BUSINESS LAW 7.

7. A contract wherein both contracting parties are incapable of giving consent and yet ratified by the guardian
Quiz Law on Contracts-PART 1 of
either of the parties is:
a. Rescissible
1. A sent B a letter wherein the former offered to sell his car to the latter for P1M. B signified his intention that b. Voidable
he c. Unenforceable
may buy the same. In As letter, he gave B two weeks to raise the amount .After one week A raised the d. Void
price to P1.5M
Can B compel A to accept the P1M first offered by A and deliver to him the car? 8. Three of the following contract is void .Which one is not?
a. Yes since there was already offer and acceptance a. Oral contract of partnership wherein more than 3,000 has been contributed by the partners
b. Yes because A cannot change his offer without the consent of B b. Agent giving oral authority to sell the land of the principal
c. Yes because A cannot withdraw the offer within two weeks as he is under to estoppel c. Partnership contracts in private instrument wherein immovable have been contributed
d. No because there was no acceptance yet of the offer d. Oral contract of limited partnership

2. A sold a parcel of land to B by word of mouth and delivered to the latter the Transfer of Certificate of Title of 9. Which of the following constitutes fraud?
the land. a. Misrepresentation mad out not in bad faith
Can B compel A to execute the deed of sale of the land? b. Misrepresentation by a third person and both parties mistaken
a. B cannot compel to A to execute the deed of sale as the sale being oral is unenforceable c. Usual exaggerations in trade or dealers /sales talk
b. B cannot compel A because the sale is void being oral d. Failure to disclose facts when there is a duty to reveal them as when the parties are bounded by
c. B can compel A because the contract is enforceable due to the delivery of the TCT to him confidential relations
d. B can compel A because the sale is merely voidable and therefore enforceable, binding until annulled
10. These are the principles in contracts. Which is not?
3. Statement No.1 As a rule contracts take effect only between the parties a. Freedom or autonomy of contracts c. Perfection by mere consent
Statement No.2. Mere incidental benefit of the third person is enough for stipulation pour autri to exist b. Relativity of contracts d. Binding on third person
provide he accepts the same
11. Which of the following constitutes offer?
a. First statement is true second statement is true a. Business advertisements of things for sale
b. First statement is true while the second is false b. Advertisements for bidders
c. Both statements are false c. An offer through an agent
d. First statement is false while the second is true d. Before the acceptance is conveyed, either of the parties dies, civilly interdicted, becomes insane or
insolvent
4. Three of the following objects of contracts except
a. Those things within the commerce of man 12. Statement no.1. There is acceptance of the offer only after it has come to the knowledge of the offer.
b. Services which are not contrary to law, morals, good customs Statement no.2. Lesion or inadequacy of cause shall as a true make a contract defective.
c. in transmissible rights a. Both statements are true c. Both statements are false
d. Heredity of rights b. Second statement is true, first is false d. First statement is true, second is false

5. Statement No.1 Contracts without cause are voidable because is presumed to exist in a contract 13. Statement no.1. If the cause is not stated in the contract it is presumed that it does not exist and therefore
Statement No.2 Offer must be absolute and acceptance must be certain before can there be meeting of the the
minds of parties contract is void.
Statement no.2. In order that a contract may be voidable, there must be damage.
a. First statement is false second statement is true a. Both statements are false c. First statement is false, second is true
b. Both statements are true b. Both statements are true d. First statement is true, second is false
c. Both statements are false
d. First statement is true while the second is false 14. The action to annul avoidable contract is extinguished by:
a. Novation c. Rescission
6. Statement no.1 Contract of lease of a parcel of land for a term of one year must be written otherwise b. Ratification d. Estoppel
unenforceable 15. Which of the following contract is unenforceable?
Statement no.2 Contract of sale of a parcel of land must be in public instruments otherwise unenforceable a. One of the contracting parties is incapable of giving consent.
b. Contract of lease of a car for two years orally entered into.
c. Oral contract of sale or land.
a. First statement is false second statement is true d. Mortgage contract in private instrument.
b. Both statements are true 16. Which of the following contracts is not void ab initio?
c. First statement is true while the second is false a. Those whose object is outside the comer.
d. Both statements are false b. Those whose object did not exist at the time of transaction.
c. Those which contemplate an impossible service.
d. Those undertaken in fraud of creditors.
17. Contract which cannot be sued upon unless ratified, thus it as if hey no effect yet: a. First is true, second is false. c. Both are false.
a. Voidable c. Void b. First is false, second is true d. Both are true
b. Rescissible d. Unenforceable 26. A sold in writing to B his sterio set for Php600.00. There is no delivery from A and no payment of the price
18. Which of the following contracts is valid? from B.
a. Oral contract of agency giving authority to an agent to sell the land of the principal. Contract is:
b. Oral partnership agreement where immovable are contributed. a. Voidable c. Void
c. Oral contract of sale of an entered into by an agent who given oral authority by the principal b. Unenforceable d. Enforceable
d. Oral agreement to answer all the expenses for the wedding reception if A marries B.
19. A sold to B genuine bottle of Fundador brandy. However, upon delivery the former substituted a fake, B now 27. If the words of the contract are clear and leave no doubt on the intention of the parties, interpretation of
wants contracts
to annul the sale. Decide: may be proper.
a. The contract is void ab initio therefore it can be annulled. In case of gratuitous contracts, doubts shall be resolve in favor of greatest reciprocity of interest.
b. The contract can be annulled since it is voidable due to fraud. a. The first statement is false: second is true
c. The contract cannot be annulled because it is only incidental fraud. b. The first statement is true: second is false
d. There is dolo incidente therefore it can be annulled. c. Both are true
d. Both are false
20. G was appointed as the guardian of M who owns a parcel of land value at Php 1M. M sold the land only for 28. S sold his parcel of land only for Php 1M although the value of the same is Php 2M. He thus suffer damage
Php. 7M to B. or lesion in the
The contract is defective because; sale due to the inadequacy of the price. Therefore the contract is
a. Unenforceable c. Voidable a. Voidable c. Valid, not defective
b. Rescissible d. Void b. Unenforceable d. Rescissible

21. S was intimidated by to sell to the latter his parcel of land at a very law price. C, the creditor of S was thus 29. Statements;
damaged In case of doubt, a contract purporting to be sale shall be constructed as mortgage.
since the former has no other means of collecting from S. In annulment of contracts, there shall always be mutual restitution of both parties thereof.
The remedy of S: a. First statement is false, second is true c. Both are true
a. Rescission c. Have it declared by the court as void b. Both are false d. First statement is true, second is false
b. Annulment d. Reformation of the contract
22. Which of the following contracts must be in writing to be enforceable? 30. Statements;
a. Acts and contract for the creation transmission, modification, extinguishments of real rights. Just like voidable and unenforceable contracts, rescissible contracts may be ratified.
b. The cession, repudiation, renunciation of heredity rights. In case of fraud or mistake, the action for annulment must be made within four years from the commission
c. Contract of guaranty of the vice of
d. Contract of partnership consent.
a. Both statements are true c. First is true: second is false
23. S made an offer to B for sale of his car which was received by the latter on January2, 2001. On January4, b. Both are false d. First is false, second is true
2001 B sent a
letter of acceptance by mail. On January 3, 2001 S sent another letter to B withdrawing his offer. In this 31. D, fearing that his creditor C, would go after his only parcel of land to satisfy his claim for payment of Ds
case; debt, sold his
a. There was a perfected sale because of the acceptance of the offer by B before he had knowledge of its land to X who did not know of Ds intention. Decide;
withdrawal a. C can ask for annulment of the sale as this is voidable contract.
by S. b. C. may ask for damage against X since he was damage by the sale.
b.There was perfected sale because S stopped from withdrawing his offer B had knowledge thereof before c. C can file an action for rescission of the sale.
acceptance. d. C cannot ask for the rescission of the sale.
c. No sale took place because before acceptance was conveyed, the offer had been withdrawn.
d. The offer was ineffective for lack of certainty as to the object. 32. Mutual error as to the legal affect of an agree when the purpose of the parties is frustrated may result in
24. Statements: the
An offer made by the principal is accepted from the time acceptance is conveyed to him or his agent. reformation of the instrument.
The object of a contract may be future things including future inheritance. Mutual mistake of the parties and the instrument does not express the true agreement will make the
contract voidable.
a. Both statements are true. c. Second is false, first is true. a. Both statements are false c. First is true, second is false.
b. Both are false. d. Fist is false, second is true. b. Both are true. d. First is false, second is true.

25. Statements: 33. A without authority from B sold the latters car in the name of the latter. The contract is therefore:
A contract which is the direct result of a void contract is voidable. a. Rescissible c. Unenforceable
If the object of the contract did not exist at the time of the transaction it is void. Therefore this may include b. Voidable d. Void
sale future
things,
34. A threatened B with an administrative change for immorality if the latter does not marry her because she is
already
pregnant with their child. Fearing that she may do so, B married her.
The contract of marriage is therefore voidable because of threat. A simple mistake of account may give rise
to the
annulment of the contract because of mistake.
a. First statement is false, second is true c. Both are true
b. Both are false d. First is true, second is false
35. A appointed B to sell his land;
If authority of B is oral and the sale is in public instrument, the sale is void.
If the authority of B is in writing and the sale is oral, the contract is unenforceable.
a. T he first statement is false, the second is true c. Both are true
b. The first is true, second is false d. Both are false
36. In three of the following the contract is cleanse of its defect by ratification. Which is not so ratified?
a. Contract where the creditor was damage by the act of the debtor intended to defraud him.
b. Contract entered into by a person incapable of giving consent.
c. Sale of chattels orally entered into for a piece not less than five hundred pesos.
d. Lease of real property for more than one year orally entered into
37. A gave B One Million Pesos for the latter to kill C. Before B could accomplish his criminal intent to kill C. A
change
His mind and demanded the return of the money from B. Decide;
a. A cannot recover the payment he made to B because it was a void contract which does not allow
recovery by the
guilty party.
b. A cannot recover the money because the contract is unenforceable.
c. A can recover the money although the contract is void since the crime was not committed.
d. No recovery and both A and B will prosecuted for their crime.
38. Because A wants to sell his land to B but the latter does not want to buy the same, A forced B to buy his
land. The land
The contract;
a. Not binding upon B since his consent was vitiated.
b. It is unenforceable as against B but not against A.
c. May be ratified expressly or tacitly by A
d. It is valid, binding and enforceable.
39. D borrowed a sum of money from C with G as guarantor. The loan is in writing but the guaranty is oral. D
failed to pay C.
Who now is demanding payment from G? Can G be compelled to pay?
a. Yes, because he is the guarantor obliged to pay in case the debtor defaults.
b. No, because the guaranty is void having been orally made.
c. No, because the guaranty is unenforceable against G, it being oral.
d. Yes, because the guaranty is enforceable, writing not needed.
.
40. A and B agreed on February 3, 2000 that B will construct the house of A in January 2002. The contract was
orally entered
into. B received a down payment from A with the balance payable after completion of the house. The
contract is;
a. Voidable because it not in public instrument.
b. Enforceable even if not in writing, having been ratified.
c. Unenforceable because it is not in writing and yet performance there is after one year from perfection.
d. Void because it is not in writing as required by law.
41. A sold to B a fake Rolex watch on January 3, 2001, discovered that the watch he bought A was an imitation.
The law
provides that he can annul the sale as a voidable contract within four years. Prescription starts from;
a. January 3, 2001 when the sale was perfected
b. The time of delivery of the watch to B.
c. The time they first talked about the sale of the watch.
d. January13, 2001 when the fraud was discovered by B.
42. A and B agreed on a contract of pledge. However, they entered into a contract of mortgage in the honest
belief that the
mortgage and pledge are the same. The instrument may be reformed;
a. No, the document cannot be reformed since contract is void.
b. No, cannot be change. They are bound by the document which speaks for itself.
c. Yes, it can be reformed because it does not express the true agreement of the parties.
d. Not, it cannot be reformed because there was no meeting of minds between the parties and the remedy
is annulment
of contract.
43. A and B entered into a contract of mortgage. However, as written the document states it is a contract of
sale with right
of repurchase, the error due to the fault of the clerk/typist.
Hence:
a. The contract of sale must be annulled since it is voidable.
b. The instrument has to be enforced as is for it is the proof of the agreement between the parties.
c. because of the negligence of the parties in signing without first reading the instrument, they are bound by
the contents
of the same.
d. The instrument may be reformed because it does not express the true agreement of the parties.
44. S sold to B his parcel of land worth one million pesos for only half a million pesos. After the sale and
realizing his
damage, S is now seeking to set aside the sale. Decide;
a. The contract is voidable because of mistake of the seller.
b. It is rescissible because of the lesion or damage suffers by S.
c. S has the right an increase in the price to prevent unjust enrichment on the part of B.
d. The sale is valid, binding and enforceable because as a rule lesion or inadequacy o cause or price in sale
does not
invalidate a contract.
45. If the cause is not state in the contract, it is presumed that it does not exist.
Lesion or inadequacy of cause as a rule invalidates a contract.
a. First statement is false, second is true
b. First is true, second is false
c. Both are true
d. Both are false
46. D borrowed a sum of money from C with a certain rate of interest. C now wants to increase the rate of
interest without
the consent of D. What principal in contracts prohibits C from doing so?
a. Autonomy of contracts d. Consensuality of contracts
b. Relativity of contracts e. Obligatory force and compliance in good faith
c. Mutuality of contracts
47. Three of the following contracts must be in writing to be valid. Which is the exception?
a. Contract of partnership where immovable are contributed.
b. Contract of agency to sell the land of the principal.
 c. contract where the amount involved exceeds five hundred pesos. Obliged to make restitutions unless he did not benefit by the thing or price received by him.
d. Negotiable instrument. The action for annulment of contracts shall be extinguished when the thing which is the object
therefore is lost
48. A threatened to kill B if the latter would not marry the formers daughter who was pregnant with Bs child. Through fortuitous event or fraud or fault of the person who has right to institute the proceedings.
Intimidated, a. Both statements are incorrect c. First is correct, second is incorrect.
B married As daughter against his will. b. Both are correct. d. Second is correct, first is incorrect.
a. The contract is not voidable because the threat was made by a third person not by one of the parties.
b. The contract is not voidable because the claim for marriage is just or legal and therefore consent is not 56. Ratification of a voidable or unenforceable contract must be made within the prescriptive period provided
vitiated. for by the law.
c. The contract is not voidable since B answer for his fault that As daughter become pregnant. Ratification cleanses avoidable or unenforceable contract from all its defects from the moment it was
d. Voidable is the contract due to intimidation even if employed by a third person. constituted.
a. First statement is false, second is true.
49. The following are characteristics of a contract. Which is the exception? b. Second is false, first is true.
a. The action or defense for three declaration of the inexistence of a contract does not prescribe. c. Both are false.
b. It cannot be ratified. d. Both are true.
c. A contract which is the direct result of a void or illegal contract is voidable.
d. The defenses or illegality of a void contract is not available to the third person whose interests are not BUSSINESS LAW PART II
directly affected.

50. The following are attributes of a voidable contract. Which is not?
a. It is binding, valid and enforceable before annulment.
b. Damage is material to be voidable contract.
c. It can be ratified and ratification has retroactive effect.
d. The capacitated cannot allege the incapacity of the other party
51. The following are attributes of a rescissible contract. Except;
a. It is valid until rescinded
b. Damage or lesion is absolutely material.
c. Third person whose interest is affect may ask for rescission.
d. It is principal remedy of the creditor to collect his credit.
52. Nominate contracts are those without special designations or names under the law.
In nominate contracts shall first be governed by the custom of the place.
a. Both statements are correct. c. Both are incorrect.
b. First is correct, second is false. d. First is incorrect, second is correct.
53. Statements;
Contracts take effect not only between the parties but also their heirs and assigns and the heirs is
liable beyond the value of the property he received from the decedent
In stipulation pour autri, the third person must communicate his acceptance of the stipulation before its
revocation.
1. A offered 20 Tamiya cars to B for P1, 000.00 each. B answer by letter that he was willing to purchase not 20
but 30 pieces at said price of P1, 000.00 each. Is the contract perfected?
a. No because there is qualified acceptance which constitutes an offer by the buyer.
b. Yes, there is perfected sale because the number of pieces is only incidental matter in the sale.
c. Yes, because the letter of acceptance was already sent by the offered.
d. No, because there is no offer yet of A that is certain.
2. Statements;
If one of the parties at the time of making the offer or acceptance was already insane the contract is
voidable.
If before the acceptance is conveyed to the offered, either of the parties becomes insane, the contract
is void, that is,
The offer is no effective.
a. Both statements are incorrect c. First is correct, second is incorrect.
B. Both is correct. d. Second is correct, first is incorrect.
3. A, a minor sold to B a parcel of land registered in his name misrepresenting to the latter that he is of legal
age.
Having been misled as to the true age of A, B entered into the contract. Is the contract voidable?
a. It is voidable because the seller is a person incapable of giving consent to a contract being a minor.
b. It is voidable because of mistaken the part of B when he through that A was of legal age,
c. It is not voidable but rather void because of lack of consent of A who is only a minor without capacity to
enter into
contacts.
d. It is not voidable because of the fraud committed by the minor seller and the buyer being in good faith.

a. Both statements are correct c. First is true, second is false. 4. Corporation, through an agent bought the shares of stocks of another stockholder without revealing to
b, Both are incorrect. d Second true, first is incorrect The seller stockholder that negotiations were in progress to enhance the value of the shares. The sale is
defective contract
54. Statements; being;
If the contract is unenforceable and a public document is necessary for the contracts registration, the a. Void, because of fraud committed by A against the other stockholder.
parties may b. Voidable because of mistake on the part of the seller-stockholder.
Compel each other to make the needed public document. c. Rescissible because of the damage suffered by the seller.
Unenforceable contracts unlike void contracts may be assailed by the third persons. d. Voidable due to the fraud concealment by A against a fellow stockholder.
a. First statement is correct, second is incorrect. c. Both are incorrect.
b. First is incorrect, second is correct. d. Both are correct. 5. While his father was still alive, A sold to B the property he (A) expected to receive from his father.
Is the contract defective?
55. Statements; a. It is completely valid contract because the seller is compulsory heir.
When the defect of the contract consists in the incapacity of one of the contracting parties, the b. It is valid for there can be sale of future things and what A sold is future property.
incapacitated is c. It is voidable sale if he fails to receive the property he expected to receive from his father.
 d. It is void for future inheritance cannot be sold. 13. A and B mutually promised to marry each other. The promise being verbal and without witnesses to the
promise,
6. A promise to give B a car as reward after B has killed C. Later, after the killing, the contract was changed to a A did not marry B. B is now suing A for damages .Decide:
lease of a. The contract is unenforceable; hence, A is not liable
a big house for a certain period. b. The contract is unenforceable because mutual promise to marry is covered by the Statue of Frauds
The contract of lease is; c. A is liable for damages even the contract is unenforceable
a. Void c. Voidable d. A may be liable for damages because mutual promise to marry is covered by the Statue of Frauds
b. Unenforceable d. Rescissible
14. A and B neighbors orally agreed that from day, B would not erect a garage on his property till after three
7. S orally sold to B a parcel of land for which the latter paid P1. B now wants to register the sale so that he can years.
have a A week later B begun to erect a garage in violation of the agreement. A complains and B sets up the
Transfer Certificate of Title in his name. Decide. defense of
a. S cannot be compelled to execute the public document of sale because the sale is unenforceable. contract being unenforceable. Decide
b. S can be compelled to execute the public document of sale because the sale is enforceable. a. The contract is unenforceable because it is not performed within one year from the making thereof, and
c. The sale is void and therefore cannot be registered. it is oral
d. S cannot be compelled to execute the public document of sale because the sale is voidable. b. B can compelled to demolish the fence because he failed in his obligation not to do.
c. A can have a third person to undo what has been done by in violation of his obligation not to do
8. S orally leases to R his parcel of land for a term of two years. The contract is; d. A has the right to complain and enforce the contract because it is enforceable
a. Rescissible b. Voidable c. Unenforceable d. Void
15. A and B orally agreed that A would sell and B would buys As radio for 200.00 three years from the date of
the
9. A verbal agreement was made between A and B whereby y A and agreed to sell and agreed to buy As of agreement .At the end of the three years, A refused to hand over the radio although B was willing to
farm for 100,000.00. The price was unpaid. Possession was not given nor did the deed deliver both being pay.
refused. Is A bound to deliver the radio sold?
The contract is: a. A is obliged to deliver what he sold since it was an enforceable sale
a. Rescissible b. Voidable c. Unenforceable d. Void b. A is obliged to deliver B is ready to pay the price
c. A is not bound to deliver because the sale is unenforceable
10. A orally leased to B his car for two 2 years .No delivery of the car was made and no payment of the rentals d. A is not bound to deliver because the sale is void
was
given .A refuses to pay the rentals in advance as agreed upon. 16. A forced B to sell to him (A) his ring. B sued for annulment, but A had already lost the ring thru a fortuitous
a. A may rightfully refuse because of the contract is unenforceable event.
b. A cannot refuse because of the contract is forceable Is A liable for the loss?
c. B cannot compel A to do something against the latters will a. A is liable for the loss even it was due to fortuitous event because of his bad faith
d. The contract is reciprocal and therefore A cannot be compelled to pay because there was no delivery of b. A is liable not because the loss was without his fault
the car. c. A is liable to pay damages if he cannot replace the ring
d. A is not liable because no one shall be responsible for the loss of thing due to fortuitous event
11. A borrowed money from C with as a guarantor. The contract of loan of P1M was not in writing while the
guaranty 17. A was forced by B to sign a contract. C, a creditor of A wants to annul the contract. Is C allowed by law
a. C is liable because the guaranty is enforceable although the loan is void it being oral to do so?
b. C is liable because of the accessory of contract the guaranty is void since the principal contract of loan a. No because a third person cannot assail a void contract
is void b. Yes because the contract is voidable and C is damaged
c. C is liable because the guaranty is enforceable c. No because a third person cannot assail avoidable contract.
d. C is liable because the contract of loan is in amount exceeding 500.00 which must be in writing to be d. Yes a third person can annul a rescissible contract
enforceable
18. To defraud his creditors, A sold his real property to B. B now seeks to register the sale .X, creditor, seeks to
12. A was having his housed repaired by B, who needed certain materials. So A told the stole owner, give B the prevent the registration on the ground that it is rescissible contract. Despite Xs objection may the land be
materials registered
I shall be responsible. I shall stand good. This was orally entered into. in Bs name?
a. The contract is unenforceable because A made an oral agreement to answer the default of another that a. No because the contract rescissible and therefore without effect
is B b. No because the sale is voidable and after annulment is not binding
b. The contract is unenforceable because A did not make a special promise to answer for the fault of c. Yes because the contract although voidable is valid and binding
another person d. Yes because the contract although rescissible is valid, binding and enforceable before rescission
c. The contract shall be enforceable if there is ratification by A
d. The contract shall be enforceable if it has been executed 19. A made a donation to B. Later A contracted several debts. What A has left as assets is much less than this
present liabilities. May donation to be rescinded?
a. No because the debts were incurred after the donation has been made
b. No if A gave guaranty or security for his debts
 c. Yes because the donation is rescissible being fraud of creditors a. Annulled d. All of the above
d. Yes because A has become insolvent after donation b. Rescinded e. None of the above
c. Ratified
20. To defraud his creditor, A sold his property to B (who is in good faith). Later B sold the property to C, who
was in 28. When the contract lacks one of the essential elements the contract is:
bad faith .M ay the creditor rescind the sale? a. Void d. All of the above
a. Yes because the third person C, is in bad faith b. Voidable e. None of the above
b. No because the third person B is in good faith c. Rescissible
c. No because the contract is voidable and not rescissible
d. Yes because the contract is rescissible 29. The act or means by virtue of which efficacy is given to a contract, which suffers from a vice of curable
nullity
21. To defraud his creditor, A sold his house to C.When however the creditor wanted to collect his credit, a. Ratification d. All of the above
somebody b. Resolution e. None of the above
lent A enough money. Is the sale rescissible? c. Rescission
a. Yes because it was entered into fraud of creditors
b. No because the creditor can collect the credit due to him 30. Is a remedy in equity by means of which written instrument is made or constructed so as to express or
c. No because the debtor has become in good faith when he was lent money to pay his debts conform
d. Yes because the debtor was in bad faith when he sold his house to X. to the real intention of the parties when some error or mistake
a. Ratification d. All of the above
22. A orally sold to B a house at 16 Kiko St. Malate, Manila. In written deed of sale, both forgot the true number b. Reformation e. None of the above
of the house and instead wrote on contract No.18 Kiko St. Malate, Manila. The remedy shall be: c. Rescission
a. Annulment of as voidable contract because of mutual mistake
b. Reformation of the instrument because of lack of meeting minds 31. Although contracts bind only contracting parties, their assigns and heirs, in the following instances third
c. Reformation of instrument mutual error persons are
d. Declaration of nullity of the contract because of the uncertainty of the intention as to the object a. In case of stipulation pour auturi
b. In contracts creating real rights
23. A loan for 80,000.00 was orally contracted. May the lender to recover the sum lent? c. In contracts intended to defraud the creditors
a. No because the contract is unenforceable d. All of the above
b. No because the contract must be in writing to be valid e. None of the above
c. Yes if the debtor ratifies the loan
d. Yes because the contract is enforceable 32. A qualified acceptance constitutes
a. An absolute acceptance
24. When his father died but before the delivery of property to him, a son sold his share of the property b. A meeting of the minds between the parties
inherited. Is the c. Counter offer
sale valid? d. All of the above
a. No because future inheritance cannot be sold e. None of the above
b. Yes because future inheritance can be the object of the contract
c. Yes because what has been sold is present inheritance 33. An offer becomes ineffective if, before acceptance is conveyed, either parties becomes
d. No because the son was not the owner due to lack of delivery to him a. Civilly interdicted d. All of the above
b. Insane e. None of the above
25. Element without which there cannot be a contract is: c.Insolvent
a. Essential element d. All of the above
b. Natural element e. None of the above 34. A contract where consent is given through mistake, violence or intimidation is:
c. Accidental element a. Void d. All of the above
b. Unenforceable e. None of the above
c. Rescissible

35. The span of time wherein a person is in possession, temporarily of all his mental faculties
26. Contracts take effect only the parties, their assigns and heirs except where the right and obligations arising a. Lucid interval d. Reglementary period
there from: b. Option period e. None of the above
a. Is not transmissible by their nature c. Prescriptive period
b. Is not transmissible by stipulation of the parties
c. transmissible by provision of law 36. Contracts entered into a state of drunkenness or during hypnotic spell is:
d. All of the above a. Voidable d. Rescissible
e. None of the above b. Void e. None of the above
c. Unenforceable
27. Where damage is caused to either of the contracting parties or to a third person, the contract may be:
37. An offer made through an agent is accepted from the time acceptance is communicated to:
a. The principal d. The household member of the principal 47. On January 20 2002 A and B agreed verbally to form a partnership on January 25 2004
b. The agent e. None of the above a. The contract is void because future property cant be contributed to a universal partnership of all
c. Both the principal and the agent present property
b. It is voidable if the parties marry each other before they form the partnership
38. The essential or impelling reason why the parties enter into a contract c. Unenforceable because it is not in writing
a. Motive d. All of the above d. Void because there is no public instrument of their agreement
b. Cause e.None of the above
c. Profit 48. A orally leased B his car for a term of 2 years .B has not taken possession of the car and A has not received
any rental. The
39. The statement of a false cause in contracts shall render the contracts contract is:
a. Voidable d. Rescissible a. Unenforceable c. Rescsissible
b. Void e. None of the above b. Valid and binding d. Voidable
c. Unenforceable
49. Base on the preceding number, if the object were a house, the contact shall be;
40. If mistake fraud or accident has prevented a meeting of the minds of the parties, the proper remedy is: a. Unenforceable c. Rescissible
a. Annulment d. Resolution b. Valid and binding d. Voidable
b. Reformation e. None of the above
c. Rescission 50. If the object were a parcel of land. The contract is;
a. unenforceable c. Rescissible
41. The following contracts are valid b. Valid and binding d. Voidable
a. Rescissible d. Unenforceable
b. Annullable e. None of the above 51. A, being the eldest, sold the minor sisters parcel of the land in the name of the latter and by virtue
c. Unenforceable therefore the
later was able to finish high school. The contract is;
42. A contract entered into in the name of another by one who has no authority or legal representation is: a. Void c. Rescissible
a. Void d.Unenforceable b. Unenforceable D. Voidable
b. Rescissible e. None of the above
c. Annullable 52. Without authority from, B name the land of A to X who was in good faith. The contact is;
a. Void because B was not the owner at the time of the perfection of the sale.
43. Business advertisements of the things for sale are: b. Unenforceable, because B had no authority to sell As land.
a. Definite offer d. Acceptance of the offer c. Violable, because of the fraud committed by B against A.
b. Invitation to make an offer e. None of the above d. Valid sale provided B owner upon delivery
c. Counter offer
53. Based on the preceding no. if the sale in As name is the contract is:
44. The following is an example a real contract a. Void because B was not the owner at the time of the perfection of the sale.
a. Contract of pledge b. Unenforceable, because B had no authority to sell As land.
b. Contract of deposit c. Voidable, because of the fraud committed by B against A.
c. Contract of commodatum d. Valid sale provided B owner upon delivery
d. All of the above
e. None of the above 54. If the doubts are cast upon the principal object of the contract in such a way that it cannot be known
what may have been the intention or will of the parties. The contract shall be:
45. A. In case of divisible contract, if the legal terms can be separated from the legal ones, that the latter can a. Voidable due to lack of meeting minds
be enforced b. Void
B. The defense of illegality of contracts is available to third persons whose interest are directly affected c. Interpreted for there is doubt
d. Reformed to express the true intention of the parties
a. Both are true c. First is false
b. Both are false d. Second is false

46. A and B entered into an oral sale of the formers car for P1M which amount has been credited to his bank
account
although the car has not yet been delivered to the latter. Can B compel A to execute the deed of sale of the
car? BUSINESS LAW
a. No because the sale is unenforceable QUIZ ON CONTRACTS PART III
b. Yes because it is enforceable
c. Yes if A used the money paid to him
1. Which of the following can be considered as a feature of a void contract?
d. No because the sale is void
 a. Subjects to ratification 8. Which of the following is not valid?
b. It exists a. Mutual promise to marry entered into orally
c. Action or defense of nullity is subject to prescription b. Sale of immovable property orally entered into
d. Novation cannot apply c. One of the parties in contracts is incapable of giving consent
d. Mortgagor of an immovable cannot alienate it without the mortgagees consent
2. L entered into a contract of mortgage with X. T, the clerk of L, typed the document .Due to Ts
negligence, the 9. D forced C to execute a promissory note
document made was that of sale instead of mortgage. a. Contract is rescissible because the contract is fraudulent
a. The remedy is annulment b. The contract is void
b. Parties may go to court for interruption c. C cannot demand payment from D because the contract is unenforceable
c. Parties may enforce their right because it is enforceable d. Contract remains to be valid
d. Reformation of the instrument is proper
10.Example 1 S sold to B in a private instrument his land .Later B wanted to have the sale registered, but
3. These persons are bound by contracts, except registration requires a public instrument: In here, B compel S to execute the needed public instrument.
a. Third Persons b. Assigns c. Heirs d.Parties
Example 2 S sold to B orally his land. After B paid S the price he wants to register the land in his name but
4. Liable for the loss of the subject matter by fortuitous event: he needed a public instrument of sale. In here B may compel S to execute the needed public instrument.
a. Creditor c. Both creditor and debtor a. Both examples are false c. Only the second is true
b. Debtor d. None of them b. Only first is true is true d. Both examples are true

11. In contract of sale executed by S and B, it appears S sold his motor vehicle to B for 50,000.00.It turned
5. S offers to sell his house to B for 100,000. B asks him if he would accept 80,000. Which of the
out however, S has three motor vehicles .Galliant valued 80,000.00: Hi-Ace van valued 70,000; and a Jeep
following is correct? valued 60,000.Which of the following is correct?
a. Because of ambiguity, both offers are terminated by operation by law a. The contract shall be reformed because there was a mistake
b. Bs response is a counter offer effectively terminating the 100,000 offers and insignating an b. The parties can ask for interpretation because the word motor vehicle is ambiguous
offer for 80,000 c. The parties can ask for annulment of the contract
c. Bs response is a rejection of the 100,000 offer and there is no offer for 80,000 because it is d. There is no contract
too indefinite to
be an offer 12. An agreement is restraint of trade or establishing monopoly is:
a. Perfectly valid b. Voidable c. Unenforceable d. Void
d. Bs response is a mere inquiry; the 100,000 offer by S is still in force
13. Three of the following are rescissible, which is not?
6. Example no.1 G, guardian of W, sold Ws house valued at 50,000 for 37,500 or lesion by of a. Sale of property under litigation made by defendant without the consent of plaintiff or authority of the
the value court
Example no.2 S sold his house valued at 50,000 for only 10,000 because S did not know the true b. Those made to defraud creditors when the latter have no other means to recover their claims.
value of the c. Those agreed upon representation of absentees, if the absentee suffers lesion by more than of the
house value of the property subject of the contract
a. Both contracts are rescissible. d. Contract of sale and the price is unusually inadequate resulting to lesion
b. Only no.1 is rescissible
14. S and M agreed in print that S, debtor for 3,000, will work as a servant of M without pay until she could
c. Only no.2 voidable because there is an error or mistake find money with which pay to her debt. S failed to comply with her obligation .Under this premise, which
d. Both contracts are valid and enforceable of the statement is correct?
a. The agreement to work as a servant is void because it is immoral
7. B company bought out a competitor, C Corporation, with a stipulation that C Corporation should b. To act as a servant without pay is unconstitutional because this is equivalent to involuntary servitude
not c. The agreement to work without pay since written is enforceable
thereafter engage in any business in the Philippines unless consented to and approved by B d. The contract to work without pay as a servant until the debt is paid is void
Company
a. The stipulation is defective but subject to ratification 15. Which of the following contracts is not required to appear in a public document?
a. Acts and contracts which have for their object the creation, transmission modification or
b. The stipulation is defective the parties are free to enter into any stipulation, terms and extinguishment of real right over immovable property
conditions such b. The session, repudiation or renunciation of hereditary rights
as this one c. The power to administer property
c. The stipulation is unenforceable as there was no showing that the sale was done in writing d. Sale of immovable property
d. The stipulation is void because it is contrary to public policy
16. In order that stipulation in favor of a third person would be valid and binding upon the parties thereto X, an employee of the company was discharged without just cause, one week before the completion of
to the following are requisites except the
a. There must be a stipulation in favor a third person two-period
b. The contracting parties must have clearly and deliberately conferred a favor upon that third person a. X is not entitled to the bonus because his discharge was in accordance with the contract
c. The third person communicated hi acceptance to the obligor before its revocation b. X is not entitled to the bonus because the employers right to terminate is superior than the right of
d. That there must be an existing agency between either of the contracting parties and the third person the employee to be employed
c. X is not entitled to the bonus whether the discharge is with or without cause
17. Statement no.1 Dolo indecent entitles the person against whom it was employed the right to seek the d. X is not entitled to the bonus because the debtor company has voluntarily prevented happening of the
annulment condition
of the contract
Statement no.2 A stipulations pour autri is an exception to the rule on relativity of contracts. 25. Statement no.1 If one party was mistaken and the other hand acted fraudulently or inequitably in such a
a. Both are true c. No.1 is true; no.2 is false way the instrument does not state their true intention, the former may ask for the annulment of the
b. Both are false d. No.1 is false; no.2 is true instrument
Statement no.2 The statement of false cause in contracts shall render them void, if it should not be proven
18. Example no.1 W, 16 years old sold his house valued at P1M for 500,000 or lesion by more than one-fourth that they were founded upon another case cause which is true and lawful
of the value of the said house a. Both are true b. Both are false c. No.1 is true; No.2 is false d.No.1 is false; No.2 is true
Example no.2 S sold his house valued at P1M for only 5000,000 because of his poor judgment on the value
thereof 26. Must be in writing to be enforceable
a. Both are voidable c. No.2 is unenforceable a. Lease of land for 12 months c. Both a and b
b. No.1 is rescissible; while No.2 is voidable d. Both contracts are binding b. Lease of car for 18 months d. None of a and b

19. S owns an oil painting. Being in need of money, S sold the painting to B for 1,000.After the sale it was 27. Which of the following is not a requisite for the validity of a contract?
discovered that the painting was valuable and worth 5,000. a. Consent b.Object c. Cause d. Delivery
a. S may rescind the contract due to lesion or inadequacy of cause
b. S may annul the contract because of fraud 28. D owes C 500. However, Cs right has already prescribed .Notwithstanding the knowledge of this fact, D
c. S may annul the contract on the ground of error paid
d. B is entitled to the benefit of the contract because it is valid and binding the amount .Realizing this mistake D wants to recover the amount paid.
a. D ca recovers on the ground of mistake
20. A bachelor lawyer, raped W. Upon learning this F the father of W, was able to force A to marry W b. D can recover because his obligation is not enforceable
under pain of being sued and disbarred from the practice of his law profession. Which statement is c. D can recover otherwise C will be enriched at the expense of D
correct? d. D cannot recover
a. The marriage may be annulled on the ground of force or violence
b. The marriage may be annulled on the ground of threat and intimidation
c. The defective marriage may, however, be ratified 29. Three of the following contracts are void .Which is the exception?
d. There was no defect, the marriage was perfectly valid a. Those who cause, object or purpose is contrary to law, morals, good custom, public order of public policy
b. Those which are absolutely simulated or fictitious
21. In an invitation to bid B proposes the following: c. Those who cause or object did not exist at the time of the transaction
I will buy the property for 100,000 and if the bid of any other offeror or bidder shall be considered the best d. Those where both parties are incapable of giving consent to a contract
in terms of amount and conditions, I am equal to that offer
a. The offer is speculative, because it cannot be considered against another offer which is certain 30. X a former government employee, suffered severe paranoia and was confined in the mental hospital in
b. The offer is considered a counter offer 2000.
c. This is a continuing offer which is very certain After his release he was placed under the guardianship of his wife to enable him to get his retirement pay
d.The advertiser is not bound to accept the highest bidder .In 2004
he became a mining prospector and sold some mining claims. In 2006 he wants to annul the sale claiming
22. Statement no. 1 If the cause is not stated in the contract it is presumed that it is unlawful that he was
Statement no.2 The action for rescission is subsidiary it cannot be instituted except when there is no other not mentally capacitated at the time of sale. The sale question was
legal means to obtain reparation for damages suffered a. Rescissible b. Void c. Voidable d. Valid
a. Both statements are true c. Only first is false
b. Both are false d. Only the first is true 31. Which of the following is nit presumed to be legal subrogation?
a. When a creditor, pays another creditor who is preferred
23. G was appointed guardian of S, the latter of being 16 years old. S sold his parcel of land in writing to B b. When a third person, not interested in obligation pays with the approval of the debtor
valued at 100,000 for 75,000, suffering lesion by of the value. What is the status of the contract? C.When the third person interested in the obligation pays even without the approval of the debtor
a. Rescissible b.Unenforceable c. Void d. Voidable d. None of them

24. One of the stipulations contained in the contract between M company and its employees is that the 32. Essential requisites of a contract:
company shall pay a bonus to employees of the company who shall continue its employment for at least a. Consent b.Cause c.Object d.All of them
2 consecutive years, unless he quits or is discharged before the expiration of the period of 2years.
33. Which of the following instruments is not subject to reformation? c. The Statute of Fraud is incapable here, because the promise to give the land is not a sale of real
a. Simple donations inter vivos wherein no condition imposed property
b. Wills d. The Statute of Fraud is can apply to partially executed contract
c. When the agreement is void
d. All of the above 42. Statement no.1 In voidable contracts, there is no need to ratify the same before they can be considered
valid. In
34. Valid, binding and enforceable until annulled unenforceable contracts however ratification is mandatory before they can be considered enforceable
a. Rescissible contract b. Void and ab initio contract c. Voidable contract d. Validable Statement no.2 There is undue influence if insidious words or machinations were employed by party on the
contract
other just to obtain the latters consent without which the latter would not have entered into the contract
35. In three of the following defective contracts, ratification cleanses the defects .Which is the exception? a. Both are true c. No.1 is true while No.2 is false
a. Both parties are incapable of giving consent b. Both are false d. No.1 is false while No.2 is true
b. Sale of immovable property or interest therein orally entered into
c. Sale of piece of land thru an agent and the authority is oral 43. Three of the following are void contracts. Which is the exception?
d. Contracts entered into by a person who has been given no authority a. Contracts where the cause is immoral
b. Contracts to prevent a known supporter of a political rival from voting for his candidate for a valuable
36.S makes an offer to B on January 1 2007 .B makes known his acceptance in a letter sent on January 2 and consideration
received c. Contracts with valid consideration but with unlawful motives
by S on January 5.Meantime , on January 3, S became insane d. Absolutely simulated contracts
a. The contract is voidable because one party is insane
b. There is already a meeting minds, the contract is perfected 44. Statute of Frauds is applicable to
c. The contract is not binding because there is no meeting of minds a. executed contract
d. The contract is void the offer being effective b. oral contract of loan
c. contract not to be performed within a year from the making thereof
37. Based on the same facts except S is sane but only a minor at the time the acceptance is communicated to d. mutual promise to marry
him?
a. There is no meeting of minds between parties, therefore void. 45. Which of the following is correct?
b. The contract is not binding because the party is anticipated a. An action to enforce judicially a natural obligation prescribes in 4 years
c. The contract is binding between parties b. An action for annulment of contract is imprescriptible
d. The contract is unenforceable c. An action to declare a contract void is not subject to prescription
d. An action for rescission of contract prescribes in five (5) years counted from the execution of the
38. Which of the following contract is voidable? contract
a. Those whose object is outside the commerce of men
b. Those which are absolute fictitious 46. B fraudulently includes S to sell to him (B) a masterpiece painting for 100,000.Subsequently , B sold it to X
c. Those where one of the parties is incapacitated for 120,000 a good faith purchaser S is entitled to
d. Those which contemplate an impossible service a. Annul the contract with B plus damages
b. Recover the painting from X but no damages
39. The stipulation of contract to the effect that the debtor should remain as a servant in the house and in the c. Recover damages from B
service of her d. Annul the contract between B and X
creditor so long as she had not paid her debt is void because it is:
a. Contrary to good custom c. Contrary to law and morality
b. Contrary to public policy d. Contrary to public order 47. Which of the following contracts is not rescissible?
a. Those which are entered into by guardians whenever the wards, whom they represent, suffer a lesion of
40. After the death of his father, sold his inheritance through its amount has not yet been determined to B, for more
an than of the value of object of the contract
consideration of 50,000 b. Those executed in representation of an absentee, if the latter suffer a lesion more than of the value of
a, The contract is valid only if the inheritance valued at least equal or more than 50,000 the contract
b. The contract is rescissible c.Those where one of the parties is incapable of giving consent to a contract
c. The contract is void if nothing remains of the inheritance to be turned over to B d. Those undertaken in fraud of creditors when the latter cannot in any other manner collect the claims due
d. Contract is void future inheritance cannot be the object of sale them

41. X alleged that Y promised to give him one hectare of land. This is in consideration of Xs meritorious 48. When there is concurrence of offer and acceptance, there is:
services a. Consummation b. Conception c. Consent d. Consideration
Y .Y pleads in defense that since the promise was not in writing , it is unenforceable under the Statute of
Frauds. Decide 49. Which of the following contracts is voidable?
a. The promise is unenforceable because it is not in writing a. Those were both parties are incapable of giving consent to a contract
b. The Statute of Fraud is applied because of A has rendered services b. Those undertaken in fraud of creditors when the latter cannot in any other manner
c. Those were the consent is vitiated by mistake, violence, intimidation, undue influence or fraud
 d. Those whose object is outside the commerce of men d. Those which are absolutely simulated or fictitious

50. Which of the following contracts is not rescissible?

a. Those where one of the parties is incapable of giving consent to a contract
b. Those where both parties is incapable of giving consent to a contract
c. Those which are entered into by guardians whenever the wards, whom they represent, suffer a lesion of
more
than of the value of object of the contract