for only P500,000 C
10. Those where the consent is vitiated by mistake, violence, intimidation, undue influence or fraud. C
11. Those whose object is outside the commerce of man E
12. Those where both parties are incapable of giving consent to a contract. D
13. That whose object did not exist at the time of transaction E
14. Those undertaken in fraud of creditors when the latter cannot in any other manner collect the B
claims due them
15. Deed of Sale involving Taal Volcano E
16. Oral anthicresis contract E
17. Oral lease of land for 6 months A
18. An absolutely simulated or fictitious contract E
19. An oral contract of sale involving a land D
20. An oral contract of sale involving a calculator sold for Php500 D

PART II - MULTIPLE CHOICE:

21. A, B and C are solidary debtors of W and Y, joint creditors for Php 12,000 where the share of the
debtors in the obligation is 2:3:5 while the share of the creditors is 1:2. If A is insolvent, which of the
following is correct?
A. W can collect from B Php 3,200.
B. Y can collect from C Php 6,400.
C. W or Y can collect from B and C Php 12,000.
D. Y can collect from either B or C Php 8,000.

22. Using the preceding number, but the creditors are solidary and B is a minor, which of the following is
correct?
A. W can collect from C Php 8,400.
B. Y can collect from C Php 8,000.
C. W or Y can collect from C Php 12,000.
D. The insolvency of A will be shouldered by B and C in proportion to their respective obligations.
23. If the contract stated the diligence which is to be observed in the performance of the obligation
Statement 1 – that which is expected of a good father of a family shall be required
Business Law 1 Obligations and Contracts
Statement 2 – that which is required by law shall be observed
A. Both statements are true
B. Both statements are false
C. Statement 1 is true
D. Statement 2 is true

24. When a condition has been imposed with the intention of suspending the efficacy of an obligation to
give, which of the following shall be observed during the pendency of the condition?
A. If the thing is lost, the obligation shall be extinguished
B. When the thing deteriorates, the impairment is to be borne by the creditor
C. If the thing perished, or goes out of commerce, or disappears in such a way that its existence
is unknown or it cannot be recovered, the debtor shall be obliged to pay damages.
D. If the thing is improved by nature, or by time, the improvement shall inure to the benefit of the
creditor

25. Statement A – merger which takes place in the person of the principal debtor or creditor benefits the
guarantors
Statement B – Confusion which takes place in the person of the guarantors does not extinguish the
obligation
A. Only Statement A is true
B. Only Statement B is true
C. Both Statements are true
D. Both statements are false

26. A owes B P100,000 secured by a mortgage. C, girlfriend of A, and with no interest at all in the
obligation, paid B the P100,000 without the knowledge of A. Which of the following course of action
is allowed?
A. C can recover P100,000 from A
B. C can foreclose the mortgage
C. C is subrogated to the rights of B
D. C is a person who is interested in the fulfillment of the obligation

27. Which of the following combinations of conditions will render an obligation void?
A. Suspensive – potestative (creditor)
B. Suspensive – potestative (debtor)
C. Relsolutory – potestative (creditor)
D. Resolutory – potestative (debtor)

28. One of the following obligations is void. Which is it?

A. D to give C P10,000.00 if D goes to Davao.
B. D to give C P10,000.00 if C goes to Davao.
C. D to give C P1,000.00 a month until D returns from Davao.
D. D to give C P10,000.00 if C does not fly like a bird.

29. Which of the following is not an obligation with a period?

A. “I will pay you little by little.”
B. “I will pay you when I have the means.”
C. “I will pay you as soon as possible.”
D. “I will pay when my loan is approved by the bank.”

30. D is obliged to give C a house and lot if C will not marry X within one year. Which of the following
statements is incorrect?
A. D’s obligation becomes demandable if the one-year period expires without C having married X.
B. D’s obligation becomes demandable if X dies before the one-year period expires without C
having married X.
C. D’s obligation is extinguished if C marries X within the one-year period.
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D. D’s obligation is demandable if C marries X within the one-year period.

31. A, B and C are jointly indebted to X in the amount of P12,000.00. C was a minor at the time the
obligation was constituted X may collect:
A. P6,000.00 from A, and P6,000.00 from B.
B. P12,000.00 from A, or P12,000.00 from B.
C. P4,000.00 from A, and P4,000.00 from B.
D. P8,000.00 from A, or P8,000.00 from B.

32. D is obliged to paint the car of C in three days. The parties stipulated that in case D failed to paint
the car within the said period, D would give 5 grams of “shabu” as penalty for every day of delay.
Principal Obligation Penalty
A. valid Valid
B. Void Void
C. Void Valid
D. Valid Void

33. The delivery of promissory notes payable to order, or bills of exchange or other mercantile documents
shall produce the effect of payment when they:
A. Have been cashed.
B. Are delivered.
C. Are deposited in the bank.
D. Have been impaired without the fault of the creditor.

34. Compensation is different from merger because in compensation:

A. There are two debtors and two creditors.
B. There is one debtor and creditor.
C. The debtor and the creditor refer to the same person.
D. Payment is impossible.

35. The essential elements of a real contract are consent, object, cause and:
A. Execution of a public instrument. C. Delivery of the object of the contract.
B. Execution of a private instrument. D. Formalities required by law.

36. Which of the following is a solemn contract that is required to be in a public instrument for its
perfection?
A. Contract of partnership where immovable property is contributed.
B. The sale of a building.
C. The mortgage of a land.
D. The acceptance of an inheritance.

37. Which of the following is not a principal contract?

A. Depositum C. Commodatum
B. Pledge D. Sale of personal property

38. Which of the following is a principal contract?

A. Simple loan of money C. Real estate mortgage
B. Guaranty D. Pledge
39. A contract where the parties give equal or almost equal values is known as:
A. Commutative contract. C. Aleatory contract.
B. Cumulative contract. D. Equitable contract.
40. These contracts are presented to you:
I. Contract of partnership.
II. Contract of agency.

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Which of the foregoing contracts is a preparatory contract?
A. Contract I. C. Contracts I and II.
B. Contract II. D. Neither of the two.

41. These statements are presented to you:

I. An aleatory is one whose fulfillment depends upon chance; thus, the values given vary
because of the risks involved.
II. The sale of a sweepstakes ticket is an example of an aleatory contract.

In your evaluation of the foregoing statements:

A. Both statements are true. C. Only statement I is true.
B. Both statements are false. D. Only statement II is tue.

42. Dominador delivered his bracelet to Maximiano for Maximiano’s necklace. No written agreement was
signed by the parties. Which of the following are appropriate descriptions of the contract between
Dominador and Maximian?
A. Onerous and bilateral. C. Bilateral and innominate.
B. Onerous and innominate. D. Aleatory and innominate.
43. To be valid and enforceable, the following contracts should be in writing, except:
A. Contract to pay interest on loan
B. Contract of donation of real property
C. Contract giving authority to an agent to sell a piece of land
D. Contract made in consideration of marriage

44. A, minor, sold the ring of his brother without authority. The ring has a fair market value of P1M and
selling price was P600,000. The contract is
A. Rescissible C. Unenforceable
B. Voidable D. Void
45. A contract where the cause with respect to each contracting party is the prestation or the promise of
a thing or service by the other is:
A. An onerous contract.
B. A gratuitous contract.
C. A remuneratory contract.
D. an aleatory contract.

46. A contract where one party receives no valuable consideration and the cause is the liability of the
benefactor is”
A. A gratuitious contract.
B. A remuneratory contract.
C. An onerous contract.
D. A commutative contract.

47. C and his family who have just relocated to a new neighborhood, were unloading their furniture and
other personal effects from their truck when D, their neighborhood, offered his help. C gladly accepted
D’s offer. After the job was completed, C gave P500.00 to D. The contract between D and C is:
A. A remuneratory contract.
B. A gratuitous contract.
C. An onerous contract.
D. Some other contract.

48. Reformation shall cure the defect in the instrument of the following contracts except:
A. Wills and testament.
B. A Contract of Lease mistakenly made as a Contract of Mortgage
C. A Contract of Sale fraudulently made as a Contract of Lease.
D. When through negligence a contract of mortgage was made as a sale

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49. On April 10, 2015 M entered into a contract with P. On May 8, 2015, M discovered the fraud
committed by P at the time the contract was perfected. The action for annulment on the ground of
vitiated consent must be brought:
A. Within four years from April 10, 2015
B. Within three years from the time of the commission of the vice of consent
C. Within four years from May 8, 2015
D. On May 8, 2015

50. 1st Statement – Unless the application of payment is expressly stated, the payment shall be applied
to the obligation most burdensome or onerous to the debtor.
2nd Statement – Dacion en pago is commutative and governed by the law on sales
A. 1st statement is wrong, 2nd statement is correct C. Both statements are correct
B. 1st statement is correct, 2nd statement is wrong. D. Both statements are wrong.
51. A thing is considered lost in any of the following circumstances except:
A. perishes C. disappears
B. deteriorates D. goes out of commerce

52. The creditor has a right to the fruits of the thing subject matter of the obligation:
A. from the perfection of the contract
B. from the time the fruits are physically delivered to him
C. from the time the obligation to deliver the principal thing arises
D. from the moment of the meeting of the minds

53. Who is liable for the loss of the subject matter by fortuitous event?
A. creditor C. debtor
B. both creditor and debtor D. nobody

54. A kind of obligation where each one of the debtors is proportionately liable and the object is not
physically divisible into different parts.
A. joint-divisible obligation C. joint-indivisible obligation
B. divisible-solidary obligation D. solidary-indivisible obligation

55. An obligation where only one prestation has been agreed upon is called:
A. Simple obligation C. Mixed obligation
B. Alternative obligation D. Facultative obligation

56. A, a jeepney driver, driving recklessly, caused serious physical injuries to his passenger B and
pedestrian C. As a result, which of the following is not correct?
A. B may proceed against A for culpa criminal
B. B may proceed against A for culpa contractual
C. C may proceed against A for culpa aquiliana
D. C may proceed against A for culpa criminal

57. 1st Statement - In novation by way of expromission, there is revival of the original debtor’s obligation
if the new debtor’s insolvency is known to the original debtor and also known to the public.
2nd Statement - In novation by way of delegacion, there is revival of the original debtor’s obligation
if the new debtor is insolvent at the time of delegacion and such insolvency is known to the public
even if not known to the original debtor.
A. Both statements are false. C. First false, second true.
B. Both statements are true. D. First true, second false.

58. The following contracts are not perfected until the delivery of the object of the obligations except:
A. Pledge B. Deposit C. Mutuum D. Barter

59. 1st Statement – Contracts entered into in the name of another person by one who has no authority
to do so is rescissible if the owner suffered lesion of more than one-fourth of the value of the property
sold.
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2nd Statement - Compensation will extinguish the obligation as when the creditor will gratuitously
abandon all his rights against the debtor.
A. Both statements are wrong. C. 1st statement is correct, 2nd statement is wrong.
B. Both statements are correct. D. 1st statement is wrong, 2nd statement is correct

60. When the parties do not intend to be bound at all by their agreement, the contract is
A. Apparent contract C. Absolutely simulated
B. Assignment D. Relatively simulated

61. When the characteristics of the creditor and the debtor are merged in one and the same person,
there is extinguishment of the obligation by:
A. Compensation B. Novation C. Confusion D. Rescission

62. The leviable properties of the debtor are transferred to the creditors to be sold and from the proceeds,
the creditors are paid:
a. Do ut facias c. Dacion en pago
b. Cession en pago d. Barter

63. A remedy in equity by means of which a written instrument is made or construed so as to express or
confirm the real intention of the parties when some error or mistake is committed.
A. ratification B. cancellation C. annulment D. reformation

64. The elements of a contract without which a contract would not exist.
A. Essential elements
B. Natural elements
C. Accidental elements
D. Ordinary elements

65. A juridical relation arising from certain lawful, voluntary and unilateral acts, and which has for its
purpose the payment of indemnity to the end that no one shall be unjustly enriched at the expense
of another.
A. Quasi-delict C. Qausi-tradition
B. Quasi-contract D. Quasi-relation

66. The return of what has been paid by mistake is known as:
A. Negotiorum gestio. C. Quai-delict.
B. Solution indebiti. D. Culpa aquiliana.

67. These statements are presented to you:

I. A quasi-contract is an implied contract.
II. A contract is the result of the conformity of wills of the parties.

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.

68. It is a thing that is particularly designated or physically segregated from all others of the same class.
A. Generic thing.
B. Indeterminate thing.
C. Determinate thing.
D. Special thing.

69. These statements on simulation of contracts are presented to you:

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I. Absolute simulation of a contract takes place when the parties make it appear that there is a
contract when none exists.
II. Relative simulation of a contract place when the parties make it appear that they entered into
a certain contract but it is different from that which they really agreed to.
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.

70. Oscar is obliged to give Orlando his Toyota Wigo car with plate number AAD456 on April 1, 2015.
Oscar did not yet deliver the car on the said date and the car was totally destroyed by an earthquake
on April 11, 2015. Is Oscar still liable?
A. No, the obligation is extinguished.
B. Yes, Orlando can claim damages.
C. No. Even Orlando is already in default and Oscar can plead impossibility of performance.
D. Yes, Orlando can instead demand for another car of equivalent value from Oscar.

**** THE END ****

GOD BLESS!

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