Law on Obligations and Contracts PDF

 OBLIGATIONS AND CONTRACTS 1. What is NOT a requisite of a valid obligation? a. Active Subject b. Passive Subject c. Prestation d. Legal Party 2. “X will give Y Php 1 Million if it rains tomorrow morning”. The statement demonst...

 OBLIGATIONS AND CONTRACTS 1. What is NOT a requisite of a valid obligation? a. Active Subject b. Passive Subject c. Prestation d. Legal Party 2. “X will give Y Php 1 Million if it rains tomorrow morning”. The statement demonstrates what kind of condition? a. Casual b. Mixed c. Potestative d. Impossible 3. Which of the following constitutes a condition? a. Future event and certain to happen b. Past event and known to parties c. Both A and B d. None of the above 4. According to Article 1232, “_______ means not only the delivery of money but also the performance, in any other manner, of an obligation”. a. Condition b. Payment c. Satisfaction d. Period 5. It 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. a. Obligation b. Contract c. Law d. Consent 6. In an obligation to give (a thing), a thing may either be specific or generic. What thing is designated only by its class? a. Specific b. Determinate c. Generic d. Both B and C 7. Solutio indebiti and negotiorum gestio are under? a. Quasi-contracts b. Quasi-delicts c. Delicts d. Contracts 8. In a ‘dolo incidente’, who is liable for damages? a. Obligee b. Obligor c. No one d. Both A and B 9. It refers to when the arrival of the period extinguishes the obligation which is already existing. For example, "X will give Y a Php 5,000.00 monthly allowance starting today until December 25, 2025.” a. Facultative Obligation b. Suspensive Obligation c. Resolutory Obligation d. Alternative Obligation 10. Which of the following statements is NOT correct? a. Whoever pays for another may demand from the debtor what he has paid, except that if he paid without the knowledge or against the will of the debtor, he can recover only insofar as the payment has been beneficial to the debtor. b. Whoever pays on behalf of the debtor without the knowledge or against the will of the latter, cannot compel the creditor to subrogate him in his rights, such as those arising from a mortgage, guaranty, or penalty. c. If the debtor to whom the tender of payment has been made refuses without just cause to accept it, the creditor shall be released from responsibility by the consignation of the thing or sum due. d. None of the above. 11. When a thing goes out of commerce, this is called ____. a. Physical Loss b. Legal Loss c. Civil Loss d. Natural Loss 12. In passive solidarity, solidarity is on the part of the ____. a. Debtors b. Creditors c. Both of the parties d. None of them 13. Statement I. An obligation is nothing more than the duty of a person (obligor) to satisfy a specific demandable claim of another person (obligee) Statement II. A contract gives rise to an obligation so an obligation always needs to have a contract. a. Statement I is false b. Statement II is false c. Both statements are false d. Both statements are true 14. The following are the effects of acquittal in a criminal case EXCEPT : a. There is a civil liability when the acquittal is due to reasonable doubt. b. There is a civil liability when there is a preponderance of the evidence. c. There is a civil liability when acquittal is due to exempting circumstances. d. None of the above 15. Statement I. Personal obligation is the obligation to give while real obligation is the obligation to do or not to do. Statement II. Mora solvendi ex persona is the default in personal obligations while mora solvendi ex re is the default in real obligations. a. Statement I is false b. Statement II is false c. Both statements are false d. Both statements are true 16. It is a resolution or cancellation of the contract. a. Rescission b. Usury c. Reciprocal d. Remedies 17. It is a delay on the part of the creditor to accept the performance of the obligation. a. Mora Accipiendi b. Mora Solvendi Ex Re c. Mora Solvendi Ex Persona d. Mora Acciende 18. It is an obligation where the debtor has to perform all the several prestations in the contract to extinguish the obligation. a. Facultative Obligation b. Alternative Obligation c. Conjunctive/Compound Obligation d. None of the above 19. The following are elements of obligation EXCEPT: a. Active Subject b. Passive Subject c. Contract d. Prestation 20. Statement I. Every obligation which contains a resolutory condition shall not be demandable, without prejudice to the effects of the happening of the event. Statement II. Every obligation whose performance does not depend upon a future or uncertain event, unknown to the parties, is demandable at once. a. Statement I is false b. Statement II is false c. Both statements are false d. Both statements are true 21. Statement I. Divisibility refers to the non-susceptibility of an obligation to partial performance. Statement II. If a thing could be divided into parts and as divided, its value is impaired disproportionately, that thing is divisible. a. Statement I is false b. Statement II is false c. Both statements are false d. Both statements are true 22. Statement I. Payment involves delivery of action, while compensation takes place by operation of law without simultaneous delivery. Statement II. In payment, there can be partial extinguishment of the obligation; while in compensation, the performance must be complete, unless waived by the creditor. a. Statement I is false b. Statement II is false c. Both statements are false d. Both statements are true 23. Statement I. Fraud has a deliberate intention to cause damage while negligence has no deliberate intention to cause damage. Statement II. Fraud and negligence can be mitigated. a. Statement I is false b. Statement II is false c. Both statements are false d. Both statements are true 24. It takes place when the characters of creditor and debtor are merged in the same person. a. Remission b. Invisibility c. Novation d. Confusion 25. It is a mode of extinguishing the concurrent amount, the obligations of those persons who in their own right are reciprocally debtors and creditors of each other. a. Debt b. Contract c. Reimbursement d. Compensation 26. According to Article 1305, a/an ______ 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. a. condition b. obligation c. contract d. offer 27. The following are the classes of elements of a contract EXCEPT: a. Essential b. Original c. Natural d. Accidental 28. Which of the following statements is NOT true: a. Misrepresentation by a third person does not vitiate consent unless such misrepresentation has created a substantial mistake and the same is mutual. b. A mere expression of an opinion signifies fraud, unless made by an expert and the other party has relied on the former’s special knowledge. c. Misrepresentation made in good faith is not fraudulent but may constitute error. d. Incidental fraud only obliges the person employing it to pay damages. 29. This refers to contracts that are perfected by delivery. a. Real Contracts b. Consensual Contracts c. Formal Contracts d. None of the above 30. Which type of contract is an ‘antichresis’ according to perfection? a. Real Contracts b. Consensual Contracts c. Formal Contracts d. Preparatory Contracts 31. The following contracts are inexistent and void from the beginning EXCEPT one: a. Those whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy b. Those whose cause or object did not exist at the time of the transaction c. Those whose object is outside the commerce of men d. Those where the intention of the parties relative to the principal object of the contract can be ascertained 32. This refers to contracts which have no effect until they are ratified. a. Principal contracts b. Bilateral contracts c. Illegal contracts d. Unenforceable contracts 33. This refers to the action of the creditor to rescind the contract entered into by the debtor to defraud them. a. Accion Pauliana b. Accion Directa c. Accion Sindico d. None of the above 34. In conditional obligations, who would be entitled to the fruits before the happening of the suspensive condition? a. If it’s a bilateral contract, the fruits are deemed mutually compensated. b. If it’s a bilateral contract, the fruits shall pertain to the creditor unless a contrary intention is clear. c. If it’s a unilateral contract, the fruits are deemed mutually compensated. d. If it’s a unilateral contract, the fruits shall pertain to the creditor unless a contrary intention is clear. 35. The following are types of contracts according to cause EXCEPT: a. Onerous b. Aleatory c. Lucrative d. Remuneratory 36. This refers to the damage or injury to the party asking for rescission. a. Attrition b. Lesion c. Incapacitation d. None of the above 37. Voidable contracts are subject to _____ to cure the defect. a. Rescission b. Reformation c. Ratification d. Reconsideration 38. Maria delivered her car to Jose for the latter’s use for two weeks without any compensation. The cause of the contract is? a. The car of Maria b. The delivery of the car c. The period of two weeks d. The generosity of Maria 39. Statement I. The two kinds of quasi-delicts are negotiorum gestio and solutio indebiti. Statement II. Negotiorum gestio means undue payment while solutio indebiti means unauthorized management. a. Statement I is false b. Statement II is false c. Both statements are false d. Both statements are true 40. It arises from damage caused to another through an act or omission, there being no fault or negligence, but no contractual relation exists between the parties. a. Contracts b. Quasi-delicts c. Quasi-contracts d. None of the above 41. What does criminal liability include? a. Restitution b. Reparation of the damaged cause c. Indemnification for consequential damages d. All of the above 42. Statement I. Legal tender means such currency which in a given jurisdiction can be used for the payment of debts, public and private, and which cannot be refused by the creditor. Statement II. A check, whether a manager’s check or an ordinary check is legal tender and an offer of the check in payment of debt is a valid tender of payment. a. Statement I is false b. Statement II is false c. Both statements are false d. Both statements are true 43. It is when a person takes improper advantage of his power over the will of another, depriving the latter of a reasonable freedom of choice. a. Undue Influence b. Intimidation c. Fraud d. Violence 44. Third person may be bound by the contract EXCEPT: a. Contracts that create uncollectibles b. Contracts creating real rights c. Contracts that create status d. Both A and C 45. The following are classifications of contracts according to a degree of dependence EXCEPT: a. Preparatory b. Accessory c. Consensual d. Principal 46. The following are the classification of contracts according to perfection: I. Preparatory IV. Bilateral II. Consensual V. Formal III. Principal VI. Real a. II, IV, VI b. II, III, IV c. II, V, VI d. I, II, III 47. It renders the contract non-existing as if it was never entered into. a. Annulment b. Ratification c. Void d. Inexistent 48. The following contracts are inexistent and void from the beginning EXCEPT: a. Those that are absolutely simulated or fictitious b. Those whose cause or object exists at the time of the transaction c. Those whose object is outside the commerce of men d. Those who contemplate an impossible service 49. Statement I. Whenever the person who is obliged to return the thing cannot do so because it has been lost through his fault, he shall return the fruits received and the value of the thing at the time of loss with interest from the same date. Statement II. When one party does not return what is due to him by virtue of the annulment, he cannot compel the other to comply with what is incumbent upon him. a. Statement I is false b. Statement II is false c. Both statements are false d. Both statements are true 50. Statement I. Voidable contracts are those which are valid until they have been annulled by proper action in court. Statement II. The prescriptive period to annul a voidable contract shall be two years. a. Statement I is false b. Statement II is false c. Both statements are false d. Both statements are true  ANSWER KEY 1. D 26. C 2. A 27. B 3. D 28. B 4. B 29. A 5. B 30. C 6. C 31. D 7. A 32. D 8. B 33. A 9. C 34. A 10. C 35. B 11. B 36. B 12. A 37. C 13. B 38. D 14. A 39. C 15. A 40. B 16. A 41. D 17. A 42. B 18. C 43. A 19. C 44. A 20. A 45. C 21. C 46. C 22. B 47. A 23. B 48. B 24. D 49. D 25. D 50. B  ANSWER KEY - SOLUTIONS 1. D - The requisites of a valid obligation are the active subject, passive subject, prestation, and legal tie. It does not include the legal party. 2. A - A casual condition requires that the happening of the condition depends upon chance or the will of a third person. The phrase “if it rains tomorrow morning” exemplifies a casual condition, as the occurrence of rain is a matter of chance. 3. D - A condition can be either a (1) future event that is uncertain to happen or a (2) past event that is unknown to parties. Therefore, none of the provided answers were correct. 4. B - According to Article 1232, “Payment means not only the delivery of money but also the performance, in any other manner, of an obligation”. 5. B - According to Article 1305, a 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. 6. C - In an obligation to give [a thing], a thing may either be (1) specific/determinate or (2) generic/indeterminate. A generic thing is a thing designated only by its class. 7. A - Solutio indebiti and Negotiorum gestio are under quasi-contracts. 8. B - In a ‘dolo incidente’ or ‘incidental fraud’, the fraud is committed in the performance of the obligation pursuant to a contract. This makes the obligor liable for damages. 9. C - A resolutory period marks the end of an existing obligation. In the given example, X's obligation to pay Y Php 5,000.00 monthly was already in effect. However, upon the arrival of December 25, 2025, this obligation ceased to exist as the specified period had concluded. 10. C - The correct statement should be “If the creditor to whom tender of payment has been made refuses without just cause to accept it, the debtor shall be released from responsibility by the consignation of the thing or sum due”. 11. B - It is referred to as legal loss when a thing goes out of commerce. 12. A - Passive solidarity refers to solidarity among debtors, whereas active solidarity pertains to solidarity among creditors. 13. B - A contract gives rise to an obligation but an obligation does not always need to have a contract. 14. A - There is no civil liability when the acquittal is due to reasonable doubt. 15. A - Real obligation is the obligation to give while personal obligation is the obligation to do or not to do. 16. A - Rescission is a resolution or cancellation of the contract. 17. A - Mora accipiendi is a delay on the part of the creditor to accept the performance of the obligation. 18. C - Conjunctive/compound obligation is an obligation where the debtor has to perform all the several prestations in the contract to extinguish the obligation. 19. C - The elements of obligation are active subject, passive subject, prestation, and juridical tie. 20. A - Every obligation that contains a resolutory condition shall also be demandable, without prejudice to the effects of the happening of the event. 21. C - Indisibility refers to the non-susceptibility of an obligation to partial performance. If a thing could be divided into parts and as divided, its value is impaired disproportionately, that thing is indivisible. 22. B - In compensation, there can be partial extinguishment of the obligation; in payment, the performance must be complete, unless waived by the creditor. 23. D - Fraud cannot be mitigated. 24. D - Confusion takes place when the characters of creditor and debtor are merged in the same person. 25. D - Compensation is a mode of extinguishing to the concurrent amount, the obligations of those persons who in their own right are reciprocally debtors and creditors of each other. 26. C - According to Article 1305, a 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. 27. B - The classes of elements of a contract are essential, natural, and accidental. Original is not included. 28. B - The correct statement is “A mere expression of an opinion does not signify fraud, unless made by an expert and the other party has relied on the former’s special knowledge”. 29. A - Real contracts refers to contracts which are perfected by delivery. These include deposits, pledges, commodatum, and loans. 30. C - Antichresis is a formal contract, requiring a specific form for validity. 31. D - An example of contracts that are inexistent and void from the beginning is where the intention of the parties relative to the principal object of the contract cannot be ascertained. Therefore, the last statement is wrong. 32. D - Unenforceable contracts are those which have no effect until they are ratified. 33. A - Accion Pauliana refers to the action of the creditor to rescind the contract entered into by the debtor to defraud them. 34. A - In conditional obligations, the party that would be entitled to the fruits before the happening of the suspensive condition depends on the classification of the contract. If it’s a bilateral contract, the fruits are deemed mutually compensated. If it’s a unilateral contract, the fruits shall pertain to the debtor unless a contrary intention is clear. 35. B - The three types of contracts according to cause are onerous, gratuitous or lucrative, and remuneratory. Aleatory is a type of contract according to risk. 36. B - Lesion refers to the damage or injury to the party asking for rescission 37. C - Voidable contracts are subject to ratification to cure the defect. 38. D - In the scenario, Maria is lending her car to Jose without expecting any compensation. This act of generosity is the driving force behind the contract. It's the reason why Maria is willing to part with her car for two weeks. 39. C - The two kinds of quasi-contracts are negotiorum gestio and solutio indebiti. Negotiorum gestio means unauthorized management while solutio indebiti means undue payment. 40. B - Quasi-delicts or torts arise from damage caused to another through an act or omission, there being no fault or negligence, but no contractual relation exists between the parties. 41. D - Criminal liability includes restitution, reparation of the damaged cause, and indemnification for consequential damages. 42. B - A check, whether a manager’s check or an ordinary check is not legal tender and an offer of the check in payment of debt is not a valid tender of payment. 43. A - Undue influence is when a person takes improper advantage of his power over the will of another, depriving the latter of a reasonable freedom of choice. 44. A - Third person may be bound by the contracts creating real rights, contracts that create a status, and collective contracts. 45. C - Consensual is a classification of contract according to perfection. 46. C - The classification of contracts according to perfection are consensual, real, and formal. 47. A - Annulment renders the contract non-existing as if it was never entered into. 48. B - Those contracts whose cause or object did not exist at the time of the transaction are inexistent and void from the beginning. 49. D - If a party fails to return a thing due to their fault, they must compensate for the fruits received, its value, and interest. Additionally, a party cannot enforce their rights under an annulled contract without returning what they owe. 50. B - The prescriptive period to annul a voidable contract shall be four years.