Manuel Luis Quezon University

Integrated Review in Business Law (IR 4)

Preliminary Examinations

Name:_______________________________________ Date:11 August 2017

Student No: ______________________

Directions: For the Multiple Choice Questions (MCQ) part, choose the best answer by
encircling the BEST answer among the choices. Erasures should be signed on the
number/portion where the erasures were committed. For the Essay part, you may
answer on the space provided. If necessary, you may use the back page of the
questionnaire for your answer. Questions which require a yes or no response should be
accompanied with sufficient legal basis to merit a point. Best of luck

I. Multiple Choice (15 items. 30 points):

1. Which among the following is NOT a source of obligation?

A. Law C. Quasi-contracts
B. Customs D. Crime

2. This type of constructive delivery refers to the case when a former owner becomes
the lessee of the same property.
A. Brevi Manu C. Longa manu
B. Constitutum Possessorium D. Symbolica

3. This mode of extinguishing an obligation refers to the change in prestation to be

delivered.
A. Novation C. Tender of Payment
B. Subrogation D. Cession

4. This concept refers to the automatic appropriation of the things which serve as
security of mortgages.
A. Mora solvendi C. Solutio Indebti
B. Dacion en pago D. Pactum Commissorium
5. A person who breaches his obligation voluntarily is guilty of _______________.
A. Fraud C. Negligence
B. Culpa D. Mora

6. A and B were declared by court to be joint and severally liable for the crime they
committed against C. If A and B benefited from the proceeds of the evil act in ratio of
2:3 respectively, how much can C recover should he choose to claim for damages
against A?
A. P20,000 C. P50,000
B. P30,000 D. None. He should recover from B

7. The sale of As calf to be (As cow is pregnant) is considered _________________

A. Emptio spei, because the calfs delivery and that the same will be alive is a mere
expectancy.
B. Emptio rei speratae, because it involves the sale of future goods.
C. Void, because the sale of cattle requires that it should be in writing and thus the said
sale violates the Statutes of Fraud.
D. Void, because there is still no object of the contract which is an element of a
contract.

8. A is obliged to facultatively deliver any of the following goods to B,

Good X - A lost this good due to an armed robbery in 2013
Good Y - Due to As failure to maintain, Ys engine ran out of oil and malfunctioned
Good Z - Declared illegal in 2015
Good W - Destroyed by a flood in 2017.

Should As obligation to deliver becomes due and demandable in 2018, what will be the
status of As obligation?

A. Extinguished
B. Rescinded, A has to return the payments made by B
C. A to pay damages
D. A is to deliver an amount of money equivalent to the cause of any good of his choice.

9. Which among the following contracts is rescissible?

A. Sale of a parent of his minor childs car for P800,000 despite its resale value assessed
at P1,000,000.
B. Contract signed by X while on a drinking session.
C. An agreement to deal and manufacture non-medical fentanyl, an addictive substance
D. None of these.

10. Which among the following provisions is NOT for the benefit of an insolvent buyer
under the Maceda Law?
A. Grace period of 60 days per year of payment
B. Cash surrender value with floor value of 50% and increment of 5% per year in excess
of 5 years of installment paid.
C. The right to exercise the option of a cash surrender value after 5 years.
D. Right to retain in the property as lessee instead of surrender of the Cash surrender
value.

11. Which among the following is NOT an obligation of the vendor?

A. To provide warranties against eviction.
B. To provide grace period to the buyer in cases of default in payment.
C. To allow the buyer to inspect fully the object of sale before its purchase.
D. To deliver the good in perfect condition.

12. Which among the following remedies can be availed by the debtor when the
creditor delays of does not accept the goods or subject of their contract?
A. Tender of payment and consignation
B. Deed of assignment
C. Accion subrogatoria
D. Accion pauliana

13. A sells to B a condominium unit in 2013. In the same year, B registers the property
into his name. C, the real owner of the condo had issued an authorization to A, for the
latter to be able to sell the said property. However, the said authorization was revoked
as early as 2012. C then sells his property to D in 2014. Who is the rightful owner of the
condominium?
A. B, because according to the rules on Double Sale, the first to register shall be deemed
the rightful owner of a real property.
B. D, because the revocation of As authority makes the sale to B a void sale.
C. B, because by the time of registration, B is an innocent purchaser for value of a buyer
and registrant in good faith.
D. C, because of the irregularities of the sale with both B and C, the ownership to the
property reverts back to C.

14. ________________________ translates to a person who does not own the thing
cannot sell the same.
A. Nemo dat quod non habet
B. Res perit domino
C. Salus populi est suprema lex
D. Ignoratiam legis non excusat

15. A paid B a certain amount, after which A was given the sole choice to buy the
property to buy Bs property within a period of two years. The said payment of A was
part of what kind of contract?
A. Option contract C. Conditional Contract of Sale
B. Reservation Contract D. Contract to Sell

Essay (20 points):

1. ABC Corporation entered in an agreement with XYZ Trading for the sale of Milagrosa
Rice. Weeks before the harvest season, XYZs farm was plagued by a pest which stunted
the growth of their crops, thus harvesting 3000 sacks of Milagrosa instead of 6000 sacks.

(a) Will it be proper if XYZ replaces the remaining 3000 sacks with Wagwag Rice to
compensate for the lost 3000 sacks of Milagrosa? -- 3pts
(b) Will XYZ be liable for violation of express warranty, because XYZ has been in the
business of selling rice for the past 20 years? -- 4pts
(c) What is the remedy of ABC should XYZ fail to deliver the remaining 3000 sacks of
rice? --3pts
2. Differentiate a contract of sale from a contract to sell -- 3pts
3. Mr. Dela Cruz entered into a contract in 2015 with Mr. Chua, entitle Deed of
Absolute Sale with a pacto de retro provision that Mr. Dela Cruz may buy back the
property within a two year period. In 2018, the Chuas, claiming that the Dela Cruz were
not able to buy back the said property within the allowed period seeks to evicted the
Dela Cruz, who were still residing in the property and paying for the real estate taxes
from 2015 up to 2018 despite the said sale. In their defense, aside from their acts of
possession, the Dela Cruz claim that they were paid less than half of the assessed value
of the property and that the money given by the Chuas were only for a loan by their
father, with their property as security. If you were the judge, who shall be deemed
owner of the property? -- 7pts
BONUS: Write a law/business law related joke --2pt.

- END OF EXAM -

The life of the law has not been logic but experience-- Justice Oliver
Wendell Holmes, Jr., (1881)

PRELIMINARY EXAMINATION

ADB/JDR/IR4_PE

2017