REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS

Law on Obligation, Contract, Accessory Contracts, Sales

1. It refers to a juridical necessity to give, to do or not to do.

a. Obligation
b. Contract
c. Law
d. Delict

2. It refers to the juridical tie or efficient cause the binds the parties to the obligation.
a. Obligee
b. Obligor
c. Prestation
d. Vinculum

3. Which of the following obligations is not enforceable by a court action?

a. Civil obligation
b. Legal obligation
c. Natural obligation
d. Contractual obligation

4. Which of the following is not a source of civil obligation demandable in a court of law?
a. Quasi-delict
b. Delict
c. Morality
d. Quasi-contract

5. It is a source of a civil obligation that refers to a juridical relation which arises from certain lawful,
voluntary and unilateral act, to the end that no one may be unjustly enriched or benefited at the expense
of another.
a. Quasi-delict
b. Quasi-contract
c. Contract
d. Delict

6. It refers to the negligence or fault that is a source of civil obligation wherein a person by act or omission
cause damage to another.
a. Culpa criminal
b. Culpa contractual
c. Culpa aquiliana
d. Culpa legal

7. While trying to pass each other on a narrow bridge, a passenger bus, owned and operated by JAC Liner
Inc. and a private automobile, owned and driven Oscar collided, and two persons, Pia and Trina, were
injured. Pia was a passenger of the bus while Trina was a pedestrian. What is the best source of
obligation if Pia will file a case against JAC Liner Inc.?
a. Contract
b. Quasi-delict
c. Quasi-contract
d. Delict

8. In an obligation to deliver a determinate thing, what degree of diligence shall be exercised by the obligor or
debtor in the preservation of the determinate thing in the absence of applicable legal provision and valid
agreement of the paries?
a. Extraordinary diligence
b. Diligence of a good father of a family
c. Absolute diligence
d. Utmost diligence and care

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9. In what type of obligation of obligation to deliver a thing is loss due to fortuitous event as a mode of
extinguishing the obligation applicable?
a. Obligation to deliver a generic thing
b. Obligation to deliver a specific thing
c. Obligation to deliver an indeterminate thing
d. Obligation to deliver a common thing

10. In an obligation to deliver a determinate thing, when is the creditor entitled to the fruits of the
determinate thing or when does the creditor obtain personal rights over the fruits of the determinate
thing?
a. From the time of the perfection or constitution of the obligation.
b. From the time fruits are delivered either physically or constructively.
c. From the time of From the time the obligation to deliver the determinate thing arises.
d. fulfillment of resolutory condition.

11. What is the proper remedy of the creditor or obligee in the case the debtor or obligor fails to comply
with his obligation to deliver a determinate or specific thing?
a. File an action for specific performance or exact fulfillment of obligation and ask for
damages under Article 1170 for possible breach of obligation.
b. File an action and ask that the obligation be complied with by a third person.
c. File an action for rescission of the obligation plus damages.
d. File Action for annulment of the obligation with damages.

12. In an obligation to do whereby only the debtor or obligor can do the thing, what is the remedy of the creditor or
obligee if the debtor or obligor fails to do the prestation?
a. File an action for specific performance or exact fulfilment with damages.
b. File an action for annulment of obligation with damages.
c. File an action and ask that a third person do the obligation in a proper manner at the expense of debtor
with damages.
d. File an action for indemnification for damages.

13. What is the term for the delay on the part of the debtor?
a. Mora solvendi
b. Mora accipiendi
c. Compensatio morae
d. Mora obligori

14. It refers to a ground for breach of obligation under Article 1170 that refers to to the deliberate and
intentional evasion of the normal fulfillment of obligation.
a. Mora or delay
b. Dolo or fraud (dolo incidente)
c. Culpa or negligence
d. Contravention of the tenor of the obligation

15. They are damages awarded by the court by reason of physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury.
a. Nominal damages
b. Exemplary damages
c. Temperate damages
d. Moral damages

16. It refers to one of the successive rights of unpaid creditor by exercising the rights of his negligent debtor
in order to preserve or recover for the patrimony of the debtor the product of such actions, and then
obtain therefrom the satisfaction of his own credit.
a. Levy by attachment and execution the property of the debtor
b. Accion subrogatoria
c. Accion pauliana
d. Action for damages against third persons who acquired the debtor's property in bad faith

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17. When the debtor binds himself to pay when his “means permit him to do so” or “as soon as possible”
or “as soon as he has the money”, what is the proper classification of the obligation?
a. Obligation with a suspensive condition
b. Due and demandable obligation
c. Obligation in diem or obligation with a resolutory period
d. Obligation ex die or obligation with a suspensive period

18. Which of the following obligations is immediately demandable?

a. Obligation with a suspensive condition
b. Obligation when the debtor's means permit him to do so
c. Obligation in diem or obligation with a resolutory period
d. Obligation ex die or obligation with a suspensive period

19. Which of the following statements about reciprocal obligation is incorrect?

a. The power to ask for judicial rescission on the part of injured party in a reciprocal obligation is
implied in case one of the obligors or debtors should not comply with what is incumbent upon
him.
b. When one of the obligors committed breach in a reciprocal obligation, the injured party may
choose between alternative remedies of fulfilment of obligation with damages or rescission of
obligation with damages.
c. When the injured party elected the remedy of rescission of obligation with damages, he is
absolutely prohibited from asking for exact fulfilment of obligation with damages.
d. When the injured party elected the remedy of exact fulfilment of obligation with damages,
he is absolutely prohibited from asking for rescission of obligation with damages.

20. Whenever an obligation contains a period, to whose benefit is the period presumed to have been
established?
a. Creditor only
b. Debtor only
c. Both creditor and debtor
d. Neither creditor nor debtor

21. The following are the instances wherein the debtor shall lose every right to make use of the period of an
obligation with a period and therefore the obligation with a period becomes due and demandable, except
a. When the debtor attempts to abscond.
b. When after the obligation has been contracted, the debtor becomes insolvent and he does not
give a guaranty or security for the debt
c. When by debtor’s own acts he has impaired or destroyed said guaranties or securities after their
establishment, unless he immediately gives new one equally satisfactory
d. When through a fortuitous event the guaranties or securities after their establishment were
impaired.

22. It is an obligation where the debtor is alternatively bound by different prestations and it is extinguished
by the performance of any of them.
a. Alternative obligation
b. Facultative obligation
c. Conjunctive obligation
d. Indivisible obligation

23. Who has the right of choice in a facultative obligation?

a. Generally creditor, unless it has expressly granted to the debtor
b. Generally debtor, unless it has expressly granted to the creditor
c. Always debtor
d. Always creditor

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24. A, B, C wrote a promissory note which states "We promise to pay P60,000 to D and E." D indorsed back
the promissory note to A. How much obligation is extinguished by confusion or merger?
a. P10,000
b. P20,000
c. P30,000
d. P60,000

25. A, a minor, B and C wrote a promissory note which states "I promise to pay P30,000 to D." How much
may D validly collect from C if becomes insolvent?
a. P30,000
b. P20,000
c. P10,000
d. None

26. A, B and C obliged themselves to deliver a specific car worth P300,000 to D. A and B are willing to
deliver the car but C refused to perform the obligation despite repeated demands from D. What is the
proper legal remedy available to D?
a. File an action for exact fulfilment with damages against C.
b. File an action for exact fulfilment with damages against A, B and C.
c. File an action for monetary amount against A and B for P100,000 each and against C for
P100,000 plus damages.
d. File an action for rescission of obligation plus damages against A, B and C.

27. It is an obligation which has an accessory undertaking to assume greater liability in case of breach.
a. Obligation with a condition
b. Obligation with a penal clause
c. Obligation with a period
d. Obligation with a substitute

28. In which of the following civil obligations is the right to file an action prescribe in four years?
a. Written contract 10
b. Quasi-delict
c. Oral contract 6
d. Quasi-contract 6

29. In the absence of agreement as to the place of payment, where shall payment of an obligation to deliver
a determinate or specific thing be made?
a. Wherever the determinate or specific thing might be at the moment the obligation was
constituted or perfected.
b. Wherever the determinate or specific thing might be at the time it is supposed to be delivered.
c. Domicile of the debtor or obligor
d. Domicile of the creditor or obligee

30. In the absence of agreement as to the place of payment, where shall payment of an obligation to deliver
an indeterminate or generic thing be made?
a. Wherever the indeterminate or generic thing might be at the moment the obligation was
constituted or perfected.
b. Wherever the indeterminate or generic thing might be at the time it is supposed to be delivered.
c. Domicile of the debtor or obligor
d. Domicile of the creditor or obligee

31. What law shall govern the special form of payment of dacion en pago?
a. Financial Rehabilitation and Insolvency Act of 2010
b. Law on Sales
c. Law on Obligation
d. Law on Contract

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32. What is the legal remedy available to the debtor or obligor in case the creditor or obligee is guilty of
mora accipiendi?
a. Application of payment
b. Dacion en pago
c. Consignation
d. Cession

33. In which of the following loss of specific or determinate thing will the obligation of the debtor to deliver
a specific or determinate thing be extinguished?
a. When the debtor is guilty of contributory negligence to the loss.
b. When fortuitous event is the sole, immediate and proximate cause of the loss.
c. When the loss occurs after the debtor has incurred delay.
d. When the obligation to deliver the determinate thing arises from criminal act.

34. What mode of extinguishing obligation is essentially gratuitous and requires the acceptance by the
debtor or obligor?
a. Remission
b. Merger
c. Compensation
d. Novation

35. It is a mode of extinguishing obligation that refers to the meeting in one person of the qualities of
creditor and debtor with respect to the same obligation.
a. Offset
b. Confusion
c. Donation
d. Subrogation

36. A has checking account in BDO Unibank with positive balance of P1,000,000. A borrowed P1,000,000
from the same bank. At the maturity date of the loan payable of A, what mode of extinguishing
obligation is present?
a. Condonation
b. Merger
c. Compensation
d. Delegacion

37. Which obligation may become the subject matter of legal compensation or offset?
a. Obligation of borrower in a contract of loan or mutuum
b. Obligation of bailee in a contract of commodatum
c. Obligation of depositary in a contract of deposit
d. Obligation of convicted person arising from his crime

38. It is a mode of extinguishment of an obligation by the substitution or change of the obligation by a

subsequent one which extinguishes or modifies the first.
a. Novation
b. Merger
c. Compensation
d. Remission

39. It is a type of novation involving a change of original debtor wherein the initiative does not emanate
from the original debtor and may be made even without his knowledge since it consists in a third person
assuming the obligation and it logically requires the consent of third person and the creditor.
a. Expromission (without knowledge)
b. Delegaction
c. Legal subrogation
d. Conventional subrogation

40. The following are the instances of legal subrogation, except

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 a. When a creditor pays another creditor who is preferred, even without the debtor’s knowledge
b. When, even without the knowledge of the debtor, a person interested in the fulfillment of the
obligation pays, without prejudice to the effects of confusion as to the latter’s share
c. When a property insurance pays the insured in case of loss of the thing insured due to the
occurrence of the peril insured
d. When a third person pays the obligation of the debtor and the latter benefited from such
payment

41. This principle of contract prohibits a third person from interfering or contesting a contract it has no legal
interest.
a. Mutuality of contract
b. Autonomy of contract
c. Relativity of contract
d. Obligatory force of contract

42. It refers to a contract perfected by the execution of the formality required by law.
a. Legal contract
b. Solemn/formal contract
c. Real contract (loan/mutuum, deposit, pledge, commodatum)
d. Consensual contract

43. Which of the following contracts is perfected by mere consent?

a. Contract of sale of a piece of land
b. Contract of pledge of shares of stocks
c. Contract of chattel mortgage over motor vehicle
d. Contract of loan of cash with principal amount of P500

44. It refers to a type of contract wherein the cause is the liberality or generosity of the benefactor.
a. Gratuitous contract
b. Onerous contract
c. Commutative contract (almost equivalent values)
d. Remuneratory contract (services)

45. It refers to a type of contract whose fulfilment depends upon chance.

a. Auto contract
b. Contract of adhesion
c. Aleatory contract
d. Preparatory contract

46. Which of the following innominate contract refers to "I give that you may give."?
a. Do ut des
b. Do ut facias
c. Facio ut des
d. Facio ut facias

47. Which of the following contracts must be both in writing and public instrument to be enforceable and
valid?
a. Agreement to pay interest in a contract of loan
b. Contract of sale of a piece of land by the agent in the name of the principal
c. Contract of donation of real property
d. Contract of antichresis

48. What theory is followed in the Civil Code of the Philippines to determine the exact moment of
perfection of contract?
a. Manifestation theory
b. Cognitive theory
c. Reception theory
d. Acknowledgment theory

49. Which of the following statements concerning consent in a contract is incorrect?

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 a. A qualified acceptance constitutes a counter-offer.
b. Business advertisements are mere invitations to make an offer.
c. Advertisements for bidders are simply invitation to make proposals.
d. An offer made through an agent is accepted only from the time the acceptance by the
acceptor is communicated by the agent to his principal.

50. Which of the following objects may become the subject matter of contract of sale?
a. Public land
b. Hereditary right
c. Kidney stone
d. Cocaine

51. What is the status of the contract wherein the consent is wanting and wherein the consent is vitiated,
respectively?
a. Void and voidable, respectively
b. Rescissible and unenforceable, respectively
c. Voidable and rescissible, respectively
d. Valid and void, respectively

52. What is the legal remedy available to the injured party in case one of the contracting parties committed
causal fraud?
a. Action for damages for breach of contract
b. Action for annulment of contract
c. Action for rescission of contract
d. Action for declaration of nullity of void contract

53. What is the legal remedy available to the injured party in case of absolutely simulated contract?
a. Action for damages for breach of contract
b. Action for reformation of instrument
c. Action for rescission of contract
d. Action for declaration of nullity of contract

54. When, there having been a meeting of minds of the parties to the contract, their true intention is not
expressed in the document purporting to embody the agreement, by reason of mistake, fraud, inequitable
conduct or accident, what is the remedy of one of the parties?
a. Action for damages for breach of contract
b. Action for reformation of instrument
c. Action for rescission of contract
d. Action for declaration of nullity of contract

55. Which of the following documents or deeds may become the subject matter of action for reformation of
instrument?
a. Simple donation inter vivos wherein no condition is imposed
b. Last will and testament whether holographic will or notarial will
c. When the real agreement is void
d. Deed of pacto retro sale intended as equitable mortgage

56. How shall doubts referring to incidental circumstances of onerous contract be interpreted by the court?
a. The doubts shall be settled in favor of the greatest reciprocity of interest.
b. The greatest transmission of rights and interest shall prevail.
c. The least transmission of rights and interest shall prevail.
d. The contract is null and void.

57. How shall doubts referring to incidental circumstances of gratuitous contract be interpreted by the court?
a. The doubts shall be settled in favor of the greatest reciprocity of interest.
b. The greatest transmission of rights and interest shall prevail.
c. The least transmission of rights and interest shall prevail.
d. The contract is null and void.

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58. If the doubts are cast upon the principal object of the contract in such a way that it cannot be known what may
have been the intention or will of the parties, what shall be the status of the contract?
a. Rescissible
b. Voidable
c. Void
d. Unenforceable

59. G, the guardian of M, a minor, leased a real property of M for three months at a monthly rent of P1,000
when the prevailing monthly rent is P1,500. What is the status of the contract of lease?
a. Rescissible
b. Voidable
c. Unenforceable
d. Void

60. D is a judgment debtor in a civil action filed by C. The trial court issued a writ of attachment upon the
motion of C. D's bank deposit became the subject matter of garnishment. Afterwards, D sold in writing
his specific car to B. What is the status of contract of sale of car?
a. Rescissible
b. Voidable
c. Unenforceable
d. Void

61. D, a demented person, and I, an insane person, entered into a written contract of sale of specific
cellphone during the lucid interval of the latter. What is the status of contract of sale of cellphone?
a. Rescissible
b. Voidable
c. Unenforceable
d. Void

62. H and W are legally married and are covered by property regime of complete separation of property.
After the marriage, H pointed a gun to W to compel the latter to sell her farm lot in writing. This
prompted W to sign the deed of sale of the farm lot which H unilaterally prepared. What is the status of
contract of sale of farm lot?
a. Rescissible
b. Voidable
c. Unenforceable
d. Void

63. P authorized A to sell his land. However, A leased out in writing the said land to T in the name of P.
What is the status of the contract of lease?
a. Rescissible
b. Voidable
c. Unenforceable
d. Void

64. B orally borrowed P1,000 from P. In order to secure the fulfilment of the loan, G orally guaranteed the
payment of B's loan to P What is the status of the contract of guaranty?
a. Rescissible
b. Voidable
c. Unenforceable
d. Void

65. B and S orally entered into a contract of sale of specific cellphone at a price of P500 with delivery of
cellphone to be made after two years from the date of oral agreement. At the time of perfection of
contract of sale, B paid P100 arras money to S with the balance to be made at the date of delivery of
cellphone. What is the status of the contract of sale of cellphone?
a. Valid and binding
b. Voidable
c. Unenforceable
d. Void

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66. Which of the following contracts is not covered by statute of fraud?
a. Executory contract of sale of house at a selling price of P400
b. Executory contract of lease of land for a term of two years at monthly rental of P300
c. Executory contract of sale of cellphone at a selling price of P500
d. Executory contract for a piece of work of furniture at a contract price of P1,000

67. What is the status of the written contract of lease of public streets or thoroughfares entered into by the
city government with the private market stallholders and operators?
a. Rescissible
b. Voidable
c. Unenforceable
d. Void

68. What is the prescriptive period for filing an action for rescission of rescissible contract or an action for
annulment of voidable contract?
a. Four years
b. Five years
c. Six years
d. Ten years

69. What is the legal remedy available to the injured innocent party when one of the essential elements of
the contract is lacking?
a. Action for declaration of nullity of contract
b. Action for rescission of contract
c. Action for annulment of contract
d. Action for reformation of instrument

70. When the nullity of the contract proceeds from the illegality of the cause or object of the contract and the act
constitutes a criminal offense, which of the following is incorrect?
a. When both parties are in pari delicto, they shall have no action against each other.
b. Both criminals shall be prosecuted and they can never recover the proceeds of the crime.
c. The instruments of the crime shall be forfeited in favor of the government.
d. If only one of the parties is guilty, the innocent one will never be allowed to claim what he has given.

71. It refers to a stipulation in a contract of pledge or contract of mortgage whereby the thing pledged or
mortgaged shall automatically become the property of the creditor in the event of non-payment of the
secured debt within the term fixed.
a. Pactum creditarium
b. Pactum commissorium
c. Pactum debitarium
d. Pactum crematorium

72. A and B jointly borrowed P10,000 from C. In order to secure the obligation, A pledged his cellphone
while B pledged his laptop. At the maturity date of the loan, A paid P5,000 of the loan. Which of the
following statements is correct?
a. The contract of pledge on the cellphone is extinguished.
b. The obligation of B is extinguished.
c. A cannot demand the release of his cellphone because a contract of pledge is indivisible.
d. The contract of pledge on the laptop is extinguished.

73. If two or more things are pledged, who has the right to choose which thing will be sold in the absence of
stipulation in the contract of pledge?
a. Pledgor
b. Pledgee
c. Debtor
d. Government

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74. What is the remedy of the pledgor-owner if there are reasonable grounds to fear the destruction or impairment of
the thing pledged without the fault of the pledgee?
a. To ask for the return of the thing, upon offering another thing in pledge, provided the latter is of
the same kind as the former and not of inferior quality but subject to the right of the pledgee to sell
the said pledged item in public auction.
b. To ask that the thing pledged be deposited judicially or extrajudicially.
c. To ask that the thing pledged be deposited with a third person.
d. To ask for the extinguishment of the contract of pledge.

75. Which of the following extinguishes both the contract of pledge and its secured contract of loan?
a. Return by the pledgee to the pledgor of the thing pledged.
b. Renunciation or abandonment in writing by the pledgee of the contract of pledge.
c. Appropriation by the pledgee of the thing pledgee in case of default by the debtor in the payment of
contract of loan.
d. Sale of the thing pledged in public auction by the pledgee for net proceeds less than the amount of
the loan.

76. Which of the following stipulations in a contract of pledge is valid?

a. A stipulation which provides that the contract of pledge is not extinguished by the return of the thing
pledged
b. A stipulation allowing the appropriation by the pledgee of the thing pledged in case the same is not
sold in the first and second auctions
c. A stipulation for the recovery of deficiency in case the proceeds from the sale of the thing pledged is less
than the amount of the obligation.
d. A stipulation authorizing the pledgee to become the automatic owner of the thing pledged in case of
default by the debtor in the payment of the secured contract of loan.

77. Which of the following statements regarding the sale of the thing pledged in public auction regarding contract of
pledge is incorrect?
a. The pledgee is generally entitled to the excess unless there is stipulation to the contrary.
b. The pledgor may recover the excess if there is stipulation to that effect.
c. The pledgee can never recover any deficiency even if there is stipulation for such recovery.
d. The pledgor may become liable to any deficiency if there is stipulation to that effect.

78. Which of the following is not a characteristic of contract of real estate mortgage?
a. Accessory contract
b. Formal contract
c. Indivisible contract
d. Inseperable contract

79. Which of the following stipulations in a contract of real estate mortgage is valid?
a. A stipulation forbidding the mortgagor-owner from alienating the immovable mortgaged.
b. A stipulation providing that the mortgagee shall become the automatic owner of the property mortgaged
upon failure of the debtor to pay the principal obligation.
c. Tipo or upset price which refers to price set by the parties as the amount at which the property at which
the property will be sold at public auction.
d. A stipulation prohibiting a second mortgage with respect to property registered under the Torrens
System.

80. It is a type of foreclosure made through the filling of a petition in court under Rule 68 of Rules of Court and
availed of when the deed of real estate mortgage does not provide for special power of attorney (SPA) authorizing
the mortgagee-creditor to foreclosure it extrajudicially.
a. Legal foreclosure
b. Conventional foreclosure
c. Judicial foreclosure
d. Extra-judicial foreclosure

81. It refers to the right of the mortgagor to repurchase the property within a certain period after it was sold in public
auction for the payment of the mortgage debt.
a. Equity of redemption
b. Right of redemption
c. Conventional redemption
d. Right of preemption

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82. In case of extrajudicial foreclosure of real property under Act No. 3135, what is the period of the exercise of right
of redemption by the debtor-mortgagor or any other persons authorized by the said law?
a. Within the term of one year and after the date of sale or registration of the sheriffs certificate of
foreclosure sale.
b. Within the term of 90 days and after the date of extrajudicial sale or registration of the sheriffs certificate
of foreclosure sale.
c. Within the term of two years and after the date of extrajudicial sale or registration of the sheriffs
certificate of foreclosure sale.
d. Within the term of six months and after the date of extrajudicial sale or registration of the sheriffs
certificate of foreclosure sale.

83. Notwithstanding Act 3135, Section 47 of RA 8791 (General Banking Laws) provides that juridical persons whose
property is being sold pursuant to an extrajudicial foreclosure by banks, shall have the right of redemption to be
exercised
a. Within 3 months after the foreclosure and sale but not after the registration of the certificate of
foreclosure sale with the applicable Register of Deeds.
b. Within 6 months after the foreclosure and sale but not after the registration of the certificate of
foreclosure sale with the applicable Register of Deeds.
c. Within 1 year after the foreclosure and sale but not after the registration of the certificate of foreclosure
sale with the applicable Register of Deeds.
d. Within 2 years after the foreclosure and sale but not after the registration of the certificate of foreclosure
sale with the applicable Register of Deeds.

84. Which of the following statements regarding the sale of the thing mortgaged in public auction regarding contract
of real estate mortgage is correct?
a. The mortgagor is generally entitled to the excess unless there is stipulation to the contrary.
b. The mortgagee may generally recover the deficiency unless there is stipulation to the contrary.
c. Both A and B.
d. Neither A nor B.

85. What is the classification of contract of chattel mortgage as to its perfection?

a. Solemn contract
b. Consensual contract
c. Real contract
d. Legal contract

86. Where shall contract of chattel mortgage involving shares of stocks be registered?
a. Chattel Mortgage Registry where the mortgagor resides
b. Chattel Mortgage Registry where the principal office of the corporation is located
c. Both A and B
d. Neither A nor B

87. Which of the following statements regarding the sale of the thing mortgaged in public auction regarding contract
of chattel mortgage is correct?
a. The mortgagor is generally entitled to the excess unless there is stipulation to the contrary.
b. The mortgagee may generally recover the deficiency unless there is stipulation to the contrary.
c. Both A and B.
d. Neither A nor B.

88. It is an accessory contract whereby the creditor acquires the right to receive the fruits of an immovable of his
debtor, with the obligation to apply them to the payment of the interest, if owing, and thereafter to the principal of
his credit.
a. Contract of real estate mortgage
b. Contract of chattel mortgage
c. Contract of pledge
d. Contract of antichresis

89. What is the classification of contract of antichresis as to its perfection?

a. Solemn contract
b. Consensual contract
c. Real contract
d. Legal contract

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 90. Which of the following may become the subject matter of contract of antichresis?
a. Farm lot
b. Car
c. Shares of stocks
d. Patent

1. While traversing a narrow bridge, a passenger bus owned by DLTBCo. and Oil Tanker Owned by Petron Inc.
collided. The passenger bus was driven by Mr. Reyes, an employee of DLTBCo., while the Oil Tanker was driven by
Mr. Santos, an employee of Petron Inc. Mr. Paterno, a passenger of the bus, and Mr. Torino, a pedestrian crossing the
road, were injured. What can be the source of obligation of Petron Inc. to Mr. Paterno?
a) Contract
b) Law
c) Quasi-delict
d) Quasi-contract

2. M issued a promissory note as evidenced of his debt to P amounting P10,000. Subsequently, P assigned the said note
to A. Afterwards, A assigned the note to M. What mode ultimately extinguishes the obligation?
a) Merger
b) Compensation
c) Novation
d) Remission

3. D has matured obligation amounting to P10,000 to C. On its maturity date, D and C agreed that D’s cellphone with
historical cost of P9,000 and accumulated depreciation of P2,000 will be transferred to C in satisfaction of the debt.
At the time of the transfer, the fair value of the said cellphone is P8,000. How much obligation is extinguished by the
said mode?
a) P9,000
b) P10,000
c) P8,000
d) P7,000

4. What legal remedy is available to the injured party if the other party is guilty of mora accipiendi?
a) Dation en pago
b) Application of payment
c) Cession
d) Consignation

5. Mr. Bank Depositor made withdrawal deposit slip in the amount of P4,000. Unfortunately, the teller of the depositary
bank gave him P5,000. What is the prescriptive period available to the bank to file an action to recover said excessive
P1,000?
a) Four (4) years
b) Five (5) years
c) Six (6) years
d) Ten (10) years

6. In what type of novation involving the change of debtor is consent of the creditor mandatory?
a) Expromission
b) Delegacion
c) Both Expromission and Delegacion
d) Neither Expromission nor Delegacion

7. In unilateral obligation to give a determinate thing subject to a condition, when is the debtor entitled to the fruits of
the determinate thing that arise during the pendency of the condition?
a) Only when the condition is suspensive
b) Only when the condition is resolutory
c) Never because the creditor is entitled to the fruits.
d) Either suspensive condition or resolutory condition

8. In which of the following scenarios will the debtor lose the benefit of the period of obligation with a suspensive
period?
a) When the debtor attempts to abscond
b) When the debtor becomes solvent
c) When the security or collateral of the obligation was impaired by fortuitous event
d) Any of the above scenarios

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9. In which of the following obligation is delay not applicable?
a) Positive obligation
b) Negative obligation
c) Real obligation
d) Personal obligation

10. BTS, a Korean K-Pop Group, entered into a contract of service involving concert with SM Event Incorporated.
Unfortunately, BTS refuses to continue with its obligation. What legal remedy is available to SM Event
Incorporated?
a) File an action for specific performance against BTS
b) File an action and ask for another K-Pop Group to perform in the scheduled concert at the expense of BTS
c) File an action for declaration of nullity of contract
d) File an action for damages for breach of contract

11. Melona, a minor, sold in writing the specific laptop owned by her adult sister at a price of P500 to Atty. Santos. What
is the status of contract of sale of the said laptop?
a) Rescissible
b) Voidable
c) Unenforceable
d) Void

12. How is an agreement to pledge a personal property perfected?

a) By mere consent
b) By delivery of personal property
c) By notarization of instrument evidencing the agreement
d) By operation of law

13. When may the creditor of debt be allowed to recover deficiency in the concept of pledge?
a) When there is an expressed agreement that the creditor may recover the deficiency.
b) In case of legal pledge
c) The creditor can never recover the deficiency because that is prohibited by law.
d) The creditor may recover the deficiency in the absence of agreement to the contrary.

14. When is a contract of mortgage considered indivisible?

a) When the principal contract of loan is joint.
b) When the principal contract of loan is solidary.
c) It is always divisible.
d) Whether the principal contract of loan is either joint or solidary

15. D borrowed P100,000 from C. M mortgaged his own land to secure the said loan. D failed to pay the loan on its
maturity date that resulted to the foreclosure of the land. The public sale of the land resulted to deficiency. May C
recover the deficiency from M?
a) Yes in the absence of stipulation to the contrary.
b) No because novation is never presumed.
c) No unless there is agreement for recovery of deficiency.
d) Yes in all cases.

16. D borrowed P3,000 from C evidenced by promissory note issued by D. D pledged and delivered his watch to C as
collateral. At the maturity date of the debt, C voluntarily returned the said note to D. What contract is extinguished?
a) Both contract of loan and contract of pledge
b) Contract of loan only
c) Contract of pledge only
d) Neither contract of loan nor contract of pledge

17. Which of the following instruments may be reformed?

a) Notarial will
b) Holographic will
c) Donation inter vivos wherein a simple condition is imposed
d) Void agreement

18. Which of the following contracts may be assailed by a noncontracting party?

a) Contract covered by statute of fraud
b) Contract intended to defraud creditor
c) Unauthorized contract
d) Contract wherein consent of a contracting party is vitiated

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19. L delivered his specific financial accounting book to B so that the latter can use it for reviewing for the board exam
without any valuable consideration. In case of ambiguity in the incidental circumstances of this agreement, how shall
it be resolved?
a) In favor of greatest of transmission of rights
b) In favor of least transmission of rights
c) In favor or greatest reciprocity of interests
d) In favor or least reciprocity of interests

20. S sold the mass of black pepper stored in his specific warehouse to B. S physically delivered the key of the said
warehouse to B. What type of constructive delivery was done by S?
a) Traditio longa manu
b) Tradition brevi manu
c) Tradition clavium
d) Traditio constitutum possessorium

21. While the goods are being transported by the common carrier to the buyer, the latter became insolvent. If you are the
unpaid seller, what specific right will you exercise in this case?
a) Right to rescind the sale of the goods
b) Right to resell the goods to another buyer
c) Right to possess the goods being transported
d) Right to stop the goods while in transit

22. Nestle Incorporated sold and delivered a specific chuckie chocolate drink to Rodel Cruz, a minor, at a price of P200.
Which of the following is correct?
a) Rodel Cruz must pay a reasonable price for the chocolate drink.
b) The guardian of Rodel may file an action for annulment of contract of sale.
c) Nestle Incorporated may file an action for annulment of contract of sale.
d) The contract of sale is void because the buyer is an incapacitated person.

23. Which of the following modes of extinguishing obligation is essentially gratuitous and requires acceptance by the
debtor?
a) Novation
b) Merger
c) Remission
d) Compensation

24. When is a contract entered into through telegram perfected?

a) From the moment the letter of acceptance is sent to the offerer
b) From the moment the letter acceptance came to the knowledge of the offerer
c) From the moment the letter acceptance is received by the offerer
d) From the moment the letter of acceptance is notarized

25. To whom shall civil interdiction, insanity, death or insolvency happen in order for the offer to become ineffective?
a) Offerer
b) Offeree
c) Either offerer or efferee
d) Third person

26. Sia Cruz is renting a dormitory near UE because she is studying in UE. Due to covid crisis, UE decided to stop its
operation in the middle of the semester. As a result, the lessor of Sia sued UE for damages. What principle of
contract is violated by such complaint?
a) Mutuality
b) Relativity
c) Autonomy
d) Legality

27. C delivered a specific P1,000 peso bill to D intended as a contract of deposit which the latter thought to be a contract
of loan. What legal remedy shall be filed by the applicable party?
a) Action for reformation of instrument
b) Action for rescission of contract
c) Action for annulment of contract
d) Action for declaration of nullity of contract

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28. On January 1, 2013, C granted a one-year loan with principal amount of P1,000 to D with interest per annum of 10%.
At the date of oral agreement, C delivered the cash to D. At the maturity date of the loan, how much may C legally
collect from D?
a) P1,000
b) P1,100
c) P1,060
d) P1,120

29. Which of the following is legally enforceable in a court of law?

a) Bible doctrines
b) Natural obligations
c) Negotiorum gestio
d) All of the above

30. Which of the following defenses may not be set-up by a solidary debtor?
a) Prescription of obligation
b) Insolvency of co-solidary debtors
c) Nullity of obligation
d) None of the above

31. Which of the following obligations is immediately demandable?

a) Obligation in diem
b) Obligation ex die
c) Obligation when debtor’s means permits him to do so
d) Obligation with a suspensive condition

32. D, a resident of Makati City, has obligation to deliver a 2020 Ford Explorer Limited Edition to C, a resident of Pasig
City. A 2020 Ford Explorer Limited Edition is located in Taguig City at the time of perfection of obligation while
another 2020 Ford Explorer Limited Edition is located in Caloocan City at the time of delivery. Where shall the 2020
Ford Explorer Limited Edition be delivered?
a) Caloocan City
b) Makati City
c) Pasig City
d) Taguig City

33. B acquired a real estate with lot area of 1,000 SQM at a price of at a lump sum price of P1,000 per SQM. At the date
of delivery, B discovered that the actual area within the agreed boundaries is only 900 SQM. What legal remedy is
available to B?
a) Action for proportionate reduction of price
b) Action for cancellation of contract of sale
c) Either A or B
d) Neither A nor B

34. When is the seller liable only up to the extent of the value of the thing at the time of eviction in case there will be
eviction?
a) When there is waiver consciente
b) When there is waiver intentionada
c) When there is no waiver and the seller acted in good faith
d) When there is no waiver and the seller acted in bad faith

35. S normally enters into a contract with the general public for the production and delivery of specific cake based on the
customized design by the client at a specific price. What contract is entered by S?
a) Contract of barter
b) Contract of sale
c) Contract for a piece of work
d) Contract of lease

36. This money is proof of perfection of contract of sale.

a) Option premium
b) Option money
c) Show money
d) Arras money

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37. What is the cash surrender value earned by a buyer of residential real property in installment when he has paid 20
years of installment?
a) 50%
b) 70%
c) 75%
d) 90%

38. D is indebted to C. D defaulted in the payment of matured obligation despite repeated demands from C. This
prompted C to file an action against D that resulted to issuance by trial court of writ of attachment to execute the
judgment. The sheriff attached the car owned by D. Before the public sale of the car, D sold the attached car and his
big bike to different buyers. Which contract of sale is rescissible?
a) Contract of sale of car
b) Contract of sale of bike
c) Both contracts of sale
d) Neither contracts of sale

39. Which accessory contract to principal contract of loan is pactum commissorium not applicable?
a) Contract of pledge
b) Contract of mortgage
c) Contract of antichresis
d) None of the above

40. Which of the following is not an essential element of contract?

a) Prestation
b) Consideration
c) Motive
d) All of the above

41. What is the prescriptive period for filing an action involving redhibitory defect of animal sold from the date of
delivery?
a) 3 days
b) 40 days
c) 6 months
d) 1 year

42. What is the period for the exercise of legal redemption?

a) 4 years
b) 10 years
c) 30 days
d) 6 months

43. In which of the following cases is conventional redemption applicable?

a) Pacto de retro sale
b) Barter
c) Dacion en pago
d) All of the above

44. Which of the following may become the subject matter of contract?
a) Public land
b) Patrimonial property of the state
c) National park
d) None of the above

45. Which of the following damages refers to the penalty in obligation with a penal clause?
a) Exemplary damages
b) Nominal damages
c) Liquidated damages
d) Moral damages

46. Which of the following contracts is covered by statute of fraud?

a) Contract for a piece of work with a price of at least P500
b) Contract of barter involving object with value of at least P500
c) Contract of rent involving personal property for a period exceeding one year
d) Contract of guaranty securing a principal contract of loan with principal amount exceeding P500

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47. Which of the following contracts is void?
a) Absolutely simulated contract
b) Contract where both parties are incapacitated to give consent
c) Contract where the ward suffered lesion by more than ¼ the value of the subject matter of contract
d) Contract whereby dolo incidente is committed by a contracting party

48. Which of the following contracts is considered a principal contract, a preparatory contract and a consensual contract
at the same time?
a) Contract of loan
b) Contract of agency
c) Contract of mortgage
d) Contract of marriage

49. Which will transfer ownership from the seller to the buyer in sale or return arrangement?
a) Delivery
b) Satisfaction by the buyer
c) Unreasonable retention by the buyer
d) Inconsistent act to the ownership of the seller committed by the buyer

50. Which of the following instances will not create a rebuttable presumption that the pacto de retro sale or absolute sale
is an equitable mortgage?
a) The period of right of repurchase is extended.
b) The price of pacto de retro sale is inadequate.
c) The buyer retains part of the purchase price.
d) The seller retains possession of the property as a lessee.

-END-

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