LAW1101 Reviewer Final Departmental Exam PDF

## LEM 1 (Obligations and Contracts) **INSTRUCTIONS:** CORRESPONDING DEDUCTION SHALL BE AWARDED FOR FAILURE TO FOLLOW INSTRUCTIONS. * The examination is good for one (1) hour only. Please write legibly your name, student number, subject code and section in the answer sheet. * Please shade using Bl...

## LEM 1 (Obligations and Contracts) **INSTRUCTIONS:** CORRESPONDING DEDUCTION SHALL BE AWARDED FOR FAILURE TO FOLLOW INSTRUCTIONS. * The examination is good for one (1) hour only. Please write legibly your name, student number, subject code and section in the answer sheet. * Please shade using Black ballpen in choosing the correct answer in the answer sheet. Make sure that you write your correct subject code and section in the answer sheet. Strictly no erasure allowed. Failure to follow instructions shall be given corresponding deductions. * Strictly no cheating allowed. Anyone caught cheating will be meted the corresponding penalty of not continuing to take the examination. * The use of calculators of any kind is prohibited during the examination. * Do not forget to sign in the proctor/attendance sheet. * Make sure that you submit your answer sheet to the proctor-in-charge. You may keep the questionnaire. **Multiple Choice:** 1. The effects of a conditional obligation to give, once the condition has been fulfilled, shall retroact to the day of the constitution of the obligation. In obligations to do and not to do, who shall determine, in each case, the retroactive effect of the condition that has been complied with? * Creditor * Debtor * Stranger * Court 2. Juan borrowed Php 10,000.00 from Pedro. He then executed a promissory note undertaking to pay the said amount on or before September 30, 2004. If Juan failed to pay his obligation on the date afore-stated, can he be considered in default of his obligation? * Yes, because having executed a promissory note payable on a specific date, he should pay his obligation when the said date comes. * No, because in order that Juan can be considered in default of his obligation, there must be demand. * No, because the arrival of the period extinguishes the obligation. * None of the above. 3. Suppose in problem number 2, Juan obligated himself to pay Pedro on or before September 30, 2004, without need of demand, can he be considered in default if Juan will not pay his indebtedness on said date? * Yes, because demand is not necessary for him to be considered in default considering that the contract specifies that demand is not needed. * No, because demand is still needed. * No, the waiver his is invalid. * None of the above. 4. A jeepney carrying passengers turned turtle because one of the tires blew out. One passenger died and several others were injured. The owner of the jeepney was then sued by the heirs of the deceased and the injured passengers for damages. In defense, the owner interposed the defense of fortuitous event to negate liability. * The owner cannot be held liable for the accident was due to a fortuitous event. As a rule, one cannot be held liable for an event which cannot be foreseen or which though foreseen is inevitable. * The owner can be held liable for the tire blow out could have been prevented had he exercised the proper diligence and inspected the tires before going to the streets to pick up passengers. * The owner cannot be held liable, as it is the fault of the passengers to have chosen his jeepney as their means of transportation. * None of the above. 5. Statement 1: Obligation is the juridical necessity to give, to do or not to do. Statement 2: Every person obliged to give something is likewise obliged to take care of it with the proper diligence of a good father of the family unless the law or, the stipulation of the parties require another standard of care. * Statement 1 is correct, while statement 2 is incorrect. * Statement 1 is incorrect while Statement 2 is correct. * Both statements are correct. * Both statements are incorrect. 6. Juan, Pedro, and Carlos borrowed Php 15,000.00 from Maria obligating to pay the same on or before September 30, 2004. When the date specified in their undertaking comes, can Maria collect the entire amount from Carlos? * Yes, because the three of them are considered solidary debtors, hence Maria can collect the entire amount from anyone of them. * No, because solidarity cannot be presumed hence Maria can only collect from Carlos his share in the indebtedness. * No, only with Juan as the first person mentioned is always the one who is liable on the entire obligation. * None of the above. 7. X and Y entered into a contract of sale whereby X agreed to sell his car to Y for Php 150,000.00. On the date agreed upon, X delivered his car to Y and Y gave him a check for the said amount. Is the obligation of Y extinguished by the issuance of the said check to X? * Yes, because a check is a negotiable instrument which is used as a substitute for money. * No, because the delivery of a check or other mercantile documents shall produce the effect of payment only when they have been cashed. * Yes, because in a reciprocal obligation, the obligation is extinguished if both parties had complied with their respective obligations. * None of the above. 8. Suppose in problem no. 7, X presented the check for payment two years after the same had been issued by Y and was dishonored when presented, can Y be considered as having paid his obligation already? * Yes, because the check was impaired without any fault on the part of Y. * No, because the check has not yet been converted into cash thus, Y's obligation subsists. * No, because the instrument evidencing the obligation is still in the hands of X. * None of the above. 9. X promised to deliver to Y a BMW car with plate number ABC 888 provided he passes the bar examination. One night, the said car was carnapped and despite diligent efforts to locate the same, it can no longer be found. If Y passes the bar, can he compel X to deliver the car to him? * Yes, because by passing the bar examination, he fulfilled the condition attached to the agreement entered into between him and X. * No, because X promised to deliver a determinate thing. Under the law, an obligation to deliver a determinate thing shall be extinguished if it should be lost or destroyed without the fault of the debtor. * Yes, because X undertook an obligation to give and whatever it takes he must deliver the same. * None of the above. 10. In problem no. 9, if X promised to deliver a car to Y if he passes the bar exams which he in fact did, is X's obligation extinguished? * Yes, because the lost was due to a fortuitous event. * No, because X in this case promised to deliver a generic thing. * Yes, because X undertook an obligation to give and whatever it takes he must deliver the same. * None of the above. 11. In problem no. 9, assuming that X promised to deliver the said car to Y immediately after passing the bar without need of demand. If the car is lost after the name of Y was published as having passed the bar examination, will your answer be the same as in no. 9? * Yes, because the obligation concerned the delivery of a determinate thing which under the law is automatically extinguished if the same is lost or destroyed without the fault of the debtor. * No, because when the thing was lost, X was already in delay. * Yes, because the subject is a determinate thing, and waiver of demand is prohibited under the law. * None of the above. 12. Juan and Pedro are both elected public officials. Prior to their election as mayor and vice-mayor of their municipality, they agreed that one year after his election as mayor, Juan would resign his post to allow Pedro to assume the position. In exchange, Pedro gave Juan Php 1,000,000.00. Their agreement was contained in a contract duly signed by then. Is this contract binding between the parties? * Yes, because there was meeting of the minds between the parties and the agreement subsequently entered into becomes the law between the parties. * No, because the condition provided for under the contract is contrary to law and public policy it being a public office which is not a property and cannot be the subject matter of a contract. * No, because the people who voted for them should ratify their agreement. * None of the above. 13. X owes Y the amount of Php 10,000.00. Without the knowledge and consent of X, Y entered into an agreement with Z whereby the latter assumed X's obligation. When the time for payment comes, Z turned out to be insolvent. What is the effect of Z's insolvency in relation to X’s obligation? * X's obligation to Y is extinguished and the insolvency of Z will not revive his obligation. * X’s obligation to Y continues since Z’s inability to pay revived his obligation. * X’s insolvency will not affect the obligation because the subject is a generic thing. * None of the above. 14. Suppose in problem 13, it was X who proposed Z to Y who turned out to be insolvent and this fact is known to X at the time he made the proposal to Y, will X’s obligation to Y be revived by Z's insolvency? * Yes, because by concealing the said fact from Y, X was in bad faith. * No, because when Z was proposed by X to substitute him in his obligation to Y and the latter accepted him, the original contract between X and Y was extinguished. * Yes, because the subject is a generic thing. * None of the above. 15. In problem no. 13, what occurs to extinguish the obligation of X to Y? * Novation * Compensation * Condonation * Consignation 16. In problem no. 13, suppose in exchange for the indebtedness of X to Y, he issued a promissory note to Y as evidence of his debt. One morning, Y went to the house of X and delivered to him the promissory note he issued and left without saying anything. What is the effect of such delivery? * It extinguishes the obligation of X to Y because by delivering the document evidencing his indebtedness, Y is deemed to have renounced any action which he may have against X. * The obligation of X subsists because there is no evidence that Y is renouncing his rights against X. * The obligation still subsists for the same to be valid Y must expressly state that he will no longer collect from the obligation. * None of the above. 17. In problem 16, what occurs? * Novation * Compensation * Remission or Condonation * Consignation 18. X owns a house and lot in Makati. He sent a letter to Y and offered to sell it to Y for Php 1.5 million. Y agreed to buy the same and immediately sent a letter signifying his conformity to X's offer two days thereafter. However, when the letter of acceptance of Y reached the residence of X, the latter is already dead. Was there meeting of the minds? * Yes, because the contract is perfected the moment there is meeting of the minds between X and Y. * None because acceptance made by letter does not bind X except from the time it came to his knowledge. Considering that he's already dead, he could have not known the said acceptance. * Yes, because the letter was sent before X's death. * None of the above. 19. X and Y entered into a contract of sale over a parcel of land. X, the owner-seller of the land, reserved the right to rescind the contract in case Y will not comply with his obligation. Y failed to comply and instead of rescinding the contract, X gave him a series of extension to comply with his prestation. Fed up with Y's failure to comply with his obligation, X filed and action to have the contract rescinded. Can he validly do it? * Yes, because the power to rescind is implied in reciprocal obligation. * No. Although the power to rescind is recognized the same can also be waived. Considering that X already gave Y a series of extension to comply with what is incumbent upon him, the same can be considered a waiver of the contractual provision allowing automatic rescission. * Both of them must comply with their obligation whether they like it or not considering this is a reciprocal obligation. * None of the above. 20. A'is the owner of a house which is being verbally leased to B for five years. A orally promised B that the lease will be renewed only to refuse it later. Can B go to court and enforce his right to renew his contract with A after the expiration of the same? * Yes, because when A promised him that his contract will be renewed and the offer was accepted by him, a perfected contract was entered into between them. * No, because an oral assurance is not enforceable since an agreement for the leasing of a property for more than one year is unenforceable by action unless the same is in writing and subscribed by the party charged or by his agent. * Yes, because the contract is a voidable contract. The same is valid and effective until the same is declared by the court to be invalid. * None of the above. 21. A, 16 years old was impregnated by B 17 years old. As a result of the same, their parents decided to have the two married in August 1985. We all know that marriage is a special contract entered into between a man and woman for the purpose of establishing conjugal and family life. In this case, what is the status of the marriage of A and B from the point of view of the classification of contracts? * It is a valid and effectual considering that the marriage took place before the enactment of, the Family Code. * It is void for both parties are under age. * It is voidable and can be ratified the moment the parties reached majority age. * None of the above. 22. X entered into a contract for the purchase of 2 lots from Y. Each lot costs Php 150,000.00. X already paid Php 90,000.00 each for each lot when his employment was terminated on account of redundancy. X then failed to pay for the balance. Due to this, Y filed an action for rescission of both contracts contending that there was breach of X's obligation. Will the action prosper? * Yes, because the power to rescind is implied in reciprocal obligation. * No, because rescission of contracts will result in unfairness. The total amount paid is sufficient to pay for the price of one lot hence it will be unfair to rescind both. * Yes, for the parties to have complied with their obligation they should entirely perform that what is incumbent from them. * None of the above. 23. X contracted a loan with Y where the latter grants him a certain period within which to pay his obligation. As a security for such payment, X promised to deliver his car to Y within 3 days from the execution of the contract. However, he reneged on his promise. Can he still make use of the period granted to him? * Yes, since the use of the period was voluntarily given by Y, he can not unilaterally withdraw it. * No more because X lost his right to make use of the period when he did not deliver his car as promised to Y. * Yes, because the contract of loan and the obligation to deliver the car are entirely separate obligations. * None of the above. 24. X, Y and Z bound themselves solidarily to pay A the amount of Php 15,000.00. Twelve years after the obligation became due and demandable, X paid A and later on asked for reimbursement of Y's and Z's shares. Is X correct? * Yes, because having paid A, he acquires the right to be reimbursed by Y and Z. * No, because the obligation has already expired. * No, because each should pay only their corresponding share in a solidary obligation. * None of the above. 25. In problem 24, suppose X did not pay and when the obligation becomes due and demandable, A sued X for payment of the entire amount without including Y and Z. Y moved to dismiss on the ground that Y and Z should likewise be sued by A for payment. Is the contention of A tenable? * Yes, because the debts should be divided three ways and A can not collect from him the entire amount of Php 15,000.00. * No, because being solidary debtors, A can proceed against anyone of them or all of them simultaneously. * No, because by collecting from him and not from Y and Z, A had already impliedly condoned the obligations of Y and Z. * None of the above. 26. X is indebted to Y in the amount of Php 10,000.00. Under their agreement, X will only pay Y Php 5,000.00. Without X’s consent, Z paid Y the entire amount of Php 10,000.00. How much can Z recover from X? * Z can recover from X the entire amount paid by him to Y. * Z can recover from X only Php 5,000.00 since payment was made without X’s consent, Z can only recover the amount by which X was benefited by his payment. * Z cannot recover anything considering the fact that his payment of X’s obligation is without the consent of the later. * None of the above. 27. Which of the following is not a rule in application of payment? * The debtor shall indicate the debt to which payment must be applied after making payment. * The creditor may make the designation by specifying in the receipt which debt is being paid if debtor does not apply payment. * If no application has been made, or the application is not valid, the debt, which is most onerous to the debtor among those due, shall be deemed to have been satisfied. * If debts due are of the same nature and burden, the payment shall be applied to all of them proportionately. 28. A delivered a diamond ring to B for the latter to sell on commission basis. B failed to sell it and could not return it either. She offered to return a solitaire ring but A refused to accept it. A suit was then filed by B to compel A to accept the solitaire ring. Will the suit prosper? * Yes, since it might be possible that the value of the solitaire ring is the same as diamond ring. * No, because it is a rule that a debt shall not be considered paid unless the thing or service in which the obligation consists has been completely delivered or rendered as the case may be. The debtor of a thing cannot compel the creditor to receive a different one although the latter maybe of the same value or more valuable than that which is due. * No, because what A should have done is to have the said ring be consigned in court as consignation extinguishes his obligation. * None of the above. 29. X and Y entered into a contract whereby Y’s services were engaged for the purpose of constructing a building on the lot belonging to X. Z, Y’s friend went to X and told him that Y is well-known for his failure to finish his contracts within the period agreed upon, thus prompting X to cancel his contract with Y and award it to Z. Can Z be held liable for damages? * Yes, because third persons who induce another to violate his contract can be held liable for damages. * No, because X is within his rights to determine the person who will construct the building on his land. * No, because the construction was not yet been started by Y. Thus, he can incur no damages. * None of the above. 30. Statement 1: Things that are outside the commerce of men can be the objects of contracts. Statement 2: Contracts are obligatory in whatever form they may have been entered into, provided all the essential requisites for their validity are present. * Statement 1 is correct, while Statement 2 is incorrect. * Statement 1 is incorrect: while Statement 2 is correct. * Both statements are correct. * Both statements are incorrect. ## LUTINO COCKATIEL (First Semester SY 2006-2007) 1. G was appointed guardian of S, the latter being 16 years old, S sold his parcel of land in writing to B valued at P100,000 for P75,000 suffering lesion by 1/4 the value. What is the status of the contract? * Rescissible * Unenforceable * Enforceable * Voidable 2. A and B are solidary debtors of X and Y, solidary creditors to the amount of P4,000. On the due date X renounced in favor of A the entire obligation. Which of the following is correct? * B shall give A P2,000 * Y can still collect from A or B P2,000 * Y can collect from X P2,000 * All of the above 3. A contract where both parties are incapable of giving consent is: * Unenforceable * Void * Voidable * Rescissible 4. D1, D2 and D3 oblige themselves solidarily to give C a specific car valued at P12,000. On the due date, C demanded delivery but the debtors failed to deliver. The next day, while D1 was still in possession of the car, it got lost due to fortuitous event. The right of C is: * None, obligation is totally extinguished * Proceed against any of the debtors for the value and damages * Proceed against D1 only, because he is the one in possession at the time it was lost. * None of the above 5. If mistake, fraud, inequitable conduct, or accident has prevented a meeting of the minds of the parties to contract, the proper remedy is: * sue for specific performance * annulment of the contract * ratify the contract * reformation of the contract. 6. On July 1, 2004, A signs a promissory note and binds himself to pay X P100,000 plus 15% per annum interest on June 30, 2006. * before June 30, 2006, X can demand payment * if on June 30, 2005 A is paying X, X cannot refuse the payment * because the period is for the benefit of the debtor, A can compel the creditor X to accept payment any date before June 30, 2006 * because the period is for the benefit of the debtor and creditor, X can refuse any tendered payment before June 30, 2006. 7. D is indebted to solidary creditors X, Y and Z for P30,000. Without the knowledge of X and Y, Z remitted or renounced the obligation of D. * the obligation to pay P30,000 is extinguished * the obligation of D is not extinguished * the obligation of D is extinguished to the extent of P20,000 * the obligation of D is extinguished to the extent of P10,000. 8. Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. Which of the following constitutes a definite offer? * an offer made through an agent * business advertisement of things for sale * advertisements for bidders * all of the above 9. S entered into a contract with B by threatening B that if B does not agree to make the contract, S will publish defamatory matter concerning B's wife. * The contract is valid because the defamatory matter to be published does not relate to B, the contracting party. * The contract is voidable because such publication when carried our whether true or not will cause a serious harm to B and his wife. * The contract is unenforceable but B is entitled to damages the moment the publication is made. * Contract is void. 10. On June 1, 2006, S sold to B the former’s horse for P10,000. S promised to deliver on June 25, 2006, while B did not promise when to pay. * B can demand delivery from S anytime after June 1, upon payment of the price of the sale. * S can demand from B payment anytime from June 1, because B’s obligation is not subject to any condition. * S cannot demand payment until he delivers the horse. * Obligation of B to pay is subject to the condition that S will deliver the horse. 11. Lorna, Malou and Norma signed a promissory note to borrow P6,000 from Oscar and Pedro, payable in 6 months’ time with interest of 10% per month. Malou gave in pledge a P10,000 diamond ring as security for the amount borrowed. How much can Pedro collect from Norma? * P3,000 * P6,000 * P1,000 * P2,000 12. If in #11, the diamond ring is returned by agreement to Malou: * Principal obligation is not extinguished at all. * The total principal obligation is extinguished. * Only P2,000 of the obligation is extinguished. * Only P3,000 of the obligation is extinguished. 13. In a contract, as written, D promises to pay C P10,000 on September 15, 1990. The consideration received by D is not stated in the contract. * The contract is valid because the cause is always presumed to exist. * The contract is valid so long as it is in writing. * The contract is void because cause is not essential to contract. * The contract is void because the cause is not stated. 14. Before acceptance is conveyed, an offer becomes ineffective upon the: * death or insanity * civil interdiction * insolvency of either party * all of the above 15. The substitution or change of an obligation of a subsequent one which extinguishes or modifies the first, either by changing the object or principal conditions, or by substituting the person of the debtor, rights subrogating a third person in the rights of the creditor is called: * Commodatum * Compensation * Merger * Novation 16. A and B, both unemancipated minors, entered into a contract for the sale of the latter’s car. When A’s parents learned of the sale, they immediately communicated to B’s parents that they interpose no objection over the sale. B’s parents however did not ratify the contract saying that the car has a sentimental value to them. What is the effect of the ratification of A’s parents to the contract? * The contract is converted into a voidable contract. * No effect whatsoever. The contract remains an unenforceable contract. * The contract became perfectly valid. * The contract is automatically set aside by reason of the refusal of B’s parents to ratify the contract. 17. The stage of “conception” of a contract is: * when the contract is fully executed * when the parties come to an agreement * when negotiations are in progress * when there is a meeting of the parties’ minds 18. In order fraud may make a contract voidable: * It may be incidental but should have been employed by both parties * It should be serious and the parties must be in pari delicto * It should be serious and should not have been employed by both contracting parties * It may be incidental but both parties should not be in pari delicto 19. Which of the following contracts is enforceable even if not executed in writing? * lease of personal property for 2 years * an agreement for the sale of immovables * lease of immovables for a period longer than one year * a representation as to the credit of a third person 20. All, except one, of the following contracts are void. Which is the exception? * sale of animal suffering from contagious disease * contract where the cause is immoral * relatively simulated contract * will pay you P10,000 “if I like” 21. A borrowed from B P50,000. A promised that if he could not pay the amount at maturity, he would just deliver to B his car as substitute. At the maturity of the loan, B was in dire need of car so he demanded from A just to deliver the latter’s car in lieu of the payment of the P50,000. * A is under obligation to deliver the car because it is stipulated that the car may be delivered as substitute of the payment in cash. * B can demand the delivery of the car in lieu of the payment in money because he has the right of choice in facultative obligation like the present obligation. * A may refused to deliver the car if he can pay the obligation in cash anyway the right of cholce exclusively belongs to him, he being the debtor. * A & B. 22. Reluctantly and against her good sense and judgment, R entered into contract for the delivery of 5 tables to C for a price of P15,000. Contract is: * void * voidable * unenforceable * valid 23. What kind of obligation is this: “I will pay you ASAP (as soon as possible).” * Conditional obligation. * Pure obligation. * Obligation with a period. * Facultative obligation. 24. On December 25, 2004, X obtained from Y P20,000 payable on December 25, 2005. As security for his debt, X mortgaged his car in favor of Y. The car, however, was substantially damaged without the fault of on November 25, 2005. * Y can demand the payment of the P20,000 even before the maturity of the loan. * X is not under obligation to pay the P20,000 before December 25, 2005 if he provides a new security equally satisfactory than the damaged car. * Y can disregard the period because under the situation the debtor losses every right to make use of the period. * All of the above. 25. A extended credit to B evidenced by a Promissory Note payable to B or to order. B negotiated the PN to C. From C to D. From D to E. E, in turn, negotiated back the instrument to B. * The negotiation of the PN to B extinguished the obligation through confusion because B is a party to the principal obligation. * The negotiation of the PN to B is not allowed because B is already a previous holder thereof. * The negotiation of the instrument back to B did not extinguish the principal obligation because B is not a principal debtor in the principal obligation. * The negotiation of the PN to B has the effect of extinguishing the principal obligation by means of compensation.