Accounting Law Business Transactions PDF

Accounting Law on Business Transactions DEPARTMENT LONG EXAM 1 (SET A) PART I. INSTRUCTION: Read each question carefully and mark the letter of your choice in the answer sheet provided (1 point each question). 1. If several pers...

Accounting Law on Business Transactions DEPARTMENT LONG EXAM 1 (SET A) PART I. INSTRUCTION: Read each question carefully and mark the letter of your choice in the answer sheet provided (1 point each question). 1. If several persons or co-owners, jointly and in the same contract, should sell an undivided immovable with a · right of repurchase, which is true? a. None of the co-owners may exercise their right to repurchase for more than their respective shares. b. The buyer a retro may demand that the co-owners come to come to an agreement upon the repurchase of the whole thing, and if they fail to do so, the buyer a retro cannot be compelled to consent to a partial redemption. c. Both A and B. d. Neither A nor B. 2. In which of the following cases is the price of the contract of sale considered uncertain making the contract void ab initio? a. Sale of a specific cellphone whereby the price is left by the buyer and seller to the judgment of a specified third person b. Sale of a specific laptop whereby the price is the monthly salary of Atty. John Lloyd Cruz c. Sale of a specific tablet whereby the price of P40,000 is fixed by the seller but voluntarily accepted by the buyer d. Sale of preferred stock of Globe Incorporated equivalent to the closing price of common stock of Smart Incorporated in the Philippine Stock Exchange on October 4, 2020 3. S and B orally entered into a contract involving a production of a particular dining table based on the design specifically customized for B at a price of P500 with the payment and delivery to be made one month from the date of oral agreement. The estimated production cost of the said dining table is P800. What is the status of contract between S and B? a. Perfectly valid contract b. Rescissible contract c. Voidable contract d. Unenforceable contract 4. S and B entered into a contract whereby S will deliver a specific laptop valued at P40,000 while B will deliver a specific laptop P20,000 plus a cash amounting to P20,000. What is the nature of contract between S and B? a. Contract of barter b. Contract of sale c. Contract of lease d. Contract for a piece of work 5. Which of the following is not an essential element of contract of sale? a. Subject matter which should be a determinate thing b. Price certain in money or its equivalent c. Delivery of the subject matter from the seller to the buyer  d. Meeting of minds as to the determinate thing and the price certain in money 6. Which of the following may not become a subject matter of contract of sale? a. Future goods b. Vain hope c. Undivided interest in a property d. Things subject to a resolutory condition 7. S and B orally agreed for the sale of a specific car at a price of P100,000. As a downpayment, B paid manager’s check with amount of P10,000 to S on the date of oral agreement. Delivery of the car will happen after the full payment of the price which will happen 2 years after the date of oral agreement. Which of the following statements is correct? a. B may legally compel S to sign and execute the notarized deed of sale of car. b. The oral contract of sale of car between S and B is unenforceable by court action. c. I B decides to buy the car 2 years after the oral agreement, he must still the total purchase price of P100,000 to S. d. The oral contract entered between S and B is a contract of option perfected by the issuance by B of manager’s check to S. 8. When does the buyer obtain personal right over the fruits of the determinate thing sold in a contract of sale? a. From the moment of actual delivery b. From the moment of constructive delivery c. From the moment of perfection of contract of sale d. From the moment of full payment of the price 9. What is the effect of the complete loss of the subject matter of the contract of sale before the perfection of the contract of sale or at the exact moment of the perfection of the contract of sale? a. The buyer is still required to pay the price. b. The contract of sale is void ab initio. c. The contract of sale is voidable. d. The seller is still required to deliver the determinate thing to the buyer. 10. Who shall suffer the risk of complete loss of the determinate thing of the object of the contract of sale after perfection of contract of sale but before the delivery of the subject matter to the buyer? a. Seller on the basis of res perit domino b. Buyer on the basis of res perit domino c. Buyer because he is entitled to the fruits after perfection of contract of sale d. Seller provided the buyer has not fully paid the price 11. A, an adult, sold and delivered a specific ballpen to M, a minor, at a reasonable price of P10. Is M legally required to pay the reasonable price? a. No because the contract is covered by statute of fraud, therefore, unenforceable. b. Yes because the subject matter specific ballpen is a necessary. c. No because the contract is voidable, therefore, subject to annulment of contract. d. Yes because M is guilty of bad faith. 12. As a general rule, what is the operative act that transfers ownership from the seller to the buyer in a contract of sale? a. Full payment of the price b. Actual delivery or constructive delivery of the determinate thing to the buyer c. Meeting of minds between the buyer and seller as to the determinate thing and the price certain  d. Registration of the certificate of title to the appropriate registry or book 13. S sold the mass of Dinorado Rice stored in his specific warehouse to B at a price of P100,000. At the agreed date of delivery, S delivered the key of the warehouse to B. What type of constructive delivery is done by S to B? a. Traditio clavium b. Traditio longa manu c. Traditio brevi manu d. Traditio constitutum possessorium e. Traditio by execution of formalities or solemnities 14. S sold a specific van to B at a price of P100,000. Before the physical delivery of the said van to B, B leased it back to S so the physical delivery did not prosper. What What type of constructive delivery is present in the case at bar? a. Traditio clavium b. Traditio longa manu c. Traditio brevi manu d. Traditio constitutum possessorium e. Traditio by execution of formalities or solemnities 15. On August 1, 2020, S orally sold and delivered a specific laptop to B at a price of P25,000 under a sale or return arrangement with a return period of one month. The contract provides the payment of the price will be done on August 31, 2020. On August 15, 2020, B was robbed of the said laptop by a holdaper. Which of the following statements is correct? a. The contract of sale is unenforceable because it is covered by statute of fraud. b. B is no longer required to pay the price of P25,000 because the contract of sale is extinguished by robbery which is considered a fortuitous event. c. B is still required to pay the price because of the concept of res perit domino. d. The contract of sale is void ab initio because of the absence of subject matter. 16. In sale on trial or sale on approval, which of the following acts does not transfer ownership of the subject matter from the seller to the buyer? a. The buyer signifies to the seller his approval or acceptance of the goods. b. The seller actually or constructively delivered the subject matter to the buyer. c. The buyer does an act adoption the transaction such as by consuming the subject matter or destroying the subject matter. d. The buyer retains the subject matter without giving notice of rejection to the seller within the time fixed in the contract or within reasonable time. 17. T surreptitiously stole the specific necklace of S. Afterwards, T sold and delivered the said necklace to B at a price of P10,000. B acquired the said necklace in good faith and for value. Which of the following statements is correct? a. S can legally recover the necklace from B even without reimbursing B. b. S may legally recover the necklace from B but S must reimburse B of the amount of P10,000. c. S can never legally recover the necklace from B because the latter is a purchaser in good faith and for value. d. S cannot legally recover the necklace from B unless he reimburses B of the amount of P10,000. 18. D deposited his specific laptop to the baggage counter of SM Appliance Store. The store manager displayed the said laptop at the said store and placed a tag price of P20,000. B saw the said displayed laptop and acquired it from SM Appliance Store for P20,000. Which of the following statements is correct? a. D can legally recover the laptop from B even without reimbursing B. b. D may legally recover the laptop from B but he must reimburse B of the amount of P20,000. c. D cannot legally recover the laptop from B because the latter obtained good title over the laptop.  d. D cannot legally recover the laptop from B unless he reimburses B of the amount of P10,000. 19. M, a minor, sold and delivered a specific cellphone to B at a price of P15,000. Afterwards, B sold and delivered the said cellphone to T, a purchase in good faith and for value, at a price of P10,000. Which of the following statements is correct? a. T obtained a voidable title over the specific cellphone. b. T obtained a good title over the specific cellphone. c. T obtained a void title over the specific cellphone. d. T obtained a rescissible title over the specific cellphone. 20. A person sold his immovable property to another person under pacto de retro sale. If that seller a retro left several heirs, which is true? a. None of the heirs may exercise their inherited right to repurchase for more than their respective shares. b. The buyer a retro may demand that the heirs come to come to an agreement upon the repurchase of the whole thing, and if they fail to do so, the buyer a retro cannot be compelled to consent to a partial redemption. c. Both A and B. d. Neither A nor B. 21. The following are the three instances of legal redemption. Which of the following pertains to legal pre-emption? a. A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners or of any of them, are sold to a third person. b. If a piece of rural land not exceeding one hectare is alienated, the adjoining owner shall have the right of legal redemption unless the grantee does not own any rural land. c. If a small piece of urban land which was bought for speculation has been resold, the owner of the adjoining land has a right of redemption at a reasonable price. d. If a small piece of urban land is about to be resold, the adjoining owner shall be given the right to buy the property before it is offered to other. 22. A rural land owner sold his land not exceeding 1 hectare (10,000 sqm) to another person who owns any other rural land. There are two or more adjacent rural land owners who intend to exercise their right of legal redemption. Who shall be preferred? a. The adjacent rural land owner with smaller area of lot. b. The adjacent rural land owner with larger area of lot c. The adjacent rural land owner whose intended use of the land in question appears best justified. d. The adjacent rural land owner which offers the largest amount. 23. An urban land owner sold a piece of land which is so small and so situated that a major portion thereof cannot be used for any practical purpose within a reasonable time, having been bought merely for speculation. There are two or more adjacent urban land owners who intend to exercise their right of legal redemption. Who shall be preferred? a. The adjacent urban land owner with smaller area of lot. b. The adjacent urban land owner with larger area of lot c. The adjacent urban land owner whose intended use of the land in question appears best justified. d. The adjacent urban land owner which offers the largest amount. 24. The following are the instances wherein a contract of sale with a right to repurchase and other contract purporting to be an absolute sale shall be presumed to be an equitable mortgage, except a. When the purchaser retains for himself part of the purchase price b. When the vendor binds himself to pay the real property taxes on the thing sold c. When the real intention of the parties is that the transaction shall secure the payment of a debt or the performance of any other obligation  d. When the buyer filed an action for exact fulfillment to collect the balance of the price 25. In case of doubt in construing a contract which has the characteristics of both sale with right to repurchase and an equitable mortgage, what shall be the general construction of the contract? a. Absolute sale b. Pacto de retro sale c. Equitable mortgage d. Lease 26. As a general rule, the assignor of credits is not liable for the insolvency of the debtor of the credit. When may the assignor or vendor in assignment of credits become liable for the insolvency of the debtor? a. When it is expressly stipulated that the assignor warrants the solvency of debtor. b. When the insolvency of debtor was prior to the sale and of common knowledge. c. Either A or B d. Neither A nor B 27. Which of the following is not an essential element of contract of sale? a. Subject matter which should be a determinate thing b. Price certain in money or its equivalent c. Delivery of the subject matter from the seller to the buyer d. Meeting of minds as to the determinate thing and the price certain in money 28. In which of the following instances are the goods still in transit? I. From the time they are delivered to the carrier or other bailee for the purpose of transmission to the buyer, until the buyer or his agent, takes delivery of them from such carrier or other bailee. II. If the goods are rejected by the buyer, and the carrier or other bailee continues in possession of them, even if the seller has refused to receive them back III. If the buyer obtains delivery of the goods before arrival at the appointed destination. IV. If the carrier or other bailee acknowledges to the buyer or his agent, that he is holding the goods in his behalf, after arrival of the goods at their appointed destination. V. If the carrier or other bailee wrongfully refuses to deliver the goods to buyer or his agent. a. I and II b. III, IV and V c. I and V d. II, III and IV 29. Which of the following is not a ground for right of resale by an unpaid seller? a. The goods are of perishable nature. b. The seller has expressly reserved the right to resell the goods in case the buyer should make default. c. The buyer has been in default for an unreasonable time. d. The buyer becomes solvent. 30. In what type of waiver by the buyer of warranty against eviction will the seller become fully exempted from liability in case of eviction? a. Waiver quanti minoris b. Waiver consciente c. Waiver redhibitoria d. Waiver intentionada 31. Which of the following is a ground for right to rescind the sale by an unpaid seller?  a. The seller has expressly reserved the right to rescind the goods in case the buyer should make default. b. The buyer has been in default for an unreasonable time. c. Either a or b d. Neither a nor b 32. S sold to B a lot with an area of 100 square meters at a price of P1,000 per square meter. Within six (6) months from the date of delivery of the lot, B discovered that the actual area of the said lot is only 90 square meters. What is the remedy available to B regarding this deficiency in the area of the lot? a. Ask for proportionate reduction of price by paying only P90,000 b. Ask for rescission or cancellation of contract of sale of the 100 square meters lot c. Either a or b d. Neither a nor b 33. S sold to B a lot with an area of 100 square meters of garden soil at a price of P1,000 per square meter. Within six (6) months from the date of delivery of the lot, B discovered that the actual area of the said lot consists of 89 square meters garden soil and 11 square meters sand soil. What is the remedy available to B regarding this inferior quality of the lot? a. Ask for proportionate reduction of price b. Ask for rescission or cancellation of contract of sale of the 100 square meters lot c. Either a or b d. Neither a nor b 34. Which of the following is not a requirement of a double sale? a. There must be a single property involved. b. There must be two or more different buyers whose rights are conflicting. c. The buyers must have acquired the same property from the same seller. d. The deeds of sales must all be in public instrument. 35. In case of double sale of movable or personal property, who among the buyers of the said movable property from the same buyer shall prevail? a. Buyer with the oldest title b. First possessor, either actual or constructive possession, of the movable property in good faith c. First payor of the movable in good faith d. First registrant of the deed of sale of movable property in good faith 36. In case of double sale of titled immovable or real property, who among the buyers of the said immovable property from the same buyer shall prevail? a. Buyer with the oldest title b. First possessor, either actual or constructive possession, of the immovable property in good faith c. First payor of the movable in good faith d. First registrant of the deed of sale of immovable property in good faith 37. It refers to a type of waiver of warranty against eviction that is made by the buyer when he acted in good faith because he has no knowledge of risk of eviction. In this case, the seller is still liable for eviction but only up to the extent of the value of the thing at the time of eviction. a. Waiver consciente b. Waiver intentionada c. Waiver possessionada d. Waiver reindivicatoria 38. On January 1, 2021, S sold a specific lot to B. Unfortunately, the said lot is encumbered by a nonapparent and  unregistered burden or servitude of septic tank. On July 1, 2022, B discovered the said servitude. What is the legal remedy still available to B? a. Action for rescission or cancellation of the sale of the lot b. Action for indemnification for damages c. Either a or b d. Neither a nor b 39. In case of breach of warranty of merchantability or quality of a product, which of the following is a remedy not available to the injured buyer? a. Accept or keep the goods and set up against the seller the breach of warranty by way of recoupment or diminution or extinction of the price. b. Accept or keep the goods and maintain an action against the seller for damages for breach of warranty. c. Refuse to accept the goods, and maintain an action against the seller for damages for breach of warranty. d. Rescind the sale and refuse to receive the goods or if the goods have already received, return them or offer to return them to the seller and recover the price of any part thereof which has been paid. e. Ask for declaration of nullity of contract of sale on the ground of absence of subject matter 40. Which of the following is not a requisite for the enforcement of vendor’s liability for hidden defect on the thing sold? a. The defect must exist at the time of sale. b. The defect must be hidden. c. The defect must render the thing unfit for the use for which it is intended or diminishes its fitness for such use to such an extent that had the vendee been aware thereof, he would not have acquired it or would have given a lower price for it. d. The action to enforce the warranty against hidden defect must be made within the 6-month period provided by law from the time of delivery. e. The warranty against hidden defect must be expressly stipulated in a contract of sale. 41. What is the status of sale of broiler chicken suffering from bird flu? a. Rescissible contract b. Voidable contract c. Unenforceable contract d. Void contract 42. On January 1, 2020, S sold and delivered a specific house and lot to B with a stipulation that the price of P1,500,000 will be paid on July 1, 2020. The contract provides that in case of non-compliance by B on the payment of the price, the contract of sale of house and lot will be automatically cancelled on the date of default. On July 1, 2020, B defaulted in the payment of the price. Which of the following statements is correct? a. The contract of sale of house and lot is automatically cancelled on July 1,2020 based on autonomy of contract. b. B may still pay the price of P1,500,000 after his default on July 1,2020 provided notarial or judicial demand for rescission has not yet been made by the seller to him. c. S may forcibly evict B from the possession of the said house and lot based on the provision of contract. d. B can never be evicted from the possession and ownership of the said house and lot because he is already the owner upon its delivery. 43. Which of the following remedies available to the seller for the breach of contract of sale committed by the buyer is correct? a. Assuming the goods have already been delivered to the buyer and the buyer wrongfully neglects or refuses to pay the price, the seller may maintain an action for the price of the goods or may file an action to collect a sum of money. b. If the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may maintain an action for damages.  c. Assuming the goods have not yet been delivered to the buyer and (1) If the buyer has repudiated the sale or (2) If the buyer manifested his inability to perform his obligation to pay the price or (3) If the buyer has committed a breach of contract, the seller may rescind the contract of sale. d. All of the above 44. F sold a specific land to B under pacto de retro sale or sale with a right to repurchase. Immediately after the sale, F died of heart attack. F left 3 children named C, D and E. Which of the following statements is correct? a. C may legally compel B for the redemption or repurchase of his 1/3 share in the said land of his father. b. D and E may legally compel B for the redemption or repurchase of their 2/3 share in the said land of their father. c. B may legally demand D, E and F to come to an agreement upon the repurchase of the whole land, and if they fail to do so, B cannot be compelled to consent to a partial redemption of the said land. d. E may legally redeem or repurchase the whole property from B despite the absence of consent or authority from C and D. 45. A, B and C are co-owners of a specific land. On October 1,2020, A sold his 1/3 share in the said land to D under a deed of pacto de retro sale. On October 2,2020, B also sold his 1/3 share in the said land to D a deed of under pacto de retro sale. On October 3,2020, C also sold his 1/3 share in the said land to D under a deed of pacto de retro sale. Which of the following statements is correct? a. C may legally compel D for the redemption or repurchase of his 1/3 share in the said land. b. A cannot legally compel D for the redemption or repurchase of his 1/3 share in the said land. c. D may legally demand A, B and C to come to an agreement upon the repurchase of the whole land, and if they fail to do so, D cannot be compelled to consent to a partial redemption of the said land. d. None of the above 46. X sold Y 100 sacks of rice that Y was to pick up from X’s rice mill on a particular date. Y did not, however, appear on the agreed date to take delivery of the rice. After one week, X automatically rescinded the sale without notarial notice to Y. Is the rescission valid? a. Yes, automatic rescission is allowed since, having the character of movables and consumables, rice can easily deteriorate. b. No, the buyer is entitled to a customary 30-day extension of his obligation to take delivery of the goods. c. No, since there was no express agreement regarding automatic rescission. d. No, the seller should first determine that Y was not justified in failing to appear. 47. Lino entered into a contract to sell with Ramon, undertaking to convey to the latter one of the five lots he owns, without specifying which lot it was, for the price of P1 million. Later, the parties could not agree which of five lots he owned Lino undertook to sell to Ramon. What is the standing of the contract? a. Unenforceable b. Voidable. c. Rescissible. d. Void. 48. An agent, authorized by a special power of attorney to sell a land belonging to the principal succeeded in selling the same to a buyer according to the instructions given the agent. The agent executed the deed of absolute sale on behalf of his principal two days after the principal died, an event that neither the agent nor the buyer knew at the time of the sale. What is the standing of the sale? a. Voidable. b. Valid. c. Void. d. Unenforceable. 49. Aligada orally offered to sell his two-hectare rice land to Balane for P 10Million. The offer was orally accepted. By agreement, the land was to be delivered (through execution of a notarized Deed of Sale) and the price was to  be paid exactly one-month from their oral agreement. Which statement is most accurate? a. If Aligada refuses to deliver the land on the agreed date despite payment by Balane, the latter may not successfully sue Aligada because the contract is oral. b. If Aligada refused to deliver the land, Balane may successfully sue for fulfillment of the obligation even if he has not tendered payment of the purchase price. c. The contract between the parties is rescissible. d. The contract between the parties is subject to ratification by the parties. 50. Michael Fermin, without the authority of Pascual Lacas, owner of a car, sold the same car in the name of Mr. Lacas to Atty. Buko. The contract between Atty. Buko and Mr. Lacas is --- a. void because of the absence of consent from the owner, Mr. Lacas. b. valid because all of the essential requisites of a contract are present. c. unenforceable because Michael Fermin had no authority but he sold the car in the name of Mr. Lacas, the owner. d. rescissible because the contract caused lesion to Atty. Buko. 51. Knowing that the car had a hidden crack in the engine, X sold it to Y without informing the latter about it. In any event, the deed of sale expressly stipulated that X was not liable for hidden defects. Does Y have the right to demand from X a reimbursement of what he spent to repair the engine plus damages? a. Yes. X is liable whether or not he was aware of the hidden defect. b. Yes, since the defect was not hidden; X knew of it but he acted in bad faith in not disclosing the fact to Y. c. No, because Y is in estoppel, having changed engine without prior demand. d. No, because Y waived the warranty against 52. A and B orally entered into a contract of sale of a specific authentic Coach bag at a price of P10,000. A paid an arras money amounting to P500 at the time of constitution of the contract. The parties agreed that the balance of the price will be paid after one month while the said bag will delivered after one week. At the agreed date of delivery of the bag, B delivered a counterfeited coach bag. What is the best legal remedy available to A? a. File an action for damages for breach of contract of sale. b. File an action for annulment of voidable contract of sale. c. File an action for declaration of nullity of void contract of sale. d. He has no action because the contract of sale is unenforceable. 53. On January 1, S delivered a specific laptop to B under a sale or return arrangement. S gave B up to April 1 to return the specific laptop. On March 1, the specific laptop was destroyed by fire without B’s fault. Which of the following is correct? a. B is not required to pay the price of the laptop because the obligation is extinguished by fortuitous event. b. S is still the owner of the specific laptop since B has not yet signified his approval or satisfaction of the said item. c. B will become owner of the specific laptop only upon full payment of the price. d. S can collect the price even if the loss is without B’s fault. 54. Minor, a ward, sold in writing the cellphone of his father, his legal guardian, to an insane, during the latter’s lucid interval at a price of P10,000 when the cellphone’s book value is still P15,000 resulting to lesion more than ¼ the value of the thing sold. What is the status of the contract of sale? a. Rescissible b. Voidable c. Unenforceable d. Void 55. On January 1, 2001, S and B agreed in writing for the sale of specific TV at a price of P10,000. The terms of the contract provide the delivery of the TV shall be made on January 5, 2001 while the payment of the price is on a deferred term to be made on April 1, 2001. On January 5, 2001, S failed to deliver the TV set despite extrajudicial demand for the delivery made by B. Which of the following is correct? a. S may exercise his right of possessory lien because he has not yet received the price. b. S may exercise his right of stoppage in transitu because he is an unpaid seller. c. B may file an action for specific performance with damages against S. d. B may file an action for declaration of nullity of the contract of sale. 56. On January 1, 2001, S entered into a notarized contract to sell with A involving a specific laptop without payment of price. On January 2, 2001, S orally entered into a contract of sale with B involving again the same laptop. On January 3, 2001, S sold in written private instrument the same laptop to C who fully paid the price but without physical delivery. After discovery of the sale to C, B immediately obtained physical possession of the laptop from S. Who has better right over the laptop? a. A b. B c. C d. S 57. Mr. A orally sold his specific land to Mr. B at a selling price of P499. The delivery and payment will be made after two months. On the agreed date of performance of contract, Mr A did not perform his obligation. What is the remedy available to Mr. B? a. File an action for specific performance b. He has no remedy. c. File an action to compel Mr. A to execute a written contract d. File an action for declaration of nullity 58. W and H are legally married under property regime of absolute community. W orally sold his specific laptop to H at a price of P500 when its book value is still P800 after H pointed a gun to W. Delivery and payment will happen after two years. What is the status of contract of sale of the specific laptop between W and H? a. Unenforceable b. Void c. Voidable d. Rescissible 59. S sold a lottery ticket No. 143 to B on January 2,2012. The draw was already made on January 1,2012 and ticket No. 143 did not win. B purchased the ticket with intent to win the jackpot price. Is the contract of sale between S and B valid? a. Yes because it involves emptio spei or sale of mere hope. b. No because the sale of vain hope or expectancy is void. c. No even if the ticket is considered collector’s item. d. Yes because the essential elements of contract of sale are present. 60. S sold his specific land to B under pacto de retro sale or sale with a right to repurchase whereby it was stipulated that the period of redemption is 25 years. What is the period for redemption of the said land? a. 25 years b. 4 years c. 10 years d. 30 days 61. Lebron is the registered owner of a vacant lot. Kevin stole the certificate of title of the registered lot of Lebron  and through connivance with a notary public, he was able to execute a notarized deed of sale through forging the signature of Lebron. With connivance with a Registry of Deeds, Kevin was able to transfer the title of the lot to his name. Afterwards, Kevin sold the said lot to Carmelo who acquired the said lot after inspecting the title and the vacant lot. Carmelo is a purchaser in good faith and for value. Which of the following statements is correct? a. The contract of sale between Kevin and Carmelo is void because it is the product of a previous void contract. b. Lebron can recover the land from Carmelo because the title acquired by Carmelo is that of a thief even without reimbursing Carmelo. c. Lebron can recover the land from Carmelo provided he will reimburse him for the price Carmelo paid. d. Lebron cannot recover the land from Carmelo because a forged document or deed of sale, in case of registered lot, can be a root of a valid title if the title is already in the hand of a purchaser for value and in good faith. 62. X and Y are good friends. X sold and delivered his car to Y. It was agreed and understood that on next Sunday X will name and fix the price of the car. Sunday came, X called Y by telephone and stated and fixed the price at P150,000. Is the contract of sale perfected? a. No because the purchase price is not yet paid. b. No because the title is not registered to the buyer. c. Yes because the car has already been delivered to Y. d. No because the price of the sale was left to the discretion of one of the parties, that is, the seller, and it was not consented by the buyer. 63. S sold to B a specific good. The price of the good cannot be determined. The good has been delivered to and appropriated by B. What is the obligation of B? a. B has no obligation because the contract of sale is null and void having no price. b. B has no obligation because the contract of sale is inefficacious because the price of the good cannot be determined. c. B has the obligation to rescind the contract. d. B has the obligation to pay a reasonable price which depends on the circumstances of each particular case. 64. Which of the following is an accidental element in a contract of sale? a. Price certain in money b. Warranty against eviction c. Interest on the price d. Determinate thing 65. In which of the following transfers is right of legal redemption applicable? a. Donation b. Succession c. Neither A nor B d. Both A and B 66. As a general rule, how is a contract of sale of a piece of land perfected? a. By mere consent b. By delivery of the subject matter c. By execution of formality required by law d. By registration of deed of sale 67. M, a minor, sold in writing his specific laptop to I, an insane during the lucid interval of the latter at a price of P10,000 when its fair market value is P15,000. What is the status of the contract of sale? a. Rescissible b. Voidable  c. Unenforceable d. Void 68. On October 1, 2022, S orally sold and delivered his specific car to B under sale or return arrangement with a price of P100,000 for a period of 30 days. On October 16, 2022, the said car was stolen by robbers. If B does not want to pay the price, what legal remedy is available to S? a. Action for annulment of contract of sale b. Action for declaration of nullity of contract of sale c. Action to collect the price against B d. None of the above 69. T stole the specific laptop of O. Afterwards, T sold and delivered the said laptop to B at a price of P10,000. B paid the said price to T without any knowledge as to the defect in the title of T. Which of the following statements is incorrect? a. The contract of sale between T and B is void because T is not the owner of the specific laptop. b. O can only recover the laptop from B if will be able to reimburse the latter the amount of P10,000 because B is a purchaser in good faith and for value. c. Neither a nor b d. Both a and b 70. H and W entered into a contract of marriage on July 1, 1990. Afterwards, H, through force and intimidation, compelled W to orally sold her specific land, classified as exclusive property, to H at a price of P100,000 when the fair market value is P150,000. What is the status of the contract of sale? a. Rescissible b. Voidable c. Unenforceable d. Void 71. On January 1, 2022, S orally sold a titled lot to A who already paid the price. On February 1, 2022, S sold again the same property to B under notarized deed of sale. On February 2, 2022, B registered his adverse claim to the said property in the Registry of Deeds. On March 1, 2022, S sold again the same property to C under notarized deed of sale who registered the said document to the Registry of Deeds on the same date. On April 1, 2022, S sold again the said lot to D who immediately obtained physical possession of the lot. Who among the buyers will have the best right over the property? a. A b. B c. C d. D 72. P authorized A to sell his specific car at a price of P100,000. Instead of finding a buyer, A decided to acquire the said specific car at a price of P90,000 and remitted the payment to P who accepted the payment after obtaining knowledge that A is the buyer. What legal remedy is available to P? a. Action for rescission of contract of sale b. Action for annulment of contract of sale c. Action for declaration of nullity of contract of sale d. None of the above 73. What is the operative act that transfers ownership of the determinate thing from the seller to the buyer in a contract of sale? a. Always delivery b. Always payment of the price c. Perfection of contract of sale d. None of the above 74. In which of the following types of transfer will allow the proper party to exercise the right of conventional redemption? a. Barter b. Dacion en pago c. Either a or b d. Neither a nor b 75. On January 1, 2022, S, an adult, sold a specific car at a price of P1,000,000 payable in 10 equal annulment installments starting December 31, 2022 to B, a 16-year old student. After payment of three consecutive annual installments by B, who can file an action for annulment? a. Guardian of B b. B c. S d. None of the above 76. A agreed to sell to B all the 100 bales of long staple Philippine cotton lying in his bodega. Unknown to both the parties, the cotton had already destroyed in accidental fire. In this case, the contract of sale is a. Voidable at the option of the seller b. Voidable at the option of the buyer c. Not void as the contract of sale is for unascertained goods d. Void as the contract of sale is for specific goods 77. LA Lakers entered into a contract with Nike Inc to provide two pairs of basketball shoes for Kobe Bryant and Andrew Bynum. No pair was, however, available at the time of perfection of the contracts. Kobe wears 10” basketball shoes which Nike normally manufactures for the general market while Andrew wears 20” basketball shows which will be manufactured specially for Andrew. What contracts are entered into by the parties? a. Both contracts of sale b. Both contracts for a piece of work c. Contract of sale for Kobe’s shoes and contract for a piece of work for Andrew’s shoes d. Contract of sale for Andrew’s shoes and contract for a piece of work for Kobe’s shoes 78. The following are the distinctions between contract of sale and contract to sell, except a. In contract of sale, ownership passes to the buyer upon delivery while in contract to sell, the title to the goods does not pass to the buyer until some future time and oftentimes upon payment of the price. b. In contract of sale, the risk of loss or damage to the goods upon delivery is on the buyer, under the rule “res perit domino”, or the thing perished with the owner; while in contract to sell, the risk is borne by the seller based on the same principle that the thing perishes with the owner. c. In contract of sale, the non-payment of the price is a resolutory condition while in contract to sell, the payment in full of the price is a suspensive condition. d. The rule on double sale applies to contract to sell while contracts of sale are not covered by rule on double sale. 79. Future things or things having a potential existence may be the object of a contract of sale. However, the thing must come into existence; otherwise, the sale will not be effective for not having a subject matter. The following future things can be the object of a contract of sale, except a. Wine that a determinate vineyard is expected to produce b. Milk that a specific female cow may yield during the coming year c. Next catch of a specific fisherman’s net d. Future inheritance of an heir 80. Which of the following contracts of sale is null and void? a. Executory oral sale of real property or any interest therein regardless of the price. b. Executory oral sale of goods, chattels or things in action the price of which is P500 or more. c. Sale of a piece of land by the agent in the name of principal wherein his authority is not in writing. d. Sale of a piece of land by a third person in the name of owner but who has not been given any authority PART II. ESSAY. Read each question carefully and write your answer on a yellow paper. 1. Distinguish contract of sale from dacion en pago and payment by cession (5 points) 2. Compare and contrast the following right of unpaid seller: (a) right to possessory lien and (b) right of stoppage in transit (5 points) 3. Compare and contrast the essential elements, natural elements, and accidental elements of a contract of sale 4. Distinguish Waiver Consciente from Waiver Intentionada 5. Enumerate the Modes of Extinguishment of a Contract of Sale 6. Differentiate conventional redemption from legal redemption. END