2ND TAKE HOME QUIZ

February 18, 2023

I. MULTIPLE CHOICE: Explain you answer:

Example:

1. The period when the minds of the seller and the buyer have met on the
subject matter and the cause of the contract of sale is:

a. Negotiation of the sale

b. Consensus of the sale
c. Consummation of the sale
d. Perfection of the sale

My answer is A because it is during the said period when the

preparation, conception, or generation, and bargaining
happened and ending at the moment of agreement of the parties;

2. One of the following is not a remedy granted to an unpaid seller

a. Right of stoppage of goods in transit
b. Right of lien over the goods
c. Right of resale
d. Right to demand security for the payment of the price

3. Gladys transferred to Joy ownership of a watch the value of which is

P100,000; Joy will give Gladys P30,000 in cash and her car worth P70,000.
What kind of contract is this?
a. Lease contract
b. Contract of sale
c. Obligation to sell
d. Barter

4. A contract of sale is not necessarily:

a. a principal contract
b. commutative
c. bilateral
d. an onerous contract

5. A sale is distinguished from dation in payment, that in sale:

a. there is a pre-existing obligation or credit
b. the cause as to the seller is the promise to pay the price
c. it is a mode of extinguishing an obligation in the form of payment
d. delivery is required for its validity

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6. A contract of sale is not:
a. bilateral
b. gratuitous
c. consensual
d. nominate

7. A characteristic of contract of sale which involves exchange of value:

a. commutative
b. nominate
c. bilateral
d. consensual

8. Which of the following may not be the object of a valid contract of sale?
a. things having a potential existence
b. a vain hope or expectancy
c. future goods
d. a road

9. The guardian purchased the property of his ward. The contract is:
a. valid
b. rescissible
c. void
d. unenforceable

10. The following are requisites for a valid exercise of the right of stoppage in
transit, except:
a. the seller is unpaid
b. the goods are in transit
c. the seller has not parted with the possession of the goods
d. the buyer is insolvent

11. In a contract of sale, a warranty against eviction is:

a. an essential element
b. a natural element
c. an accidental element
d. a formal requirement

12. The following are the alternative remedies, except one available to the buyer in
case of breach of warranty by the seller:
a. keep the goods and ask for damages
b. refuse to accept the goods and ask for damages
c. rescind the sale and retain the goods
d. keep the goods and set up against the seller by way of recoupment in
price.

13. Which of the following statements is true and correct?

a. In a contract of sale the full payment of the price is in the nature of
suspensive condition in that the seller is obligated to transfer ownership
of the thing sold;

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 b. the seller need not be the owner of the thing sold at the perfection of the
sale;
c. there may be a transfer of ownership over the thing even if the seller
has not delivered the thing sold to the buyer;
d. in a contract of sale the buyer becomes the owner of the thing sold
upon full payment of the purchase price.

14. The following are ways of effecting constructive delivery, except:

a. by the execution of a public instrument
b. traditio symbolica
c. real delivery
d. quasi-traditio

15. In contract of sale of personal property the price of which is payable in

instalments, the vendor may exercise the any of the following remedies,
except:
a. exact fulfilment of the obligation, should the vendee failed to pay;
b. cancel the sale, should the vendee’s failure to pay cover two or more
instalments;
c. the vendor may still pursue further action against the vendee to recover
any unpaid balance in case of foreclosure of chattel mortgage;
d. foreclose the chattel mortgage on the thing sold, if one has been
constituted should the vendee’s failure to pay cover two or more
instalments.

16. When goods are delivered to the buyer “on sale or return”, for a period of
seven (7) days, ownership of the goods passes to the buyer,
a. upon delivery of the goods
b. upon expiration of seven (7) days
c. upon acceptance by the buyer of the offer of the seller
d. upon perfection of the contract

17. Marta offered to sell her 2014 model car to Josie for price certain but the
latter told her that she will decide to buy within three days. At around
9:00am of the third day, Marta sent a letter to Josie withdrawing her offer
while Josie, on the same day around 3:00pm, informed Marta through a
messenger that she was accepting the offer. Marta received Josie’s
acceptance in the morning of the fourth day while Josie received Marta’s
withdrawal in the afternoon of the same day. Is there a perfected contract of
sale?
a. there is because the offer was accepted
b. there is none since there is no consideration given for the exercise of the
option whether to buy the car or not
c. there is none since when the offer was accepted it was no longer
existing
d. there is since the offeror received first the acceptance than the offeree
who received the withdrawal of the offer later in the day

18. Bruno delivered to Barbero for safekeeping 100 boxes of branded shirts, In
the due course of his business, Barbero charged Bruno a certain fee and
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 issued a receipt for the goods setting forth the terms and conditions of their
contract. The receipt obligated Barbero to deliver the goods to the bearer of
the receipt. Mars stole the receipt from Bruno and sold and delivered it to
Mika for fair market value. Mika was not aware of the theft. Mika specifically
indorsed and delivered the receipt to Emo, who in turn delivered it to Fe. Fe
presented the receipt to Barbero to claim the goods. Can Barbero refuse to
deliver?
a. No, because Fe holds a bearer receipt
b. No, because Fe and Emo were buyers in good faith and for value
c. Yes, because Fe had no title to the goods
d. Yes, because Emo did not indorse the receipt

19. The diamond ring of A was stolen by B who sold the same to C, a merchant
store owner. D bought the ring from the store of C. Can A recover the ring
from D?
a. No, because D purchased the ring in good faith from a merchant store
b. Yes, because A was unlawfully deprived of the ring, without
reimbursing D for the price paid by D to C
c. Yes, but A has to reimburse D the price he paid to C
d. No, because D is an innocent purchaser for value

20. The contract of sale between A, a minor, who purchased a car from B, of legal
age, is:
a. voidable and may be annulled by A
b. void
c. unenforceable
d. voidable and may be annulled by B or A

21. Mr. Seller offered a parcel of land to Mr. Buyer No. 1 under a contract to sell.
Subsequently, Mr. Seller sold the same land to Mr. Buyer No. 2 who paid the
price. After a couple of days, Mr. Buyer No. 1 paid the price. Which is
correrct?
a. the one with a better right is Buyer No. 2
b. Mr. Seller has done a double sale
c. The one with the better right is the buyer who registers the sale first in
good faith
d. there is no double sale

22. Andrea wrote Beranrdo a letter offering to sell a piece of land. Andrea gave
Bernardo two months within which to pay the price of P500,000. After 50
days Andrea informed Bernardo that she is increasing the price of the land to
P700,000. Can Bernardo compel Andrea to accept the P500,000, first offered
and execute the deed of sale?
a. No, because Bernardo did not signify his acceptance of the offer of
P500,000
b. Yes, because the period of 2 months has not yet expired
c. Yes, because Andrea is already stopped by her signed letter
d. Yes, because there was actual meeting of minds of the parties

23. The goods are no longer in transit in the following cases, except:
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 a. after delivery to the buyer or his agent in that behalf
b. if the buyer or his agent obtains possession of the goods at a point
before the destination originally fixed
c. if the carrier or bailee acknowledges to hold the goods on behalf of the
buyer
d. none of the above

24. The following are the essential elements of the warranty against eviction,
except:
a. the judgment is based on a right prior to the sale or an act imputable to
the vendor
b. the vendee is not deprived in whole or in part of the thing purchased
c. the vendee is so deprived by virtue of a final judgment
d. there was no waiver on the part of the vendee

25. Charlie sold his parcel of land in Manila to Bernice for a consideration of P1M.
A deed of absolute sale was executed in Bernice’s favour immediately after the
purchase price was paid. However, Bernice did not immediately take
possession of the land, as she was still in the province. Seeing that the house
and lot seem unoccupied, several persons squatted on it and began to
establish their residence on said lot. After being aware of the situation,
Bernice instituted an action for rescission of the contract of sale between her
and Charlie alleging that Charlie was liable for violation of the warranty
against eviction. Was there a violation of warranty against eviction?
a. No. Charlie and Bernice did not explicitly agree upon the warranty of
eviction in their contract.
b. Yes. Even though Charlie and Bernice did not explicitly agree upon a
warranty of eviction, said warranty is implied in all contract of sale as
stated in Art. 1547 of the Civil Code.
c. No. Warranty against eviction is not applicable in this case for mere
trespass in fact does not give rise to the application of the doctrine of
eviction.
d. Yes. Bernice was deprived of the lot she has purchased; therefore
Charlie should be liable under the doctrine of warranty against eviction.

26. Juan sold his car to Berto. Several negotiations took place between the
parties, however, no final price for Juan’s car has been agreed upon. After a
month of negotiations, Juan delivered the car to Berto upon the
understanding that Berto is already committed to the purchase of the car.
Berto demanded for the execution of a deed of absolute sale in his favour,
asserting that the contract of sale between him and Juan is already perfected
as evidenced by delivery of the car. Is there a valid and perfected contract of
sale between Juan and Berto?
a. No. The delivery and taking possession of the subject matter by the
buyer with the knowledge or consent of the seller, would not bring
about the perfection of the sale, when the meeting of the minds is
incomplete, there being no final agreement as to the price.
b. No. The element of consent is absent for the parties are still in the
negotiation phase of the contract, there being no agreement as to the
final price of the car.
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 c. Yes. Juan’s delivery of the car means that he has agreed to sell it. The
agreement as to the price can be agreed upon after the delivery, as this
does not affect the contractual relationship between the parties.
d. Yes. Perfection of the contract of sale is evidenced by delivery of the
thing, which is the object of the contract.

27. Statement 1: Any stipulation exempting the vendor from the obligation to
answer for eviction shall be void, if he acted in bad faith.
Statement 2: If the property is sold for non-payment of taxes due and not
made known to the vendee before the sale, the vendor is liable for eviction.
a. Statement 1 is true; Statement 2 is false
b. Statement 1 is false; Statement 2 is true
c. Statement 1 is true; Statement 2 is true
d. Statement 1 is false; Statement 2 is false
28. The following are the requisites for warranty against hidden defects, except
for:
a. the defect may not be important for serious;
b. it must be hidden;
c. it must exist at the time of the sale;
d. the vendee must give notice of the defect to the vendor within a
reasonable time.

29. On June 5, 2015, JD was supposed to deliver to RS a specified red car. There
was no delivery however, on said date. On June 15, 2015, the garage of the
car was totally destroyed. Is JD liable?
a. No. JD could plead impossibility of the performance due to a fortuitous
event even if he is in default.
b. Yes. JD is in legal delay.
c. No. There was no demand and the car was lost through a fortuitous
event.
d. Yes. There is a perfected contract of sale.

30. Gross inadequacy of price in the contract of sale may indicate a defect in the:
a. Contract
b. Consent
c. Consideration
d. Price

31. A promise to buy and sell a determinate thing for a price certain is:
a. Unilaterally demandable
b. Reciprocally demandable
c. Legally demandable
d. All of the above

32. Consent is manifested by the meeting of the offer and the acceptance upon
the thing and the cause which are to constitute a contract of sale. Which of
the following constitute an offer?
a. a definite offer made through an agent
b. business advertisement of things for sale
c. advertisements for bidders
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 d. a declaration of an intent to sell

33. Mr. Oliveros, by virtue of a written agreement agreed to deliver to Mr. Santos
a car on specified date provided the latter pays the former P1M.
a. the prestation is the car; Mr. Santos is the active subject; Mr. Oliveros
is the passive subject; and the juridical tie is the contract.
b. the active subject is Mr. Oliveros; the passive subject is Mr. Santos; the
juridical tie is the law and the prestation is the giving of the car.
c. the active subject is Mr. Santos; the passive subject is Mr. Oliveros; the
prestation is the delivery of the car and the juridical tie is the law.
d. the passive subject is Mr. Oliveros; the active subject is Mr. Santos; the
prestation is the delivery of the car and the juridical tie is the contract.

34. The action for rescission of the contract or reduction of the purchase price
due to violation of warranty against hidden defects prescribes in:
a. One year from the date of delivery of the thing sold
b. Two years from the date of delivery of the thing sold
c. Six months from the date of delivery of the thing sold
d. Three months from the date of delivery of thing sold

35. Statement 1: The vendee is not bound to accept delivery and to pay the price
of the thing at the time and place stipulated in the contract.
Statement 2: If the time and place should have been stipulated, the
payment must be made at the time and place of the delivery of the thing sold.
a. Statement 1: True; Statement 2: False
b. Statement 1: False; Statement 2: False
c. Statement 1: False; Statement 2: True
d. Statement 1: True; Statement 2: True

36. In the following cases, the vendee cannot suspend the payment of the price
even if there is disturbance in his possession of ownership of the thing sold:
a. if the vendor gives security for the return of the price in a proper case;
b. if it has been stipulated that notwithstanding any such contingency the
vendee must make payment;
c. if the disturbance is a mere act of trespass;
d. all of the above

37. The remedies allowed to the buyer when the seller has been guilty of a breach
of promise or warranty are:
a. accept the goods and set up the seller’s breach to reduce or extinguish
the price;
b. accept the goods and maintain an action for damages for the breach of
the warranty;
c. refuse to accept the goods and maintain an action for damages for the
breach of the warranty;
d. all of the above

38. The following are the obligations of a vendor, except:

a. to transfer the ownership of the determinate thing sold;
b. to deliver the thing;
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 c. to warrant against eviction and hidden defects;
d. all of the above

39. Statement 1: The thing sold shall be understood as delivered, when it is place
in the control and possession of the vendor.
Statement 2: With regards to movable property, its delivery may also be made
by the delivery of the keys of the place or depository where it is stored or kept.
a. Statement 1: True; Statement 2: True
b. Statement 1: False; Statement 2: False
c. Statement 1: False; Statement 2: True
d. Statement 1: True; Statement 2: False

40. The following are the rights of a person to whom a negotiable document of
title has been transferred, except:
a. the title to the goods as against the transferor;
b. the right to notify the bailee of the transfer thereof;
c. the right, thereafter, to acquire the obligation of the bailee to hold the
goods for him;
d. none of the above

II. DEFINE and GIVE EXAMPLES: Minimum of 100 words each example.

1. Divisible Contract
Any contract that "divides the complete performance into two sets of
partial performances, with part of each set being the agreed exchange
for a corresponding part of the set of performances to be performed by
the other promisor" is referred to as "divisible."
Example: A promised to give B P3,500.00 in four equal monthly
payments. A's obligation can be performed in parts, so it can be divided.
Therefore, even if money can be physically divided, if the parties
intended for the obligation to be met all at once and in full, then it is
indivisible if they agreed that A would pay B the full amount of
P3,500.00 on a specific date (not partially). So, it is important to
distinguish between the division of an obligation and the division of the
thing that serves as its aim.
2. Contract of Sale
A legally binding documents detailing the terms and conditions
established between a seller and a buyer with regard to products is a
property sale contract.
Example: A decided to buy the house and lot that B sells with a cost of
3,000,000. They made a contract that states that B agreed to transfer
the ownership of the house and lot to A with the information of how
much is the price of the asset as well as the location. This is a valid
contract of sale. A contract of sale lays out the terms of a transaction of
goods or services, identifying the goods sold, listing delivery
instructions, inspection period, any warranties and details of payment.
3. Tradition
4. Right of Stoppage in Transitu
5. Warranty of Merchantability
6. Recoupment
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 7. Barter
8. Traditio brevi manu
9. Redhibitory Defect
10. Quasi-Traditio

Kindly see below Case Study.

FACTS:

Lynville Homes, owner of a parcel of land at Sta. Cruz entered into a Contract of
Lease with the Mr. Jungkook. The lease was for a period of three (3)
years. Their contract prohibited the lessee to cede, transfer, mortgage,
sublease or in any manner encumber the whole or part of the leased
land and its improvements or its rights as LESSEE of the leased land,
without the previous consent in writing of the LESSOR contained in a
public instrument. However, after the execution of the lease agreement,
Mr. Jungkook started leasing portions of the leased area to Mr. Jimin
and his family who erected their respective houses thereon. When the
lease contract was about to expire, Lynville Homes sent a written offer
to sell subject properties to Mr. Jongkook. Responding to such written
offer, Mr. Jungkook wrote a letter manifesting an intention to exercise
his right of first priority to purchase the property as stipulated in the
lease contract. A Memorandum on the offer of Mr. Jungkook to
purchase the property was approved with a down payment; the balance
of the purchase price payable within ten (10) years with interest at the
rate of eighteen (18%) percent per annum. However, Lynville Homes
also received a copy of a letter sent by the Jimin and his family
expressing their desire to purchase the portions of subject property on
which they have been staying for a long time.

ISSUE:

1. What is right of first refusal?

-Right of first refusal (ROFR), also known as first right of refusal, is a
contractual right to enter into a business transaction with a person or
company before anyone else can. If the party with this right declines to
enter into a transaction, the obligor is free to entertain other offers. This is
a popular clause among lessees of real estate because it gives them
preference to the properties in which they occupy. However, it may limit
what the owner could receive from interested parties competing for the
property.

2. Who among the parties Mr. Jungkook or Jimin and his family has the right to
exercise the right of first refusal?
-In this case, the one that has the right to exercise the right of first refusal
is Mr.Juvgkook since he is the first to offer the sale of the subject property
of lynville homes. If Mr. jungkook refuse the offer then the luynville homes
could offer it to Mr.jimin since he is also interested in the property that
lynville is selling.
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3. Was there a consent with the lease of Jimin and his family and Lynville
Homes?
-No, there is no consent with the lease of jimin and his family and lynville homes,
since it is Mr.Jungkook who started leasing portions of the leased area
to Jimin. Aside from that, there is a contract that states that their
contract has no prohibited the lessee to cede, transfer, mortgage,
sublease or in any manner encumber the whole or part of the leased
land and its improvements, meaning Mr.Jungkook violated the contract
and he is the only one that has the consent with the lease of Jimin and
his family, and lynville homes has no idea about it.
FACTS:
JayR was the owner of 8,015 square meters of parcel of land located in
Mandaluyong City, Metro Manila. To secure a P900,000.00 loan it had
obtained from Philippine National Bank, JayR executed a real estate
mortgage over the lot. PNB later granted petitioner a new credit
accommodation. On August 5, 2022, PNB filed a petition for
extrajudicial foreclosure of the real estate mortgage and sought to have
the property sold at public auction. After due notice and publication,
the property was sold at public action where PNB was declared the
winning bidder. Petitioner sent a letter to PNB, requesting it to be
granted an extension of time to redeem/repurchase the property. Some
PNB personnel informed that as a matter of policy, the bank does not
accept “partial redemption”. Since petitioner failed to redeem the
property, the Register of Deeds cancelled TCT No. 32098 and issued a
new title in favor of PNB.
Meanwhile, the Special Asset Management Department (SAMD) had prepared a
statement of account of petitioner’s obligation. It also recommended the
management of PNB to allow petitioner to repurchase the property for
P1,574,560.oo. PNB rejected the offer and recommendation of SAMD. It
instead suggested to JayR to purchase the property for P2,660,000.00,
in its minimum market value. JayR declared that it had already agreed
to SAMD’s offer to purchase for P1,574,560.47 and deposited a
P725,000.00.

ISSUE:

Was there perfected contract to repurchase the property?

-In my opinion there is no perfected contract to repurchase the property between
JayR and PNB since both parties did not agree on the process
and the price of the property, aside from that any
misunderstanding and objection of both parties must be settle
first. Even if SAMD and JayR agreed upon the price of
P1574,560.00, it is JayR and PNB that is involved in this
transaction. A contract is a two-person agreement whereby one of
the parties commits himself to provide a good or service for the
other with respect to each other.

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