OBLIGATIONS

1.

Consent is an essential requisite of obligation.

2.

A thing is indeterminate if it is not physically segregated from

all others of the same class.

3.

In obligations with a term, the obligation arises upon the

arrival of the period.

4.

In obligations with a penal clause, the debtor may exempt

himself from the performance of the obligation by paying the
penalty.

5.

The insolvency of one debtor will increase the liability of his

co-debtors.

6.

The indivisibility of an obligation necessarily gives rise to

solidarity.

7.

Whenever a period is designated in an obligation, it is for the

benefit of both the creditor and debtor.

8.

When the fulfillment of the obligation is dependent upon the

sole will of the debtor, the conditional obligation shall be void.

9.

In facultative obligation, the right of choice belongs to the

debtor unless it has been expressly granted to the creditor.

EXTINGUISHMENT OF OBLIGATIONS
FALSE

1.

TRUE

2.

TRUE

3.

FALSE

4.

TRUE

5.

FALSE

6.

FALSE

7.
8.

FALSE

9.

FALSE

10.

TRUE

11.

CERTIFICATI
ON
TRUE
TRUE

12.
13.
14.
15.

TRUE

16.

TRUE

17.

FALSE

18.

Consignation, to be valid, generally requires a prior

tender of payment
Consignation of the amount required is not necessary to
preserve the right to redeem.
Difficulty of service authorizes release of obligor but
does not authorize courts to modify or revise the
contract between the parties.
It is a concept that derives from the principle that since
mutual agreement can create a contract, mutual
disagreement can cause its extinguishment.
Where an application for a loan of money was approved,
there arises a perfected contract even before the
delivery of the object of the contract.
If the obligation has been substantially performed, the
obligor shall recover as though there had been a strict
and complete fulfilment.
(less damages suffered by the obligee)
When the obligee accepts the performance knowing its
incompleteness or irregularity, the obligation is deemed
fully complied with. (without expressing any protest or
objection)
Payment by a judgment debtor to the wrong party does
not extinguish judgment debt.
Obligations requiring payment in foreign currency must
be discharged in Philippine currency as provided by RA
8183.
(RA 529)
An agreement to pay a promissory note in dollars, while
null and void under RA 529 does not defeat a creditors
claim.
A ____________ implies that the check is drawn upon
sufficient funds in the .
The fact that the debtor had sufficient available funds.
Consignation presupposes not only that the obligor is
able, ready, and willing to pay but more so in the act of
performing his obligation.
A proof that an act could have been done is no proof
that it was actually done supports the concept known
as tender of payment.
A certified personal check is not the legal tender nor the
currency contemplated, therefore cannot constitute valid
tender of payment.
The rule that in case of extraordinary inflation or
deflation of the currency stipulated should supervene,
the value of the currency at the time of the
establishment of the obligation shall be the basis of
payment of obligations arising from law.
Under the principle of dation in payment, what is
transferred is merely the possession of the property.
(ownership)

TRUE
FALSE

19. There can be no dation in payment when there is no

obligation extinguished.
20. Tender of payment may be extrajudicial.
21. Consignation is necessarily judicial.

CONTRACTS
A. Both false.
B. Both true.
C. True, false.
D. False, true.
D

1. Contracts must bind both parties, its validity or termination cannot

be left to the will of one of them.
Unenforceable contracts are susceptible of ratification.

2. Contracts are perfected by mere consent.

Ratification requires conformity of the contracting parties.

3. Mistake as to the qualifications of one of the parties vitiates

consent.
Contracts take effect between their parties, assigns and heirs.

4. A mere expression of an opinion does not signify fraud.

Incidental fraud invalidates a contract.

5. In contracts of pure beneficence, the cause is the liberality of the

benefactor.
The contract is void if the cause is not stated in the contract.

6. The contracting parties may establish such stipulations, clauses,

terms and conditions as they may deem convenient.
Acceptance by letter or telegram binds the offeror from the time the
letter or telegram is sent.

7. An offer made through the agent is accepted from the time

acceptance is communicated to the agent.
There is violence when in order to wrest consent, serious or
irresistible force is employed.

8. Failure to disclose facts constitutes fraud.

Real contracts, such as mutuum, pledge and guaranty are not
perfected until the delivery of the object of the obligation.

9. Contracts of pure beneficence are contracts without cause.

If the cause is not stated in the contract, it exists and is lawful.

10. A contract may be voidable eve though there may have been no
damage to the contracting parties.

The action or defense for the declaration of the inexistence of a

contract prescribes in 10 years.
Part Two. Multiple choice.
1. On February 11, 2003, Perfecto offered to sell his house and lot to
Reynaldo for P1,500,000.00. Perfecto told Reynaldo that he was
giving Reynaldo up to February 28, 2003 to decide whether or not to
buy the house and lot. Reynaldo accepted the option but did not give
anything to Perfecto to support the option given to him. On May 20,
2003, Perfecto found another buyer who was ready to buy the house
and lot for P2,000,000.00. Perfecto wants to ask you whether he can
still withdraw the offer he made to Reynaldo. Decide.
a. Yes, Perfecto may withdraw the offer because he stands to gain
an added profit of P500,000.00 and this will be more than
enough to pay damages to Reynaldo.
b. Yes, Perfecto may withdraw the offer by just informing
Reynaldo of such fact.
c. No, Perfecto may not withdraw the offer because the option
was accepted by Reynaldo although Reynaldo did not give
anything in support thereof.
d. No, Perfecto may not withdraw his offer until the lapse of the
period given to Reynaldo to exercise his option.
2. Elements that accompany certain contracts unless set aside or
suppressed by the parties, are known as:
a. Natural elements
c. Accidental elements
b. Essential elements
d. Original elements
3. A contract where both parties are required to render reciprocal
prestations, are known as:
a. Bilateral contract
c. Gratuitous contract
b. Unilateral contract
d. Commutative contract
4. Contracts take effect only between the contracting parties, their
assigns and heirs except in cases where obligations and rights arising
from the contracts are not transmissible by their nature, or by
stipulation or by provision of law. This principle is known as:
a. Relativity of contracts
c. Obligatory force of contracts
b. Mutuality of contracts
d. Liberty of contracts
5. Obligations arising from contracts have the force of law between C
(sorry incomplete)
6. One of the following is not a real contract:
a. pledge
c. lease
b. commodatum
d. mutuum
7. On May 1, 2002, S offered to sell a specific car to B for P500,000.00.
B sent his letter of acceptance to S on May 8, 2002. On May 10,
2002, however, S died in a vehicular accident and his secretary

received the letter or acceptance on May 12, 2002 unaware that S

had already died.
a. The contract was perfected on May 8, 2002 when B sent his
letter of acceptance.
b. The contract was perfected on May 12, 2002 when the
secretary of S received the letter.
c. The contract was not perfected because the offer of S
became ineffective when he died.
d. The contract was perfected on May 1, 2002 because the
acceptance made by B on May 8, 2002 retroacts to the date of
the offer.
8. Mistake in three of the following will make a contract voidable. Which
one will not?
a. Mistake as to the substance of the thing which is the object of
the contract
b. Mistake as to the principal conditions which principally moved
one or both parties to enter into the contract.
c. Mistake as to the identity or qualifications of one of the parties,
where identity or qualifications have been the principal cause of
the contract.
d. Simple mistake of account.
9. It is the employment of serious or irresistible force to obtain
consent.
a. Intimidation
c. Violence
b. Threat
d. Moral coercion
10. It is present when one of the contracting parties is compelled
by a reasonable and well-grounded fear of an imminent and grave
evil upon his person or property or upon the person or property of
his spouse, descendants, and ascendants to obtain consent:
a. Violence
c. Intimidation
b. Physical coercion
d. Mistake

MIDTERMS
True or False.
F

1.

Acts and contracts which have for their objects the creation
transmission, modification or extinguishment of real rights over
immovable property must be in a public instrument to be valid
and binding. (not for validity but for greater efficacy)

2.

In consignation, before acceptance by the creditor, the

withdrawal of the sum or thing consigned by the debtor will be
a matter of right. (if made after judicial consignation)

3.

Contract of lease for 2 years is unenforceable if not in writing.

(only if lease of real property)

4.

Tender of payment is required only when the creditor refuses,

without just causes, to accept payment.

5.

An action for rescission of a contract entered into to defraud a

creditor will prosper 4 years from actual discovery of fraud.
(from time of registration)

6.

Undue influence shall annul the obligation, although it may

have been employed by a third person who did not take part in
the contract.

7.

In obligation to deliver a determinate thing, the loss of the

thing while in the possession of the debtor shall be presumed
to be due to his fault. (loss on occasion of calamity)

8.

Rescission shall be only to the extent necessary to cover the

damage caused by a contract in fraud of a creditor.

9.

A conveyance is presumed to be in fraud of creditor if made by

a debtor after a suit is file against him while it is pending.
(conveyance must be onerous title)

10. A contract which is void on its face cannot be the subject of

reformation. (the only the subject of reformation is the real
intention of the parties)

11. Once a contract is perfected, though the same is not in the

form required by law, the contracting parties may compel each
other to observe that form.

12. Lesion or inadequacy of cause shall not invalidate a contract,

unless there has been fraud, mistake or undue influence.

13. The cause in a lucrative contract is the liberality of the

benefactor.

14. An offer may become ineffective upon insolvency of either

party before acceptance is conveyed even if the insolvency is

not judicially declared.
F

15. A contract of sale entered into between spouses is void.

16. A creditor to whom partial payment has been made may

exercise his right for the remainder and he shall be preferred to
the person who has been subrogated in his place in virtue of
partial payment of credit.

17. If novation of the new obligation is void, the original one shall
subsist.

18. In obligation which is subject to suspensive condition or term,

the happening of the condition or event will give rise to the
obligation

19. Conditional obligation where the condition is both suspensive

and potestative is void.

20. Those obliged to deliver or to do something incur in delay only

from the time the obligee judicially or extrajudicially demands
from them the fulfilment of the obligation.

21. No person shall be responsible for those events which could not
be foreseen or which though foreseen were inevitable unless
there is an express stipulation to the contrary.

22. The indivisibility of an obligation does not necessarily give rise

to solidarity.

23. A creditor cannot be compelled partially to receive the

prestations in which the obligation consists.

24. Proof of actual damages suffered by the creditor is not

necessary in order that penalty may be demanded.

25. A person alternatively bound by different prestations shall

completely perform all of them.

26. Any waiver of an action for fraud is void.

27. When the fulfillment of the condition depends upon the sole will
of the debtor, the conditional obligation shall be void.

28. In facultative obligation, the right of choice belongs to the

debtor unless it has been expressly granted to the creditor.

29. Impossible conditions, those which are contrary to good

customs or public policy and those prohibited by law are
deemed not agreed upon.

PARTNERSHIP AND AGENCY

TRU
E
FALS
E

1.

Agency may be oral.

2.

Notice of revocation in a newspaper of general

circulation is sufficient warning to third persons of the
revocation of agency.

TRU
E

3.

The principal may revoke agency at will and compel the

agent to return the documents of agency.

TRU
E

4.

Two or more persons appointed for a common

transaction shall be solidarily liable to the agent for all
consequences of the agency.

TRU
E

5.

The limits of the agents authority are deemed exceeded

even if the act is more advantageous to the principal.

FALS
E

6.

If the agent acted in his own name, the principal has no

right of action against the person with whom the agent
has contracted.

FALS
E
TRU
E

7.

The principal is liable for expenses incurred by the agent.

8.

The agent may retain in pledge object of the agency until

the principal effects reimbursement and pays the agent.

FALS
E

9.

The agent is liable if there is a conflict of interest

between his interests and those of the principal.

FALS
E

10. If the agent is empowered to lend money, he may be the

borrower.

TRU
E
FALS
E
TRU
E
FALS
E

11. Persons not partner may be liable as a partner.

FALS
E
TRU
E
FALS
E
TRU
E
TRU
E

15. Partnership begins from the execution of the contract.

12. Receipt of profits is prima facie evidence of partnership.

13. Partnership may be constituted in any form.
14. Persons prohibited from giving donation or advantage
cannot enter into particular partnership.

16. Every partner I a debtor of the partnership

17. A partner is a co-owner of the partnership property.
18. Every partnership shall operate under a firm name.
19. Contributions of a limited partner may be cash or
property not services.

TRU
E

20. A person may be a general partner and a limited partner

at the same time.

FALS
E
TRU
E
TRU
E
FALS
E
FALS
E

21. Sale of a piece of land thru agentagency is void.

FALS
E

26. All acts of the agent even after the death of the principal,
without his knowledge, is valid.

22. SPA is necessary to waive any obligation gratuitously.

23. SPA to sell includes power to mortgage.
24. SPA to mortgage does not include power to sell.
25. Agency shall remain in full force even after the death of
the principal

CREDIT TRANSACTIONS
TRU
E
FALS
E
FALS
E

1.

Deposit is a real contract.

2.

Deposit is not covered by the Statute of Frauds.

3.

Deposit by a capacitated person with another who is not,

the depositor shall have action to recover while thing is
in possession of the depositary.

FALS
E

4.

The depositary is obliged to keep the thing safely and to

return it to the depositor.

FALS
E

5.

If deposit with a third person is allowed, the depositary

shall not be liable for the loss.

TRU
E

6.

The surety undertakes to pay if the principal does not

pay; the guarantor only binds himself to pay if the
principal cannot pay. The first is the insurer of the debt,
while the other is the insurer of the solvency.

FALS
E
TRU
E

7.

A guaranty is essentially gratuitous.

8.

Guaranty may be constituted to guarantee a voidable

contract.

TRU
E

9.

Guaranty may be constituted to guarantee future

debts...

FALS
E

10. A guarantor cannot be compelled to pay the creditor

unless the latter has exhausted all the properties of the
principal debtor, and

FALS
E

11. The thing deposited may not be used without the

permission of te depositor.

TRU
E

12. The depositary cannot demand that the depositor prove

his ownership of the thing deposited.

FALS
E
TRU
E

13. The thing deposited must be returned upon demand.

FALS
E
FALS
E

15. Loan and deposit are essentially gratuitous.

FALS
E

17. The bailee is not liable for the loss of the thing if due to a
fortuitous event.

14. Deposit of effects by travellers in hotels or inns is a

necessary deposit.

16. Bailor in commodatum acquires use of the thing loaned

without compensation but not its fruits.

FALS
E
FALS
E

18. A contract of deposit is a consensual contract.

19. An escalation clause is void if there is no de-escalation
clause.