1st Final Departmental Examinations Reviewer

A.Y. 2022-2023

Subject Code: LAW 101

Course Subject: Law on Obligations and Contracts

1. The following are requisites of cause in a contract, except: a) It must be lawful.

b) It must not be false.
c) It must be clearly stated in the contract.
d) It must exist.

2. Mark offers to landscape Glen's house for P250,000. He gives Glen 10 days within which to make up his mind. On the
10th day, Mark decided to withdraw his offer. Glen also made up his mind on the same day and decided to accept
the offer. Glen communicated it the next day. Is the offer still effective?
a) Yes, the option period elapsed, and whether there is a consideration or none, it is now ineffective.
b) No, since there is no consideration and Q decided to withdraw the offer within the option period.
c) Yes, even there is no consideration R decided to accept the offer within the option period.
d) No, the option period elapsed, and whether there is a consideration or none, it is still effective.

3. Lyn, being the only child of spouses Min and Max, knew for a fact that she will inherit all the properties of her parents
upon their death. During the lifetime of her parents, she is already offering for sale on a particular property
which forms part of her inheritance. Can Lyn validly do this?
a) No. Future inheritance cannot be the subject of a contract.
b) No. The contract is speculative.
c) Yes. As she is the only child of her parents, and it will be under her name soon. d) Yes. S has an inchoate right over the
property.

4. X owes Y the sum of P10,000 under an oral contract perfected in 2008. In 2022, they crossed each other's way in a
reunion. X decided to pay his
debt. Can X recover what he has paid now that he's having financial difficulty because of the pandemic?
a) No. The payment of debt is considered a natural obligation.
b) No. The recovery of the debt payment, which is already two yearz, has already elapsed
c) Yes. Since the debt is prescribed, X can recover the amount he paid. d) Yes. It is only an oral contract, so he can
recover the amount he paid.

5. A source of an obligation that arises when a wrong is committed without any preexisting relations.
a) Quasi-contract
b) Quasi-delict
c) Natural Obligation
d) Crime

6. The following are allowed to be legally compensated, except for: a) Obligation arising from civil penalty in
obligation with a penal clause b) Obligation arising from contract of commodatum
c) Obligation arising from contract of savings deposit with a bank d) Obligation arising from contract of
mutuum

7. Which of the following contracts is perfected by the delivery of the subject matter of the contract?
a) Contract of sale
b) Contract of subscription of shares
c) Contract of pledge
d) Contract of agency

8. Which of the following is perfected by mere consent?

a) Contract of sale
b) Contract of partnership involving real property
c) Agreement to pay interest
d) Contract of commodatum

9. Reformation of instruments has the following requisites, except: a) there must be a meeting of minds of the parties to the
contract. b) the true intention of the parties is not expressed in the instrument. c) the failure of the instrument to express the
true intention of the parties is due to mistake, fraud, inequitable conduct or accident.
d) the contract must be in a public instrument.

10. When the “thing” deteriorates with the debtor's fault, the creditor may choose one of the following:
a) Mutual restitution
b) Suffer the deterioration of the thing
c) Rescission (cancellation) of the obligation with indemnity for damages d) All of the above

11. Which of the following are Requisites of services as object of contract? I. The service must be within the
commerce of men
II. It must not be impossible, physically, or legally
III. It must be in existence or capable of coming into existence IV. It must be determinate or capable of
being made determinate.
a) I, II, III, & IV
b) I, II, & III only
c) I, II, & IV only
d) I, III, & IV only
12. What do we call the contracts resolved against the party who prepared it and in favor of the one who merely
adhered to it?
a) Defective Contracts
b) Onerous Contracts
c) Gratuitous Contracts
d) Adhesion Contracts

13. A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to
_______ something or to render some _______.
a) do; service
b) deliver; goods
c) give; service
d) give; goods

14. It is purely personal or private reason which a party has in entering into a contract.
a) Consent
b) Object
c) Cause
d) Motive

15. When the mutual mistake of the parties causes the failure of the instrument to disclose their real agreement, said
instrument may be _______.
a) Reissued
b) Reformed
c) Removed
d) Exchanged

16. What should be considered in order to judge the intention of the contracting parties?
a) Prior and Subsequent Acts
b) Contemporaneous and Subsequent Acts
c) Contemporaneous and Synchronous Acts
d) Synchronous and Prior Acts

17. What is the correct sequence of the stages in making a contract? a) Perfection – Consummation – Birth
b) Conception – Birth – Termination
c) Preparation – Consummation – Perfection
d) Consummation – Perfection – Conception

18. There is a mistake if the party alleging it knew the doubt or risk affecting the object of the contract.
a) Completely True
b) Completely False
c) Partly True and Partly False
d) Either A or C

19. Business advertisements of goods for sale are:

a) invitations
b) offer
c) contract
d) obligation
20. Which of the factors can be perfected by delivery of the thing subject matter of the contract?
a) lease
b) sale
c) agency
d) commodatum

21. An acceptance may only be expressed.

a) True
b) False
c) Maybe
d) None of the choices

22. A contract which is perfected by the delivery of the thing subject matter of the contract.
a) Consensual Contract
b) Real Contract
c) Formal Contract
d) Solemn Contract

23. It is a real and gratuitous contract wherein one of the parties delivers to another, either something not consumable
so that the latter may use the same for a certain time and return it.
a) Contract of commodatum
b) Contract of lease
c) Contract of loan
d) Contract of deposit

24. A contract according to importance or dependence of one upon another are the following, except:
a) Principal Contracts
b) Preparatory Contracts
c) Accessory Contracts
d) None of the above
25. What are the reasons for not applying the general rule for obligatory force of contracts in whatever form?
a) for validity, enforceability, and convenience
b) for validity, liquidity, and convenience
c) for validity, enforceability, and effectivity
d) for validity, accessibility, and effectivity

26. Contracts validly agreed upon may be rescinded in the cases established by law is stated under:
a) Article 1379
b) Article 1380
c) Article 1381
d) Article 1382

27. A mistake of fact that is common to both parties of the instrument which causes the failure of the instrument to
express its true intention. a) Unilateral mistake
b) Mistake or error
c) Mutual Mistake
d) Ordinary Mistake

28. It is a form of novation whereby a third person voluntarily assumes the obligation of the debtor with the consent
of the creditor, but without the knowledge and consent of the debtor.
a) Expromission
b) Real Novation
c) Simulation
d) Delegacion

29. Civil obligations arising from criminal offenses shall be governed by the: a) Civil laws only
b) Penal laws and other laws
c) Philippine Constitution
d) Moral law

30. Three of the following instances will render an offer ineffective before acceptance is conveyed. Which one will
not?
a) Civil interdiction of either party.
b) Insolvency of either party.
c) Insanity of either party.
d) Intoxication of either party.

31. Mary, drunk from drinking too much beer at the birthday party just one and a half hour earlier, encountered Jenny at the door of
her house with an offer to
sell her California house for only 40 million pesos. Jenny had a deed of sale for the house at hand and Mary signs the contract.
The contract is:
a) Unenforceable
b) Voidable
c) Rescissible
d) Void

32. The following are kinds of defective contracts, except:

a) Resistible contracts
b) Inexistent contracts
c) Voidable contracts
d) Unenforceable contracts

33. Who among the following is capacitated to give consent to a contract? a) Broken-hearted person
b) Minor
c) Drunken person
d) Hypnotized person

34. What is the status of contract when one of the contracting parties is incapacitated to give consent to a contract while t he other
party is capacitated to give consent to a contract?
a) Rescissible
b) Voidable
c) Unenforceable
d) Void

35. An oral contract of sale of a piano worth P50,000 between V, the seller and a minor, and W, the buyer and an insane pers on. The
piano has been delivered and the price is already paid. State the status of the contract.
a) Valid and Enforceable
b) Unenforceable
c) Voidable
d) Void

36. Jho Marzel, a minor, orally sold a specific scooter to Sunoo, another minor at a price of P400. What is the status of co ntract of
sale of specific scooter? a) Valid and Enforceable
b) Unenforceable
c) Voidable
d) Void

37. Chariz is a jewelry appraiser working at Ira’s Jewelry shop. He found and sold a ring to Micah stating that it was a 24 -carat gold
ring even though it was only an
18-carat gold ring. Micah bought it and paid for it with cash. Is the contract defective?
a) Yes. It is voidable because of fraud.
b) No. It is valid and enforceable because the contract is already consummated. c) Yes. It is unenforceable because the sale is not
in writing.
d) Yes. It is void because V has no clear possession of the ring as he just found it.
38. It is a defective contract that is invalid and therefore not binding. It is an absolute nullity and produces no effect, as if had never
been executed or entered and cannot be ratified. The proper legal remedy is action for declaration of nullity of void contr act.
a) Void contract
b) Voidable contract
c) Unenforceable contract
d) Invalid contract

39. ______________ are those that meet all the legal requirements and limitations for the type of agreement involved and are ,
therefore, legally binding and enforceable.
a) Void
b) Voidable
c) Rescissible
d) Valid

40. Various stipulations of a contract shall be interpreted together. a) True

b) False
c) Maybe
d) Half yes, half no, but more on yes.

41. Which of the following is not a restriction on one’s capacity to act such as to give consent to a contract?
a) Deaf-mute
b) Minority
c) Marriage
d) Insanity

42. Laura was prompted to purchase several rice cookers because of the advertisements and statements made by Joanne, the sel ler,
that these rice cookers are the best rice cookers your money can buy and they are state-of-the-
art. However, she was disappointed when she got home and tested the rice cookers. May the statements and advertisement
made by Joanne be considered fraudulent?
a) Yes
b) No
c) Maybe
d) Absolutely.

43. Statement 1: Voidable contract is a defective contract that is valid and binding until rescinded by the court. It is a contract that
has caused a particular damage to one of the parties or to a third person, and which for equitable reasons may be set aside
even if it is valid. The proper legal remedy is action for rescission of rescissible contract.
Statement 2: Unenforceable contract is a defective contract that is valid although not binding until ratified. It is a contract that
for some reason cannot be enforced, unless it is ratified in the manner provided by law. There is no legal remedy required but
to leave the contract as it is.
a) Only statement 1 is true
b) Only statement 2 is true
c) Both statements are true
d) Both statements are false

44. ______________ contracts as by its effect is valid but cannot be enforced by a proper action in court.
a) Void
b) Voidable
c) Unenforceable
d) Rescissible

45. A mere expression of an opinion made by an expert will make the contract a) Void
b) Voidable
c) Rescissible
d) Valid

46. Intimidation made by a third person will the contract

a) Void
b) Voidable
c) Rescissible
d) Valid
47. Contracts entered into during a lucid interval are
a) Void
b) Voidable
c) Rescissible
d) Valid

48. Voidable contracts are contracts which are valid unless:

a) Physical coercion vitiates consent
b) Rescinded
c) Annulled
d) Entered into when one of the parties is a minor

49. It exists when a person takes improper advantage of his power over the will of another depriving the latter of a reasona ble
freedom of choice.
a) Intimidation
b) Undue Influence
c) Violence
d) Coercion

50. When the consent of a party was vitiated, the contract is:
a) Rescissible
b) Void
c) Voidable
d) Unenforceable

51. Violence or force brought upon the spouse of a contracting party and not on the contracting party himself does not vitiate consent.
a) True
b) False
 c) I don’t know
d) I want to shift programs.

52. A is a deaf-mute. Can he validly give consent, so he can enter into a valid contract?
a) No, because he is incapable of giving consent
b) Yes, if he knows how to write.
c) No, because is vulnerable to be defrauded
d) Yes, because he can act for himself.

53. Statement 1: A void contract may be ratified.

Statement 2: If the acceptance is qualified, it constitutes an option contract. a) Only statement 1 is true
b) Only statement 2 is true
c) Both statements are true
d) Both statements are false

54. The parents wanted to transfer to their children, both 18 years of age, their properties during their lifetime. They exe cuted a deed
of sale for 3 million pesos, but the children actually did not pay a single centavo for the transaction. What best describes the
contract?
a) The contract is voidable because their children are unemancipated.
b) The contract is void as it is absolutely simulated.
c) The contract is valid as between the parties.
d) The contract is unenforceable because it did not follow the Statute of Frauds.

55. The adoption or affirmation of a contract which is defective because of a party’s vitiated consent or incapacity.
a) Annulment
b) Rescission
c) Reformation
d) Ratification

56. A defective contract where damage or lesion is essential.

a) Void
b) Voidable
c) Rescissible
d) Valid

57. Contracts validly agreed upon may be rescinded in the cases established by law: a) 1379
b) 1380
c) 1381
d) 1382

58. This is the act of deliberately deceiving others, by feigning or pretending by agreement, the appearance of a contract that is either
non-existent or concealed.
a) Incidental fraud
b) Simulation of a contract
c) Undue influence
d) Legal claim

59. Cannot be sued upon or enforced unless they are ratified.

a) Void
b) Voidable
c) Rescissible
d) Unenforceable
60. These contracts are valid as all the essential requisites of a contract exist but by reason of economic injury or damage to one of
the parties of to the third person. a) Void
b) Voidable
c) Rescissible
d) Unenforceable
B 30. D
37. A 44. C
Summary of Answers 31.
1. C 2. B 3. A 4. A 5. B 6. B
C 38. A 45. B
7. C 8. A 9. D 10. C 11. C
32. A 39. D
12. D 13. C 14. D 15. B
46. B 47. D 48. C 49. B 50.
33. A 40. A
C 51. B 52. B 53. D 54. C
34. B 41. C
16. B 17. B 18. B 19. A 20. 55. D 56. A 57. B 58. B 59.

D 21. B 22. B 23. A 24. D 35. B 42. B D 60. C

25. A 26. B 27. C 28. A 29. 36. B 43. B

Summary of Answers – Explained

1. (C) The cause in a contract must exist, be lawful, and be true.

2. (B) If there is no consideration for the option, the offerer may withdraw the offer at anytime within the option period provided
there has not yet been any acceptance. (Art. 1324, Civil Code of the Philippines)

3. (A) As a general rule, no contract may be entered into upon future inheritance. (Art. 1347, Civil Code of the Philippines)

4. (A) When a right to sue upon a civil obligation has lapsed by extinctive prescription, the obligor who voluntarily perfor ms the
contract cannot recover what he has delivered or the value of the service he has rendered. (Art. 1424, Civil Code of the
Philippines) After 10 years, the debt of X prescribes for failure of Y to file the necessary action. If X voluntarily pays Y,
he cannot recover anymore what he has paid under the provisions of natural obligation.
5. (B) One of the sources of obligation is quasi-delict. (Art. 1157(5), Civil Code of the Philippines) Whoever by act or omission
causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence,
if there is no pre-existing contractual relation between the parties, is called a quasi-delict. (Art. 2176, Civil Code of the
Philippines)

6. (B) Compensation shall not be proper when one of the debts arises from a depositum or from the obligations of a depositary or of
a bailee in commodatum. (Art. 1287, Civil Code of the Philippines)

7. (C) Contract of pledge is perfected upon the delivery of the object of contract; Contract of sale is perfected at the moment there
is a meeting of minds upon the thing which is the object of the contract and upon the price;
Contract of subscription is perfected upon full payment of the shares; and Contract of agency is
perfected by mere consent.

8. (A) Contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract
and upon the price.
9. (D) An action for reformation of instrument may prosper only upon the concurrence of the following requisites:
(1) there must have been a meeting of the minds of the parties to the contract; (2) the instrument does not express the
true intention of the parties; and (3) the failure of the instrument to express the true intention of the parties is due to
mistake, fraud, inequitable conduct or accident.

10. (C) One of the rules that shall be observed in case of the improvement, loss or deterioration of the thing states that if it deteriorates
through the fault of the debtor, the creditor may choose between the rescission of the obligation and its fulfillment, with
indemnity for damages in either case. (Article 1189, Civil Code of the Philippines)

11. (C) Requisites of services as object of contract:

In order that service may be the object of a contract, the following requisites must concur: (1) The service must be within
the commerce of men;
(2) It must not be impossible, physically or legally (Art. 1348.); and
(3) It must be determinate or capable of being made determinate. (Arts. 1349.)

12. (D) Adhesion contracts are so-called because almost all their provisions have been drafted by one party, and the only participation
of the other party is the signing of his signature or his “adhesion’’ thereto on the “take it or leave it’’ basis, without the right
to modify it.

13. (C) The definition of contract is “a meeting of minds between two persons whereby one binds himself, with respect to the other,
to give something or to render some service.” (Article 1305, Civil Code of the Philippines)

14. (D) The particular motives of the parties in entering into a contract are different from the cause thereof. (Article 1351, Civil
Code of the Philippines)

15. (B) When a mutual mistake of the parties causes the failure of the instrument to disclose their real agreement, said ins trument
may be reformed (Article 1361, Civil Code of the Philippines)

16. (B) In order to judge the intention of the contracting parties, their contemporaneous and subsequent acts shall be principally
considered. (Article 1371)

17. (B) The stages of a contract is sequenced as:

(1) Preparation or Conception
(2) Perfection or Birth
(3) Consummation or Death or Termination
18. (B) There is NO mistake if the party alleging it knew the doubt or risk affecting the object of the contract. (Article 1333,
Civil Code of the Philippines)

19. (A) Business advertisement of things for sale are not definite offers, but mere INVITATIONS to make an offer. (Article
1325, Civil Code of the Philippines)

20. (D) Real contracts, such as deposit, pledge and COMMODATUM, are not perfected until the delivery of the object of the
obligation. (Article 1316, Civil Code of the Philippines)

21. (B) Under Art. 1320 of the Civil Code of the Philippines, an acceptance may be express or implied.

22. (B) Under Art. 1316 of the Civil Code of the Philippines, real contracts are not perfected until the delivery of the object of the
obligation.

23. (A) Refer to Article 1933 of the Civil Code. By the contract of loan, one of the parties delivers to another, either something not
consumable so that the latter may use the same for a certain time and return it, in which case the contract is called a
commodatum; or money or other consumable thing, upon the condition that the same amount of the same kind and quality
shall be paid, in which case the contract is simply called a loan or mutuum.
24. (D) A contract according to importance or dependence of one upon another are: (1) Principal; (2) Accessory;
and (3) Preparatory

25. (A) The general rule for obligatory force of contracts does not apply for validity, enforceability, and convenience.

26. (B) The rescission under Article 1380 is an equitable remedy granted by law to the contracting parties and sometimes even to
third persons in order to secure reparation of damages caused them by a valid contract, by means of the restoration of
things to their condition prior to the celebration of said contract.

27. (C) There are three types of mistakes in contract law: (1) unilateral mistakes (2) mutual mistakes, and (3) common mista kes. C
is the answer since according to Article 1361, a mistake of fact that is common to both parties of the instrument causes
the failure of the instrument to express their true intention.
28. (A) It is called expromission if the substitution is without the knowledge or against the will of the debtor, the new debtor’s
insolvency or non-fulfillment of the obligation shall not give rise to any liability on the part of the original debtor.

29. (B) Article 104 of Revised Penal Code, states that the extent of the civil liability for damages arising from crimes is governed by
The Revised Penal Code and the Civil Code.

30. (D) (Article 1323, Civil Code of the Philippines). An offer becomes ineffective upon the death, civil interdiction, insanity, or
insolvency of either party before acceptance is conveyed.

31. (C) Art. 1390 states that any contracts entered where consent is vitiated through undue influence is voidable.

32. (A) Defective contracts are: Unenforceable Contracts; Void or inexistent contracts; Voidable Contracts; and Rescissible
Contracts.

33. (A) A broken-hearted person is considered as having a sound mind and a capacitated person.

34. (B) The contracts entered into by the incapacitated persons enumerated in the law are not void. They are only voidable if only
one party cannot give his consent. But if both parties are incapacitated to give consent, the resulting contract is
unenforceable (Art. 1407).

35. (B) When both parties are incapacitated to give a consent, it is unenforceable, (Art.1407)

36. (B) When both parties are incapacitated to give a consent, it is unenforceable, (Art.1407)

37. (A) Under Art. 1341 of the Civil Code of the Philippines, an opinion made by an expert signify fraud if the other party has relied
on the former's special knowledge. In this case, Chariz is a jewelry appraiser who is expected to be an expert in rings.

38. (A) Refer to Art. 1409. Contracts that cannot be ratified and produce no force and effect are generally void.

39. (D) Valid contracts are those that meet all the legal requirements (Art. 1318) and limitations (Art. 1306) for the type of
agreement involved and are, therefore, legally binding and enforceable.

40. (A) The various stipulations of a contract shall be interpreted together, attributing to the doubtful ones that sense which may
result from all of them taken jointly. (Article 1374)
41. (C) According to Art. 1327, deaf-mute, insane or demented persons, and unemancipated minors are those considered
incapacitated to give consent.

42. (B) The usual exaggeration in trade are not in themselves fraudulent especially if the other can know the facts.

43. (B) Refer to Article 1380 of the Civil Code. Rescissible contracts are contracts that were validly agreed upon but may be
rescinded in the cases established by law.

44. (C) While rescissible and voidable contracts are valid and enforceable unless they are rescinded or annulled, unenforcea ble
contracts, although valid, are unenforceable unless they are ratified (Article 1403).

45. (B) Article 1341. A mere expression of an opinion made by an expert makes a contract VOIDABLE. An expert must express
facts and not opinions.

46. (B) Article 1336. Violence or intimidation will make the contract VOIDABLE or annullable. Even if it made by a third person.

47. (D) Article 1328. Lucid interval is a temporary period of sanity. A contract-entered into by an insane person during a lucid
interval is VALID.

48. (C) Voidable contracts are valid and binding between the parties unless annulled by a proper action in court.
49. (B) Under Art. 1337 of the Civil Code of the Philippines, there is undue influence when a person takes improper advantage of his
power over the will of another, depriving the latter of a reasonable freedom of choice.

50. (C) Art. 1390 stated that contracts where parties’ consent are vitiated by mistake, fraud, violence, intimidation, undue
influence are voidable.

51. (B) Article 1335 states that there is intimidation even if the subject of the intimidation is upon his person or property, upon his
spouse.

52. (B) Only deaf-mutes who do not know how to write cannot give consent to a contract. (Art. 1337, Civil Code of the
Philippines)
53. (D) Statement 1 is false. Inexistent and void contracts cannot be ratified. (Art. 1409, Civil Code of the Philippines) Statement 2
is false. A qualified acceptance constitutes a counter offer. (Art. 1319, Civil Code of the Philippines)

54. (C) A relative simulation, when it does not prejudice a third person and is not intended for any purpose contrary to law , morals,
good customs, public order, or public policy binds the parties to their real agreement. (Art. 1346, Civil Code of the
Philippines)

55. (D) Ratification cleanses the contract from all its defects from the moment it was constituted. (Art. 1396, Civil Code of the
Philippines)

56. (A) Art 1381 states that the absentee must suffer lesion by more than one fourth of the value of the property object to entitle
him to the remedy of rescission.

57. (B) The rescission under Article 1380 is an equitable remedy granted by law to the contracting parties and sometimes even to
third persons in order to secure reparation of damages caused them by a valid contract, by means of the restoration of
things to their condition prior to the celebration of said contract.]

58. (B) According to Art. 1345, Simulation of a contract may be absolute or relative. The former takes place when the parties do not
intend to be bound at all; the latter, when the parties conceal their true agreement.

59. (D) According to Article 1403, the contracts are unenforceable, unless they are ratified so the answer is letter unenforceable.

60. (C) Rescissible contracts are those validly agreed upon because all the essential elements exist and, therefore, legally effective,
but in the cases established by law, the remedy of rescission is granted in the interest of equity.