1.
Arlene owns a row of apartment houses in
Kamuning, Quezon City. She agreed to lease
Apartment No. 1 to Janet for a period of 18
months at the rate of P10,000 per month. The
lease was not covered by any contract. Janet
promptly gave Arlene two (2) months deposit
and 18 checks covering the rental payment for
18 months. This show of good faith prompted
Arlene to promise Janet that should Arlene
decide to sell the property, she would give Janet
the right of first refusal. X. (1) Not long after
Janet moved in, she received news that her
application for a Master of Laws scholarship at
King's College in London had been approved.
Since her acceptance of the scholarship entailed
a transfer of residence, Janet asked Arlene to
return the advance rental payments she made.
Arlene refused, prompting Janet to file an action
to recover the payments. Arlene filed a motion to
dismiss, claiming that the lease on which the
action is based, is unenforceable. If you were
the judge, would you grant Arlene's motion?
(1%)
(A) Yes, I will grant the motion because the
lease contract between Arlene and Janet was
not in writing, hence, Janet may not enforce any
right arising from the same contract.
(B) No, I will not grant the motion because to
allow Arlene to retain the advance payments
would amount to unjust enrichment.
(C) Yes, I will grant the motion because the
action for recovery is premature; Janet should
first secure a judicial rescission of the contract of
lease.
(D) No. I will not grant the motion because
the cause of action does not seek to enforce
any right under the contract of lease.
SUGGESTED ANSWER: (D) No. I will not
grant the motion because the cause of action
does not seek to enforce any right under the
contract of lease. Janet is not asking for the
continued use of the leased premises.
Moreover, the contract is aside the ambit of
the Statute of Frauds as the same has
already been partially performed.
2. Assume that Janet decided not to accept the
scholarship and continued leasing Apartment
No. 1. Midway throughthe lease period, Arlene
decided to sell Apartment No. 1 to Jun in breach
of her promise to Janet to grant her the right of
first refusal. Thus, Janet filed an action seeking
the recognition of her right of first refusal, the
payment of damages for the violation of this
right, and the rescission of the sale between
Arlene and Jun. Is Janet's action meritorious?
(1%)
A) Yes, under the Civil Code, a promise to buy
and sell a determinate thing is reciprocally
demandable
(B) No, the promise to buy and sell a
determinate thing was not supported by a
consideration.
(C) Yes, Janet's right of first refusal was clearly
violated when the property was not offered for
sale to her before it was sold to Jun.
(D) No, a right of first refusal involves an
interest over real property that must be
embodied in a written contract to be
enforceable.
(E) None of the above.
SUGGESTED ANSWER: (D) No, a right of
first refusal involves an interest over real
property that must be embodied in a written
contract to be enforceable.
The right of first refusal involves a transfer of
interest in the real property. As such, it is
covered by the Statute of Frauds under Art
1403 (2)(e) of the Civil Code. It must be in
writing in order to be enforceable.
3. It is a conduct that may consist of giving, a) All contracts are perfected by mere consent.

doing, or not doing something. b) All contracts are perfected by delivery of the

a) Obligation object.

b) Juridical necessity c) All contracts are required to be in writing.

c) Prestation d) All contracts are required to have a valid

d) Contract consideration.

4. It is a juridical relation arising from lawful, 8.It is a principle which holds that parties are

voluntary and unilateral acts based on the bound not only by what has been expressly

principle that no one should unjustly enrich provided for in the contract but also to the

himself at the expense of another. natural consequences that flow out of such

a) Quasi-contract agreement.

b) Quasi-delict a) Obligatory force of contracts

c) Cotract b) Mutuality of contracts

d) Delict c) Autonomy of contracts

5.A debtor is liable for damages in case of delay d) Relativity of contracts

if he is guilty of any of the following, except: 9.It is a principle which holds that contracts must

a) default (mora) be binding to both parties and its validity and

b) mistake effectivity can never be left to the will of one of

c) negligence (culpa) the parties.

d) breach through contravention of the tenor a) Obligatory force of contracts

thereof b) Mutuality of contracts

6.It is an international evasion of the faithful c) Autonomy of

performance of the obligation. d) Relativity of contracts

a) Negligence 10.It refers to the rule that a contract is binding

b) Fraud not only betweenparties but extends to the heirs,

c) Delay successors in interest, and assignees of the

d) Mistake parties, provided that the contract involved

7.Which of the following statements is correct?

transmissible rights by their nature, or by c) Qualified/conditional acceptance of the offer,

stipulation or by law. which becomes counter-offer.

a) Obligatory force of contracts d) Subject matter becomes illegal/impossible

b) Mutuality of contracts before acceptance is communicated.

c) Autonomy of contracts 14.Which of the following statements is correct?

d) Relativity of contracts a) Offers in interrelated contracts are perfected

11.It is rule which holds that the freedom of the upon consent.

parties to contract includes the freedom to b) Offers in interrelated contracts require a

stipulate, provided the stipulations are not single acceptance.

contrary to law, morals, good customs, public c) Business advertisements are definite offers

order or public policy. that require specific acceptance.

a) Obligatory force of contracts d) Advertisements for Bidders are only

b) Mutuality of contracts invitations to make proposals and the

c) Autonomy of contracts advertiser is not bound to accept the

d) Relativity of contracts highest/lowest bidder, unless it appears

12.The following are the ways by which otherwise.

innominate contracts are regulated, except: 15.The following are solemn contracts

a) By the stipulation of the parties. (Contracts which must appear in writing),

b) By the general principles of quasi- except:

contracts and delicts a) Donations of real estate or of movables if the

c) By the rules governing the most analogous value exceeds P 5,000.00.

nominate contracts. b) Stipulation to pay interest in loans.

d) By the customs of the place. c) Sale of land through an agent (authority must

13. An offer becomes ineffective on any of the be in writing).

following grounds, except: d) Construction contract of a building.

a) Death, civil interdiction, insanity/insolvency of 16.The following are rescissible contracts,

either party before acceptance is conveyed. except:

b) Acceptance of the offer by the offeree.

a) Entered into by guardian whenever ward c) Can be confirmed or ratified.

suffers damage more than of value of d) Can be assailed only by either party.

property. 19.The following are void contracts, except:

b) Agreed upon in representation of absentees, a) Pactum commissorium

if absentee suffers lesion by more than of b) Pactum de non alienando

value of property. c) Pactum leonina

c) Contracts where fraud is committed on d) Pacto de retro

creditor (accion pauliana). 20.If one of the parties to the contract is without

d) Contracts entered into by minors. juridical capacity, the contract is:

17.The following are the requisites before a a) voidable

contract entered into in fraud of creditors may be b) rescissible

rescinded, except: c) void

a) There must be credited existing prior to the d) unenforceable

celebration of the contract. 21.When both parties to the contract are minors,

b) There must be fraud, or at least, the intent to the contract is:

commit fraud to the prejudice of the creditor a) voidable

seeking rescission. b) rescissible

c) The creditor cannot in any legal manner c) void

collect his credit (subsidiary character of d) unenforceable

rescission) 22.When the consent of one of the parties was

d) The object of the contract must be legally vitiated, the contract is:

in the possession of a 3rd person in good a) voidable

faith. b) rescissible

18.The following are the characteristics of a c) void

voidable contract, except: d) unenforceable

a) Effective until set aside. 23. An obligation which is based on equity and
natural law is known as: a) pure
b) May be assailed/attacked only in an action for b) quasi-contract
c) civil
that purpose. d) natural
24. Consent was given by one in representation
of another but without authority. The contract is:
a) voidable b) rescissible c) void d)
unenforceable
25.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.
26.Which of the following contracts is void?
a) An oral sale of a parcel of land.
b) A sale of land by an agent in a public
instrument where his authority from the
principal is oral. (Art.1384)
c) A donation of a wrist watch worth P 4,500.00.
d) A relatively simulated contract
27.Which of the following expresses a correct
principle of law? Choose the best answer. a)
Failure to disclose facts when there is a duty to
reveal them, does not constitute fraud.
b) Violence or intimidation does not render a
contract annullable if employed not by a
contracting party but by a third person.
c) A threat to enforce ones claim through
competent authority, if the claim is legal or just,
does not vitiate consent.
d) Absolute simulation of a contract always
results in a void contract.
28. 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.
29. Which of the following statements is wrong?
a) Creditors are protected in cases of contracts
intended to defraud them.
b) Contracts take effect only between the parties,
their assign and heirs, except in case where the
rights and obligations arising from the contract are
not transmissible by their nature, or by stipulation or
by provision of law.
c) If a contract should contain some stipulation in
favor of a third person, he may demand its
fulfillment provided he communicated his
acceptance to the obligor before its revocation.
d) In contracts creating real rights, third persons
who come into possession of the object of the
contract are not bound thereby.
30. A contract granting a privilege to a person, for
which he has paid a consideration, which gives him
the right to buy certain merchandise or specified
property, from another person, at anytime within
the agreed period, at a fixed price. What contract is
being referred to? a) Option Contract b) Contract to
Sell c) Contract of Sale d) Lease
31.Which of the following contracts of sale is void?
a) Sale of EGMs car by KRP, EGMs agent, whose
authority is not reduced into writing.
b) Sale of EGMs piece of land by KRP, EGMs agent,
whose authority is not reduced into writing.
c) Sale of EGMs car by KRP, a person stranger to
EGM, without EGMs consent or authority.
d) Sale of EGMs piece of land by KRP, a person
stranger to EGM, without EGMs consent or
authority.
32.Upon the proposal of a third person, a new
debtor substituted the original debtor without the
latters consent. The creditor accepted the
substitution. Later, however, the new debtor
became insolvent and defaulted in his obligation.
What is the effect of the new debtors default upon
the original debtor? (A) The original debtor is freed
of liability since novation took place and this
relieved him of his obligation. (B) The original
debtor shall pay or perform the obligation with
recourse to the new debtor. (C) The original debtor
remains liable since he gave no consent to the
substitution. (D) The original debtor shall pay or
perform 50% of the obligation to avoid unjust
enrichment on his part.
33.Lennie bought a business class ticket
from Alta Airlines. As she checked in, the
manager downgraded her to economy on
the ground that a Congressman had to be
accommodated in the business class.
Lennie suffered the discomfort and
embarrassment of the downgrade. She sued
the airlines for quasi-delict but Alta Airlines
countered that, since her travel was
governed by a contract between them, no
quasi-delict could arise. Is the airline
correct?
(A) No, the breach of contract may in
fact be tortious as when it is tainted as
in this case with arbitrariness, gross bad
faith, and malice.
(B) No, denying Lennie the comfort and
amenities of the business class as provided
in the ticket is a tortious act.
(C) Yes, since the facts show a breach of
contract, not a quasi-delict.
(D) Yes, since quasi-delict presupposes the
absence of a pre-existing contractual
relation between the parties.
34. bilateral contracts are vitiated with
vices of consent, they are rendered (A)
rescissible. (B) void. (C) unenforceable. (D)
voidable.
35. Contracts take effect only between the
parties or their assigns and heirs, except
where the rights and obligations arising
from the contract are not transmissible by
their nature, by stipulation, or by provision
of law. In the latter case, the assigns or the
heirs are not bound by the contracts. This
is known as the principle of
(A) Relativity of contracts.
(B) Freedom to stipulate.
(C) Mutuality of contracts.
(D) Obligatory force of contracts.

36.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.