OBLIGATIONS General Provisions
Meaning of Obligation; Meaning of Juridical Necessity; Nature of Obligations; Essential Requisites; Form of Obligations; Kinds of Obligation According to Subject Matter (1156)
10. 1st Statement: In alternative obligations, it is the communication of which prestation to perform made by the debtor shall convert the alternative obligation into a pure or simple one.
2nd Statement: In case of a joint obligation, the co-debtors may be held liable for the share of an insolvent co-debtor
A. B. C. D.
1st Statement True False True False
2nd Statement True False False True
Sources of Obligations (1157) Legal Obligations (1158)
Contractual Obligations, Compliance in Good Faith (1159) Quasi-Contracts (1160)
Quasi-Contractual Obligations; Kinds of Quasi-Contracts
Civil Liability Arising from Crimes or Delicts; Scope of Civil Liability (1161) Quasi-Delicts (1162)
Obligations Arising from Delicts; Requisites of delict; Crime Distinguished from Quasi-delict
4. A mango tree in the land of O is reclining towards the road. All of a sudden, without a storm or an earthquake or even strong wind, the tree falls hitting a car belonging to X causing a P200,000 damage. The liability of O to X arises from
A. Contract C. Delict
B. Quasi-contract D. Quasi-delict
Nature and Effect of Obligations Specific & Generic Thing (1163)
Meaning of Specific or Determinate Thing; Meaning of Generic or Indeterminate Thing; Specific Thing and Generic Thing Distinguished; Duties of Debtor in Obligation to Give a Determinate Thing; Duties of Debtor in Obligation to Deliver a Generic Thing
Fruits (1164)
Different Kinds of Fruits; Right of Creditor to the Fruits; When Obligation to Deliver Fruits Arises 1. S agreed to sell B his land and B agreed to pay P10,000 if X will pass CPA Exams of 2002. X
passed. Meantime, interest earned is P1,200, while the fruits harvested is P2,000. A. S will deliver the land to B
B. B will pay S the price of the sale C. Combination of A and B
D. Combination of A and B, together with the fruits and interest 1. The buyer has the right to the fruits of the thing from:
A. Time of delivery C. Time contract of sale is perfected B. Time of obligation to deliver it arises D. Time fruits are delivered
Meaning of Personal Right and Real Right; Personal Right and Real Right Distinguished; Ownership Acquired by Delivery
Remedies of Creditor in Real Obligation; Responsibility of Debtor who Delays or Has Promised Delivery to Separate Creditors (1165)
Accessions and Accessories (1166)
Meaning of Accessions and Accessories; Right of Creditor to Accessions and Accessories
Situations Contemplated in Art. 1167; Remedies of Creditor in Positive Personal Obligation; Performance by Third Person (1167)
Remedies of Creditor in Negative Personal Obligation (1168) Delay (1169)
Meaning of Delay; Kinds of Delay or Default
2. The delay of the part of the creditor to accept the performance of an obligation
A. Dolo incidente C. Dolo causante
B. Mora accipiendi D. Mora solvendi
No Delay in Negative Personal Obligation; Requisites of Delay or Default by the Debtor; Effects of Delay; When Demand is Not Necessary to Put Debtor in Delay
2. Rose obliges herself to give Jack 1 dozen of eggs on January 15, 2003. When the date arrived, Rose failed to deliver despite repeated demands from Jack. Jack’s remedy is:
A. Compel Rose to deliver the eggs plus damages. B. Compel Rose to pay the amount of the eggs. C. Rescind the contract.
D. Ask a 3rd person to deliver the eggs to him but chargeable to Rose.
2. Debtor obliged himself to deliver to creditor 100 cavans of rice on June 1, 2001. On said date, D failed to make delivery despite repeated demands by C. In this case:
A. C has no remedy under the law
B. C can compel D to deliver 100 cavans of rice plus damages
C. C may ask a third person to deliver 100 cavans of rice to him, the value recoverable from D plus damages
D. None of the above.
4. D obliges himself to pay C P100,000 in 30 days plus a penalty of P20,000 if A fails to pay the obligation in due time. D failed to pay his obligation in 30 days. C can demand from D A. The principal amount of P100,000 plus the penalty of P20,000 plus interest. B. The principal amount of P100,000 plus legal interest.
C. The principal amount of P100,000 plus the penalty of P20,000, plus interest, plus damages.
D. The principal amount of P100,000 plus the penalty of P20,000.
7. Paula obliged herself to give to Cathy her BMW car on October 10, 2004 but she failed to deliver on that date. On the following day, a lighting completely destroyed the car.
A. Paula is still liable for she is in default already.
B. Paula is no longer liable there being no demand, there is no delay and the thing is lost due to fortuitous event
C. Cathy can demand for a substitute. D. Paula is not liable even if she is in default.
4. R bought her diamond ring to a jewelry shop for cleaning. The jewelry shop undertook to return the ring by February 1, 2001. When the said date arrived, the jewelry shop informed R that the job was not yet finished. They asked her to return five days after. On February 6, 2001, R went to the shop to claim the ring, but she was informed that the same was stolen by a thief who entered the shop the night before. Later, the ring was found in the possession of “T”, the thief.
1st Statement: The jewelry shop is not liable because the lost of the ring is due to force
majeure. The right of R is to proceed against T, the theft.
2nd Statement: The right of R is to proceed against the jewelry shop owner and ask for the
value of the ring plus damages because there was a breach of contract. The shop cannot escape liability because there was delay.
A. B. C. D.
1st Statement True False True False
2nd Statement True False False True
Grounds for Liability; Fraud and Negligence Distinguished (1170)
2. A, B and C are obliged to give X, Y and Z a specific car valued at P600,000. On due date, X, Y, and Z demanded delivery from A but A did not deliver. The following day, the car is lost due to fortuitous event.
A. The obligation is extinguished because the loss is due to fortuitous event
B. The obligation is extinguished because the debtor are guilty of default, but instead converted into money consideration
C. the creditor can require the debtor to deliver another car but more valuable D. Answer not given
3. Christine obliged herself to give to Conrad her BMW car on October 10, 2003 but she failed to deliver on that date. On the following day, a lightning completely destroyed the car.
A. Christene is still liable for she is in default already.
B. Christene is no longer liable there being no demand, there is no delay and the thing is lost due to fortuitous event.
C. Conrad can demand for a substitute.
D. Christene is not liable even if she is in default.
Responsibility Arising from Fraud Demandable; Waiver of Action for Future Fraud Void; Waiver of Action for Past Fraud Valid (1171)
1. In the execution of obligations, liability for malice or bad faith
A. Extends not only to results intended but also to their foreseen consequences. B. Is demandable in all obligations but may be renounced in advance.
C. Extends only to results intended but excluding exemplary damage
D. Extends to natural consequences even if they exceed the debtor's expectations.
1. 1st Statement: Negligence in the performance of a pre existing contract or culpa contractual is
one of the sources of obligations.
2nd Statement: Waiver for a future fraud is void but a waiver for a fraud done (past fraud) is
valid.
1st Statement True False False True
2nd Statement True False True False
Negligence (1172-1173)
Responsibility Arising from Negligence Demandable; Validity of Waiver of Action Arising from Negligence; Kinds of Negligence According of to Source of Obligation; Effect of Negligence on the Part of the Injured Party
Meaning of Fault or Negligence; Factors to be Considered; Measure of Liability for Damages; Kinds of Diligence Required
5. Which of the following is not a ground for damages?
A. Promising to deliver the same thing to two different persons not having the same interest therein.
B. Performance of an act which impairs the strict and faithful fulfillment of the obligation. C. Non-performance of an obligation with respect to time.
D. None of the above.
1. The standard of care that a person obliged to give something must observe in the preservation of the specific thing subject matter of an obligation.
A. That diligence of a good father of a family
B. That diligence which the parties have stipulated on C. That diligence which the law provides
D. All of the above
1. The initial standard of care that a person is obliged to give something must observe in the preservation of the specific thing subject matter of an obligation.
A. That diligence of a good father of a family.
B. That diligence which the parties have stipulated on. C. That diligence which the law provides.
D. None of the above.
4. X a passenger of a bus plying the Manila-Baguio route, sustained serious physical injuries brought about by the reckless driving of Y, the designated bus driver, when the bus rammed into a concrete wall at around 11:00 pm that day. In a criminal case against the driver, the latter was acquitted. Thereafter, X filed a case against the bus company for culpa contractual. Will the suit prosper?
A. No, this would constitute double jeopardy
B. Yes, provided he can prove the negligence of Y, the driver
C. No, the dismissal of the criminal case against Y carries with it the dismissal of the civil aspect which was not reserved
D. Yes, so long as he can prove the existence of a contract of common carriage between him and the bus company at the time he sustained the injuries.
2. A person is entitled to adequate compensation only for such pecuniary loss suffered by him as he has duly proved, except as provided by law or by stipulation. Such payment is referred to as
A. Nominal damages C. Liquidated damages
B. Compensatory damages D. Monetary damages Fortuitous Event (1174)
Meaning of Fortuitous Event; Fortuitous Event Distinguished from Force Majeure; Kinds of Fortuitous Events; Requisites of a Fortuitous Event; Rules as to Liability in Case of Fortuitous Event
Loan, Usury, Interest (1175)
Meaning of Simple Loan or Mutuum; Meaning of Usury; Requisites for Recovery of Interest Presumption (1176)
Meaning of Presumption; Two Kinds of Presumption; When Presumptions Do Not Apply Remedies Available to Creditors for the Satisfaction of their Claims (1177)
Transmissibility of Rights (1178) Comprehensive
5. 1st Statement: Mr. X waived in advance his right to sue Mr. A, if A will cause him injury due to
A’s negligence. The waiver is void.
2nd Statement: Dolo incidente or fraud in the celebration of contacts is a ground to annul the
obligation.
A. B. C. D.
1st Statement True False True False
2nd Statement True False False True
Different Kinds of Obligations Pure and Conditional Obligations (1179)
Meaning of Pure Obligation; Meaning of Conditional Obligation; Meaning of Condition; Characteristics of a Condition; Two Principal Kinds of Condition; Distinctions beween Suspensive and Resolutory Conditions; When Obligations is Demandable at Once; Past Event Unknown to the Parties
8. A promissory note signed by D and dated March 15, 2002 is worded as follows, “I promise to pay C the sum of Fifty Thousand Pesos (P50,000) provided that if she should fail in the October, 2002 CPA Examination, she shall return to me said amount.” The above note gives rise to an obligation with
A. Suspensive condition C. Resolutory condition
B. Casual condition D. None of the above
Where Duration of Period Depends Upon the Will of Debtor (1180) Effect of Happening of Condition (1181)
Classification of Conditions (1182)
Potestative Condition; Where Suspensive Condition Depends upon Will of Debtor; Where Suspensive Condition Depends upon Will of Creditor; Where Resolutory Condition Depends upon the Will of Debtor; Casual Condition; Mixed Condition; Where Suspensive Condition Depends Partly upon Will of Debtor.
3. DR promised to give DE, his grandson, a car if the latter will pass the bar examinations. When his grandson passed the said examinations, which of the following statements is true?
A. DR may refuse to deliver because the condition is purely a potestative one.
B. The obligation is valid because the condition depends upon the sole will of the donor. C. Both the obligation and the condition are ineffective because they depend upon the sole
will of the donor.
D. The obligation is valid although potestative because they depend upon the sole will of the donee.
Impossible Conditons (1183)
Two Kinds of Impossible Conditions; Effect of Impossible Conditions
4. 1st Statement: “I will give you a specific car if you will not marry X this year (1999). If by the end
of 1999, both parties are alive and no marriage has taken place, my obligation is extinguished. 2nd Statement: “I will give you P10,000 if you cannot make a dead man alive. This is impossible
condition, obligation not demandable.
A. B. C. D.
1st Statement True False True False
2nd Statement True False False True
Positive Condition (1184) Negative Condition (1185)
Constructive Fulfillment of Condition (1186)
Constructive Fulfillment of Suspensive Condition; Constructive Fulfillment of Resolutory Condition; Retroactive Effect of Fulfillment of Condition (1187)
Retroactive Effects of Fulfillment of Suspensive Condition; Retroactive Effects as to Fruits and Interests in Obligations to Give
Rights Pending Fulfillment of Suspensive Condition (1188) Loss (1189)
Requisites for Application of Article 1189; Kinds of Loss; Rules in Case of Loss, Deterioration, or Improvement of Thing During Pendency of Suspensive Condition
Fulfillment of Resolutory Condition (1190)
Effects of Fulfillment of Resolutory Condition; Applicability of Article 1189 to Party with Obligation to Return)
Art. 1191
Kinds of Obligation According to the Person Obliged; Remedies in Reciprocal Obligations; Court may Grant Guilty Party Term for Performance; Remedies are Alternative; Limitations on Right to Demand Rescission; Rescission Without Previous Judicial Decree
Breach (1192)
Where Both Party are Guilty of Breach Comprehensive
Obligations with a Period (1193)
Meaning of Obligation with a Period; Meaning of Period or Term; Period and Condition Distinguished; Kinds of Period or Term
9. “Conrado will continue giving Pedro the latter’s meal allowance until the end of this year”, is an obligation subject to:
B. a suspensive condition D. a suspensive period 2. Which of the following is not an obligation with a period?
A. Obligation payable within 2 years
B. Obligation payable within a reasonable time
C. Obligation payable on or before a given date in the future D. None of the above
5. 1st Statement: “To Maria, my true love, I obliged myself to give you my one and only horse
when I feel like it.
2nd Statement: “To Perla my true sweetheart, I obliged myself to pay you the P500.00 I owe
you when I feel like it.
A. B. C. D.
1st Statement Void Valid Void Valid
2nd Statement Void Valid Valid Void
6. 1st Statement: “To Maria, my true love, I obliged myself to give you my one and only horse
when I feel like it.
2nd Statement: “To Perla my true sweetheart, I obliged myself to pay you the P500.00 I owe
you when I feel like it.
A. B. C. D.
1st Statement Enforceable Not Enforceable Enforceable Not Enforceable
2nd Statement Enforceable Not Enforceable Not Enforceable Enforceable
Effect of Loss, Deterioration, or Improvement before Arrival of Period (1194) Payment before Arrival of Period (1195-1198)
Debtor Presumed Aware of Period; No Recovery in Personal Obligations; Presumption as to Benefit of Period
16. On July 1, 1997, A signs a promissory note and binds himself to pay X P100,000 plus 15% per annum interest on June 30, 1999
A. Before June 30, 1999. X can demand payment
B. If on June 30, 1998 A is paying X, X cannot refuse the payment
C. Because the period is for the benefit of the debtor A can compel creditor X to accept payment any date before June 30, 1999
D. Because the period is for the benefit of the debtor and creditor, X can refuse any tendered payment before June 30, 1999.
2. A sold to B the former’s horse for P5,000. No date is fixed by the parties for the performance of their respective obligation. The obligation of A is
A. To deliver the horse immediately as there is a perfected contract
B. To deliver the horse within a reasonable time of two months from the contract date C. To deliver the horse upon payment by B of P5,000
D. To rescind the contract as there is no time fixed for the delivery and payment Exceptions to the General Rule; Computation of Term or Period
Court Generally Without Power to Fix a Period; Exceptions to the General Rule; Legal Effect Where Suspensive Period/Condition Depends upon the Will of Debtor; Period Fixed Cannot be Changed by the Courts
3. 1st Statement: If the obligation does not fix a period, but from its nature and the circumstances,
it can be inferred that a period was intended, the court may fix the duration thereof. Once it is fixed by the court, the parties cannot change the fixed date for performance.
2nd Statement: “I will give you P10,000, as soon as possible.” This is an obligation with a period
for the benefit of both the debtor and creditor.
A. B. C. D.
1st Statement True False True False
2nd Statement True False False True
When Obligation Can be Demanded Before Lapse of Period
3. When the period is "on or before a date", the debtor has the benefit of the period. This benefit is lost and the obligation becomes demandable when:
A. the debtors attempts to abscond.
B. after contracting the obligation, the creditor suspects the debtor to becoming insolvent.
C. the guarantee given by the debtor is not acceptable to the creditor. D. demand by the debtor could be useless.
Alternative Obligations (1199-1206)
Kinds of Obligation According to Object; Meaning of Alternative Obligation
Right of Choice, as a Rule, Given to Debtor; Right of Choice of Debtor Not Absolute Communication of Notice that Choice has been Made
Effect when only one Prestation is Practicable When Debtor may Rescind Contract
Effect of Loss of Objects of Obligation; Basis of Indemnity
6. D obliged to give C, either object No.1 valued P15,000 or object No. 2 valued P10,000; or object No. 3 valued P5,000. All the objects were lost due to D’s fault in the following order stated.
A. D’s obligation is extinguished
B. D’s obligation is to pay the value of object No.1 plus damages C. C’s right id to demand the value of any of the object plus damages D. None of the above
When Right of Choice belongs to Creditor; Rules in Case Loss before Creditor has Made Choice; Rules Applicable to Personal Obligations
4. A obliged himself to deliver to B his dog, his cow, his carabao, his elephant or his crocodile and gave B the right of choice. The first two were lost due to fortuitous event and the last three were lost due to A’s fault.
A. Creditor, B may convert to cash any of them plus damages.
B. Debtor A may convert to cash the value of the last one lost plus damages. C. A may rescind the contract plus damages.
D. Creditor, B may convert to cash any of the last three plus damages.
Meaning of Facultative Obligation; Effect of Loss; Alternative and Facultative Obligations Distinguished
7. Effect of the loss of the thing in a facultative obligation. Which is incorrect?
A. Before substitution: if the principal thing is lost due to fortuitous event, there is no more obligation.
B. Before substitution: if the substitute thing is lost due to debtor's fault, there is no more obligation.
C. After substitution, if the principal thing is lost, the debtor is no longer liable even if it was lost due to his fault.
D. None of the above
Joint and Solidary Obligations (1207-1222)
Meaning of Joint and Solidary Obligations; When Obligation Solidary; Words Used to Indicate Solidary Liability; Kinds of Solidarity
3. A, B, and C secured a loan from X. The promissory note which evidences the obligation states that: “I promise to pay” and signed by A, B, and C. Here, the obligation is
A. Divisible. C. Indivisible.
B. Joint. D. Solidary.
Kinds of Obligations According to the Number of Parties; Collective Obligation Presumed to be Jointl Presumption Subject to Rules on Multiplicity of Suits; Words Used to Indicate Joint Liability; Solidarity not Presumed
Joint Indivisible Obligation
Indivisibility and Solidarity Distinguished
Kinds of Solidary Obligation According to the Legal Tie; Solidarity not Affected by Diverse Stipulations
Act of Solidary Creditor Prejudicial to Others Assignment by Solidary Creditor of His Rights Payment to Any of the Solidary Creditors
Liability of Solidary Creditor in Case of Novation, Compensation; Confusion; or Remission; Effect of Novation, etc. where Obligation Joint
Right of Creditor to Proceed Against Any Solidary Debtor
2. X, Y and Z executed a promissory note for P18,000.00 payable to the orders of A, B and C. At maturity, can the creditors proceed to collect from X alone for the payment of the entire debt? A. Yes, since the note is silent as to the nature of the liability of the debtors, the obligation is
presumed to be solidary.
B. No, each creditor is entitled to collect only P2,000 from X. C. Yes, any of A, B or C can collect P18,000 from X
D. No, each creditor can collect only P6,000 from X
3. X and Y bound themselves solidarily to deliver to A a specific motorboat worth P120,000. The motorboat was not delivered to A as it was destroyed by fire through the fault of Y. Thereupon A sued X in court and the court awarded P150,000 in favor of A representing the value of the boat plus damages. Given this scenario, which of the following statements is correct?
A. X can be compelled to pay A only P60,000 as his share in the obligation, and refuse to pay the penalty because it should be charged against Z, the guilty party
B. If X pays A P150,000, he can collect from Y the entire amount of P150,000 C. If A successfully collects from X P150,000, X in turn, can collect P90,000 from Y D. A has to collect P60,000 from X and P90,000 from Y
7. Debtor’s A, B, C and D are liable to creditors E, F, G and H in the amount of P200,000. Assuming passive solidarity exists among A, B, C and D, how much can E and F collect from A?
A. P 50,000 C. P150,000
B. P100,000 D. P200,000
2. Debtor’s A, B, C and D are liable to creditors E, F, G and H in the amount of P400,000. Assuming passive solidarity exists among A, B, C and D, how much can E and F collect from A?
A. P100,000 C. P350,000
B. P200,000 D. P400,000
8. Debtor’s A, B, C and D are liable to creditors E, F, G and H in the amount of P200,000. If the obligation is joint, how much can E and F collect from A?
A. P12,500 C. P 50,000
B. P25,000 D. P200,000
3. Debtor’s A, B, C and D are liable to creditors E, F, G and H in the amount of P400,000. Suppose the obligation is joint, how much can E and F collect from A?
A. P25,000 C. P100,000
B. P50, 000 D. P400, 000
2. Debtors A, B, C, D and E are liable to creditors F, G, H, I & J in the amount of P50,000. How much can F, G & H collect from A & B (total amount)?
A. P12,000 C. P15,000
B. P18,000 D. P 6,000
3. Debtors A, B, C, D and E are liable to creditors F, G, H, I & J in the amount of P50,000. If active solidarity exists how much can F, G and H collect from A & B?
A. P20,000 C. P15,000
B. P 6,000 D. P12,000
3. This is the promissory note; "We promise to pay A, B and C the sum of ONE HUNDRED EIGHTY THOUSAND (P180,000) PESOS within 60 days. Signed: X,Y and Z.
A. X is obliged to pay A P20,000 B. X is obliged to pay A P60,000 C. X Is obliged to pay A P180,000
D. X is obliged to pay A, B and C, P180,000 Effects of Payment by a Solidary Debtor
6. A, B and C are solidary debtors of X for 9,000. Later, C paid X the whole obligation. Which of the following is considered a false statement as to the effects of C paying X the whole obligation
A. C becomes a creditor for reimbursement
B. After C paid X the whole obligation, the same is converted into a joint obligation of reimbursement
C. If the debtor A becomes insolvent C can collect from B P6,000 D. None of the above
2. Guillermo, Hilario and Apolinario owed in solidum (solidarily) P75,000 to Conrado as evidenced by a promissory note due on September 29, 1990. The note prescribed on September 30, 2000. On October 1, 2000, however, Apolinario paid the entire obligation to Conrado. In this case, Apolinario is:
A. not entitled to reimbursement from his co-debtors for the shares of the latter as there is no more obligation to pay
B. entitled to collect P25,000 each from Hilario and Guillermo
C. entitled to recover from Conrado as it was already a natural obligation D. entitled to recover from Conrado based on quasi-contract on solution indebiti
Effect of Payment after Obligation has Prescribed or Become Illegal; Prescriptive Periods of Action Effect of Remission of Share after Payment
No Right to Reimbursement in Case of Remission
Rules in Case Thing has been Lost or Prestation has become Impossible Defenses Available to Solidary Debtor
5. A & B are joint debtors of C, D, & E solidary creditors in the amount of P100,000. How much can E collect from A?
A. 100,000 C. 25,000
B. 50,000 D. none of the above
8. W, X, Y, Z solidarily liable to A, B, C, joint creditors for P30,000. How much can A and B collect from X?
A. P10,000 C. P20,000
B. P2,500 only D. P15,000
7. X and Y are solidary debtors of A, B and C, joint creditors to the amounts of P30,000. How much can B collect from X?
A. B can collect P30,000 from X. B in turn has to give A and C P10,000 each B. B can collect P10,000 from X.
C. B can collect P15,000 from X.
D. B can collect P30,000 from X. X in turn can recover from Y the amount of P15,000 Divisible & Indivisible Obligations (1223-1225)
Meaning of Divisible and Indivisible Obligations; Test for the Distinction; Applicability of Article; Kinds of Division; Kinds of Indivisibility; Where There is Only One Creditor and One Debtor; Effect of Noncompliance by a Debtor in a Joint Indivisible Obligation
Obligations Deemed Indivisible; Obligations Deemed Divisible; Divisibility or Indivisibility in Obligations Not to Do
Obligations with a Penal Clause (1226-1230)
Meaning of Principal and Accessory Obligations; Meaning of Obligation with a Penal Clause; Meaning of Penal Clause; Purposes of Penal Clause; Penal Clause and Condition Distinguished; Kinds of Penal Clause; Penalty Substitutes for Damages and Interests; When Creditor may Recover Damages when Penalty may be Enforced
Penalty not Substitute for Performance; Penal Clause Presumed Subsidiary; When Penal Clause Joint
Penalty Demandable Without Proof of Actual Damages; Damages Recoverable in Addition to Penalty must be Proved
When Penalty May be Reduced by the Courts
Effect of Nullity of the Penal Clause; Effect of Nullity of the Principal Obligation Comprehensive
4. Which of the following obligation is void? A. Obligation payable within a reasonable time
B. Obligation payable if the debtor cannot make a circle at the same time a square C. Obligation payable of the debtor cannot make a dead man alive
D. None of the above
1. “ I will give you this book provided that if I like to have it back, you will return the same to me” A. The obligation is void, because the fulfillment depends upon the will of the debtor B. The obligation is void, because the fulfillment depends upon the will of the creditor C. The obligation is valid because the condition merely causes the loss of rights already
acquired
D. Combination of A and B
18. Statement 1: In alternative obligations, it is the communication of which pre-station to perform made by the debtor shall convert the alternative obligation into a pure or simple one.
Statement 2: In case of a joint obligation, the co-debtors may be held liable for the share of an insolvent co-debtor.
A. B. C. D.
Statement 1 True False True False
Statement 2 True False False True
Extinguishment of Obligation
Causes of Extinguishment of Obligation (1231)
12. Which of the following is not a ground for the extinguishment of an obligation?
A. Remission D. Death of either debtor or creditor
B. Merger E. None of the above
C. Compensation
10. Which of the following is not a ground for the extinguishment of an obligation?
A. Remission D. Death of either debtor or creditor
B. Merger E. None of the above
Payment or Performance (1232-1259) Meaning of Payment
When Debt is Considered Paid
2. This is a classification of obligations where there are several prestations due and the complete performance of all shall extinguish the obligation. Identify this.
A. Facultative obligation. C. Alternative obligation.
B. Conjoint/conjunctive obligation. D. Obligation with a penal clause.
Recovery Allowed in Case of Substantial Performance in Good Faith; Requisites for the Application of Art. 1234
Recovery Allowed when Incomplete or Irregular Performance is Waived; Requisites for the Application of Art. 1235
Persons from whom the Creditor must Accept Payment; Creditor may Refuse Payment by a Third Person; Effect of Payment by a Third Person
14. A owes B P5,000. C is the guarantor of A. A was able to pay B P3,000, thus leaving P2,000 unpaid. X, against the will of A and without the knowledge of the partial payment made by A, paid B the sum of P5,000. How does this payment affect the obligation?
A. The obligation is extinguished. X, however, cannot recover any amount from A since the payment was made against will of A. Instead, A can demand payment from C, the guarantor to the amount of P5,000.
B. The obligation is extinguished. X however, can demand only P2,000 from A as this is the amount which benefited A. Instead, A can demand payment from C, the guarantor, to the amount of P5,000.
C. The obligation is extinguished. X can demand P2,000 from A, but if A cannot pay, X cannot ordinarily proceed against guarantor C because having paid against the will of A, X is not entitled to subrogation
D. X’s payment, having been made against the will of A does not extinguish the obligation. Right of a Third Person to Subrogation; Subrogation and Reimbursement Distinguished
Payment by a Third Person Who Does Not Intend to be Reimbursed
Meaning of “Free Disposal of Thing Due” and “Capacity to Alienate”; Free Disposal of Thing Due and Capacity to Alienate Required
Person to Whom Payment Shall be Made; Meaning of “Any Person Authorized to Receive it.” Effect of Payment to an Incapacitated Person; Effect of Payment to a Third Person; When Benefit to Creditor Need not be Proved by Debtor
Payment to Third Person in Possession of Credit When Payment to Creditor not Valid
Every Prestation Due Must be Complied with; When Prestation may be Substituted Special Forms of Payment; Meaning of Dation in Payment; Governing Law Rule of the Medium Quality
Debtor Pays for Extrajudicial Expenses; Losing Party Generally Pays Judicial Costs Performance of Obligation Should be Complete; When Partial Performance Allowed
Meaning of Legal Tender; Legal Tender in the Philippines; Payment by Means of Instruments of Credits
5. After many of years of shopping in the Metro Manila area, housewife HW has developed the sound habit of making cash purchases only, none on credit. In one shopping trip to Mega Mall, she got the shock of her shopping life for the first time, a store’s smart salesgirl refused to accept her coins in payment for a purchase worth not more than one hundred pesos. HW was paying seventy pesos in 25-centavo coins and twenty fives pesos in 10-centavo coins. Strange as it may seem, the salesgirl told HW that her coins were not “legal tender”. Do you agree with the salesgirl in respect for the 10-centavo coins and 25-centavo coins the legal tender is up to P50.00 only.
1st Statement: No, because for the 10-centavo coins and 25-centavo coins the legal tender is
up to P50.00 only
2nd Statement: All coins issued by the Central Bank in any amount are considered legal
tender.
A. B. C. D.
1ST Statement True False True False
2nd Statement True False False True
Place where Obligation Shall be Paid
Meaning of Application of Payments Requisites of Application of Payments; Application as to Debts not yet Due; Rules of Application of Payments
Interest Earned Paid Ahead of Principal
Legal Application of Payments; When a Debt More Onerous than Another; Where Debts Subject to Different Burdens
Meaning of Payment by Cession; Requisites of Payment of Cession; Effect of Payment by Cession; Dation in Payment and Cession Distinguished
18. Requisites of application of payment, except
A. Debts are all due C. Two or more debts
B. Debts are of different kinds D. One debtor and one creditor
9. When the debtor abandons and assigns all his properties in favor of his creditors for the latter to sell and satisfy their credits, this is:
A. Application of payment C. Dacion en pago B. Assignment in favor of creditors D. Expromission
10. When the debtor abandons and assigns all his properties in favor of his creditors for the latter to sell and satisfy their credits, this is:
A. Payment by cession C. Dacio en pago
B. Application of payment D. Expromission
9. When the debtor’s property are not enough at the moment to pay all his debt in full. This conditions is called:
A. Antichresis C. insolvency
B. Pactu commissorio D. suspension of payment
13. Insolvency of the debtor is required in:
A. Dation in payment C. Tender of payment and consignation B. Payment by cession D. Application of payment
Meaning of “Tender of Payment”; Meaning of “Consignation”; Requisites of a Valid Consignation; When Tender of Payment not Required; Requirements for Valid Tender of Payment
Prior Notice to Persons Interested Required; Consignation Must Comply with Provisions on Payment
Consignation must be with Proper Judicial Authority; Notice to be Given to Interested Parties of the Consignation Made
Creditor Bears Expenses of Consignation; When Consignatoin Deemed Properly made Withdrawal by Debtor of Thing or Sum Deposited
Effect of Withdrawal with Authority of Creditor Loss of the Thing Due (1260 -1269)
When a Thing is Considered Lost; When Loss of Thing will Extinguish an Obligation to Give; When Loss of Thing will not Extinguish Liability
6. A obliged himself to deliver to B his 7650 Nokia cellphone or as a substitute he may deliver his cute kitten. After substitution was made, the former was lost due to A’s fault.
A. A is liable and must pay damages.
B. A will simply deliver his cute kitten plus damages for the loss of the cellphone. C. The loss has no effect to the obligation.
D. Obligation was extinguished. Effect of Loss of a Generic Thing Effect of Partial Loss of a Specific Thing
Presumption of Fault in Case of Loss of Thing in Possession of Debtor When Presumption not Applicable
Effect of Impossibility of Performance; Kinds of Impossibility Effect of Difficulty of Performance
Effect of Fortuitous Event Where Obligation Proceeds from a Criminal Offense Right of Creditor to Proceed Against Third Persons
Condonation or Remission of Debt (1270-1274)
Meaning of Condonation or Remission; Requisites of Condonation or Remission; Kinds of Remission; Effect of Inofficious Remission
Presumption in Case of Voluntary Delivery of Document of Indebtedness by Creditor; Payment, not Remission of Debt
Presumption in Case Document Found in Possession of Debtor Effect of Renunciation of the Principal Debt of the Accessory Obligation Presumption in Case Thing Pledged Found in Possession of Debtor Confusion or Merger of Rights (1275-1277)
Confusion or Merger – Meaning, Reason or Basis, Requisites
Effect of Merger in the Person of (1) Principal Debtor or Creditor; (2) Guarantor Confusion in a Joint Obligation, Confusion in a Solidary Obligation
Compensation (1278-1290)
Meaning of Compensation; Compensation and Confusion Distinguished; Kinds of Compensation 19. D owes C P10,000 payable on December 25, while C owes D P10,000 payable on December
30. In here, C can set up compensation (or cum pondere) on December 25, and this is called:
A. Legal C. Judicial or “set-off”
B. Partial D. Facultative
9. D deposited his car to C as he would go to the U.S. to visit his father. In the meantime, D owed C a specific car. In case of a facultative compensation, which statement is correct? A. Only C may raise facultative compensation in this case.
B. Only D may raise facultative compensation to set off his obligation to D with the latter’s obligation.
C. Either or both C and D may raise compensation to set off the two obligations D. There cannot be a case of facultative compensation in this case.
15. D owes C P10,000 payable on December 25, while C owes D P10,000 payable on December
30. In here, C can set up compensation (or cum pondere) on December 25, and this is called:
A. Legal C. Judicial or "set-off"
B. Partial D. Facultative
8. Type of compensation which arises from a proven counterclaim is called
A. Facultative compensation. C. Voluntary or conventional compensation. B. Judicial compensation. D. Legal compensation .
20. In three of the following cases, facultative compensation shall prosper. Which is the exception?
A. gratuitous support C. mutuum
B. civil liability arising from crime D. depositum Requisites of Legal Compensation
Compensation Benefits Guarantor Total and Partial Compensation Voluntary Compensation Judicial Compensation
Compensation of Rescissible or Voidable Debts
Where Compensation has Taken Place before Assignment; Where Compensation has Taken Place after Assignment
Compensation where Debts Payable at Different Places (1286)
Instances when Legal Compensation is not Allowed by Law (1287-1288) Rules on Application of Payments Apply to Order of Compensation (1289) Consent of Parties not Required in Legal Compensation (1290)
Comprehensive
6. 1st Statement: D owes C P10,000 due on December 25, C owes D P6,000 on December 25.
P10,000, the latter (G) cannot set up compensation because he is not a principal debtor. 2nd Statement: D owes C P10,000 payable on December 25. Later, D through intimidation,
was able to make C sign a promissory note stating that C is indebted to D for the same amount. In here, D cannot be required to pay C P10,000 because he (D) can set up compensation against C.
A. B. C. D.
1st Statement True False True False
2nd Statement True False False True
Novation (1291-1299)
Meaning of Novation; Dual Function of Novation; Kinds of Novation
Requisites of Novation; Novation is not Presumed; Test of Incomparability between Two Obligations or Contracts
Kinds of Personal Novation; Kinds of Substitution; Right of New Debtor who Pays
10. When the third person assumes the payment of the obligation without the knowledge or against the will of the debtor but with the consent of the creditor, there is
A. Delegacion C. Subrogation
B. Expromission D. Novation
Effect of New Debtor’s Insolvency or Nonfullment of the Obligation in Expromision
11. A owes B – P10,000. Without the consent of A, B agreed with C’s proposal (C is suitor of A) to answer for A’s obligation for which A vehemently objected to but could not do anything. The following week all of C’s properties were destroyed by fire, hence he could no longer pay the P10,000 obligation.
A. A’s obligation is revived. C. A must answer for ½ of the obligation. B. A’s obligation is not revived. D. B cannot collect at all.
Effect of New Debtor’s Insolvency or Non-fulfillment of the Obligation in Delegacion
15. On October 4, 1997, A is indebted to B for P50,000 for a 20-day period. A proposed to B that X will pay A’s debt, and that A will be free from all liabilities. B and X agreed to the proposal. On October 25, 1997, when B tries to collect from X, he finds that X is insolvent. At the time of delegation, X was already insolvent but this was not known to A. The insolvency is not of public knowledge. So B sues A on the ground that it was A who made the proposal and that A really guaranteed X’s solvency. Decide.
A. A is liable because he is pressured to have guaranteed X’s solvency
B. A is not liable, because A does not know the insolvency of X at the time of delegation and neither was the insolvency of public knowledge.
C. A is liable because he did not exercise due diligence in determining the insolvency of X. D. A is liable because X agreed to the proposal to make himself solidary liable for the
obligation
Effect of Novation on Accessory Obligations
Effect where the New Obligation Void; Effect where the New Obligation Voidable Effect where the Old Obligation Void or Voidable
Presumption where Original Obligation subject to a Condition Comprehensive
16. In novation, which of the following is incorrect?
A. If the new obligation is void, original obligation shall subsist.
B. In expromission, the insolvency of the new debtor shall not revive the action of the creditor against the original debtor.
C. If the original obligation is subject to a suspensive condition, the new obligation is not subject to the same condition unless stated
D. While if the condition is resolutory the new is also resolutory condition, unless otherwise stated.
Subrogation (1300-1304) Kinds of Subrogation
Consent of all Parties Required in Conventional Subrogation Cases of Legal Subrogation
Effect of Total Subrogation Effect of Partial Subrogation Comprehensive
5. Which of the following is not a special mode of payment?
B. Cession D. None of the above 7. Which does not result in the extinguishment of obligations?
A. Rescission. C. Arrival of resolutory period.
B. Happening of suspensive condition. D. Compromise. 9. Which statement is correct about extinguishment of obligation?
A. Condonation is generally gratuitous.
B. Prescription is a primary mode of extinguishing an obligation.
C. Agency wherein novation is effected must be in writing and thru a Special Power of Attorney.
D. Confusion or merger rights may occur in the person of a guarantor.
5. On January 15, 2002, D purchased on credit construction materials worth P50,000.00 from the lumber and hardware store owned by C. At maturity date on March 5, 2002, D could not pay despite repeated demand coming from C. X, D’s brother and a good friend of C’s, voluntarily offered to assume his brother’s obligation to the latter as soon as his (X’s) application for a loan is approved by a bank and asked that he be given until April 5, 2002. C accepted the offer of X and agreed to the period. At maturity date, X did not pay C as his application loan was disapproved. Given this scenario, which statement is correct?
A. D’s obligation to C was extinguished by novation thru expromission, and thus, there can be no revival when X did not pay.
B. D’s obligation subsists because the creation of the new obligation of X to C by expromission is subject to a suspensive condition that did not happen.
C. X is liable to C as the new debtor because the former’s assumption of D’s laiability was accepted and consented to by C.
D. D’s obligation was extinguished by a valid delegacion to X. D’’s obligation cannot be revived because there was no showing that X was insolvent and it was of public knowledge.
17. Statement 1: "I promise to pay within 2 years" is an obligation with a period, the creditor having a right to demand payment within 2 years from the date of the instrument.
Statement 2: Ten sacks of corn cannot be compensated (legal compensation) by ten sacks of rice.
A. B. C. D.
Statement 1 True False True False
Statement 2 True False False True
13. Statement 1: Payment by cession does not totally extinguish the whole obligation.
Statement 2: In obligation with penal clauses, it is necessary for the creditor to show proof of actual damages suffered by him on account of the non-performance of the obligation by the debtor.
A. B. C. D.
Statement 1 True False True False
Statement 2 True False False True
26. 1st Statement: The creditor may be compelled to accept payment in checks as long as the check is negotiable
2nd Statement: An obligation payable “should the client die of diabetes” is an obligation subject to a period
A. B. C. D.
1st Statement True False True False
2nd Statement True False False True
24. 1st Statement: In case of extra-ordinary inflation, the basis of payment is the value of the obligation at the time it was constituted
2nd Statement: After substitution, the loss of the principal object through the fault or negligence of the debtor shall render him liable for damages.
A. B. C. D.
1st Statement True False True False
2nd Statement True False False True
17. 1st Statement: Payment made by a third person who does not intend to be reimbursed by the debtor is desired to be a donation, which requires the debtor’s consent. If the debtor’s consent is not given the obligation is not extinguished
2nd Statement: If the debtor’s consent or permission is not given, but the third person paid the creditor his right is to proceed against the creditor for reimbursement and not against the debtor
A. B. C. D.
1st Statement True False True False
2nd Statement True False False True
4. 1st Example – D promised to give C a specific car valued P100,000 after C has killed X. Later after the killing the contract was novated instead of giving C a specific car he will just give a specific land to be delivered on February 28, 1998. Meantime, both parties died. In here, the
heirs of C may compel the execution of the second contract, that is, the delivery of the specific land.
2nd Example – S sold to B a specific residential house situated in Bulacan for P1M, unknown to both parties one (1) hour before the sale, the property was totally gutted by fire caused by electrical defect. In here, B can be required to pay the price of the sale, because the subject is determinate S’s obligation to deliver is extinguished, while B’s obligation remain to subsist.
A. B. C. D.
1st Example True False True False
2nd Example True False False True
9. Statement 1: Just before the obligation became due and demandable, the debtor proposed to the creditor that he would give him a specific car instead of paying P150, 000.00, and which proposal was accepted by the creditor. Here, there is extinguishment of an obligation by way of dacion en pago.
Statement 2: After substitution in facultative obligations, the loss of the principal through the fault or negligence of the debtor shall render him liable for damages in favor of the creditor.
A. B. C. D.
Statement 1 True False True False
Statement 2 True False False True
Comprehensive
1. S and M agreed in print that S, debtor for P3,000, will work as a servant of M without pay until she could find money with which to pay her debt. Meantime, S absconded her obligation and failed to comply with her promise. Under this promise, which of the following statements is correct?
A. The agreement to work as a servant is void because it is immoral
B. To act as a servant without pay is unconstitutional because this is equivalent to involuntary servitude.
C. The obligation to pay is enforceable because this is in accordance with law D. All of the above
71. Which is not correct?
A. A check, even if good when offered, maybe refused by a creditor in satisfaction of his demand because it does not meet the requirements of legal tender
B. The Phil. Peso bills when attempted to be exported, as when carried in excess of that allowed by the Central Bank maybe deemed to have been taken out of domestic circulation as legal tender and thus maybe treated as commodity
C. If the obligation of a debtor is to pay in dollars it shall be discharged in Phil. Currency measured at the prevailing rate of exchange at the time the obligation is incurred
D. Payment of the debtor’s obligation maybe made by a third person even without the knowledge and consent of the debtor
10. D owes C P10,000. X wrote C a letter stating that he would be the one to take care of D’s debt as soon as X had made a shipment of logs to Indonesia. X did not pay C. In this example, which statement is incorrect?
A. Yes, X is liable because there is personal novation of obligation by way of expromission. B. X is not liable because there was no novation as C never consented to the offer of X. C. The offer made by X is subject to a suspensive condition which was not fulfilled, the
liability never became effective. D. None of the above.
1. 1 st Statement: The loss or deterioration of the intended substitute, prior to substitution, through
the negligence of the obligor, shall render him liable for damages. 2 nd Statement: In alternative obligations, all objects are due.
A. B. C. D.
Statement No. 1 True False True False
Statement No. 2 True False False True
20. Statement 1: The creditor may be compelled to accept payment in checks as long as the check is negotiable.
Statement 2: An obligation payable "should the client die of diabetes" is an obligation subject to a period.
A. B. C. D.
Statement 1 True False True False
Statement 2 True False False True
23. 1st Statement: “I promise to pay within 2 years” is not obligation with a period, the creditor having a right to demand payment within 2 years from the date of the instrument
2nd Statement: Ten sacks of corn cannot be compensated (legal compensation) by ten shacks of rice.
A. B. C. D.
1st Statement True False True False
12. 1st Statement: An obligation subject to potestative resolutory condition based on the debtor’
will is void.
2nd Statement: Political agreement wherein FPJ promised not to prosecute CHAVIT’s liability
for graft and corruption if FPJ becomes a president, one day is an unenforceable contract.
A. B. C. D.
1st Statement True False True False
2nd Statement True False False True
1. 1st Statement: An obligation subject to potestative suspensive condition based on the debtor’s
will is void.
2nd Statement: Political agreement wherein Dolphy promised not to prosecute FVR’s liability for
graft and corruption if Dolphy becomes a president, one day is an unenforceable contract.
A. B. C. D.
1st Statement True True False False
2nd Statement True False True False
11. 1st Statement: The defense that a contract is unenforceable is subject to 4 year prescriptive
period.
2nd Statement: In a joint divisible obligation, a joint debtor can be compelled to answer for the
obligation of the other debtor.
A. B. C. D.
1st Statement True True False False
2nd Statement True False True False
zzz
CONTRACT General Provisions Contract Defined (1305)
Meaning of Contract; Contract and Obligation Distinguished; Contract and Agreement Distinguished
Criteria (1306)
Freedom of Contract Guaranteed; Limitations on Contractual Stipulations: Contract must not be Contrary to Law, Contract must not be Contrary to Morals; Contrary must not be Contrary to Good Customs; Contract must not be Contrary to Public Order; Contract must not be Contrary to Public Policy
8. Which of the following is not a valid stipulation?
A. A stipulation that the mortgagor cannot enter into a second mortgage without the consent of the first mortgagee and such violation will make the obligation due and demandable B. A stipulation in chattel mortgage on installment sale where the object sold is mortgaged
back to the seller to answer for the unpaid installments or upon failure to pay any installment due, all installment shall become due and payable, the mortgagee is given the right to foreclose and sell the property at public auction to recover the unpaid balance. C. A stipulation in a mortgage or real property authorizing the mortgagee to have the
mortgaged property sold without the necessity of an action in court. D. None of the above.
Classification (1307)
Classification of Contracts According to its Name or Designation; Kinds of Innominate Contract; Reasons for Innominate Contracts; Rules Governing Innominate Contracts
Contract Binds Both Contracting Parties (1308)
Determination of Performance by a Third Person (1309) Effect where Determination is Inequitable (1310) Persons Affected by a Contract (1311)
Cases when Strangers or Third Persons Affected by a Contract; Meaning of Stipulation Pour Autrui; Classes of Stipulations Pour Autrui; Requisites of Stipulation Pour Autrui
Third Persons are Bound by Contracts; Creating Real Rights (1312) Right of Creditor to Impugn Contracts Intended to Defraud Them (1313) Liability of Third Person for Breach of Contract (1314)
Perfection of Contract (1315-1316)
Classification of Contracts According to Perfection; Stages in the Life of a Contract; How Contracts are Perfected; Effect of Perfection of the Contract;
Unauthorized Contract
Unauthorized Contracts are Unenforceable; Unauthorized Contracts Can be Cured Only by Ratification; When a Person is Bound by the Contract of Another (1317)
Essential Requisites of Contracts Classes of Elements of a Contract (1318)
13. Neither an essential nor accidental element of a contract
A. Cause or consideration C. Warranty against eviction
B. Consent D. Penal cause in a contract
12. Neither an essential nor natural element of a contract
A. Cause or consideration C. Warranty against eviction
B. Consent D. Penal cause in a contract
Consent (1319)
Meaning of Consent; Meaning of Offer; Offer Must be Certain; Meaning of Acceptance; Acceptance of Offer Must be Absolute
4. “Contracts must bind both parties and their efficacy or validity cannot be left to the sole will of any one of them.”
A. Freedom or liberty of contracts C. Relativity of Contracts B. Consensual nature of contracts D. Mutuality of Contracts Form of Acceptance of Offer (1320)
Matters that May be Fixed by the Offerer (1321) Communication of Acceptance to Agent (1322)
When Offer Becomes Ineffective; Other Ground Which Render Offer Ineffective (1323)
Meaning of Contract of Option; Option Period; Option Money; Withdrawal of Offer Where Period Stipulated for Acceptance; Articles 1324 & 1479 Compared (1324)
Business Advertisements Generally Not Definite Offers (1325) Advertisements for Bidders Generally Not Definite Offers (1326)
Capacity to Given Consent Presumed; Persons Who Cannot Given Consent; Reason for Disqualification (1327)
Contracts Entered into During a Lucid Interval (1328)
Effect of Drunkenness and Hypnotic Spell (1328)
Incapacity Declared in Art. 1327 Subject to Modifications; Other Special Disqualifications May be Provided by Law (1329)
Characteristics of Consent; Vices of Consent; Causes Vitiating Consent and Causes of Incapacity Distinguished (1330)
Meaning of Mistake or Error; nature of Mistake; Mistake of Fact to which Law Refers; Mistake of Fact Which Does Not Vitiate Consent; Effect of Simple Mistake of Account (1331)
Burden of Proof in Case of Mistake or Fraud (1332) Effect of Knowledge of Risk (1333)
Meaning of Mistake of Law; Effect of Mistake of Law; When Mistake of Law Vitiates Consent; Requisites for the Application of Art. 1334
Nature of Violence or Force (1335)
Nature of Intimidation or Threat; Factors to Determine Degree of Intimidation; Threat to Enforce Just or Legal Claim
Violence or Intimidation by a Third Person (1336)
Meaning of Undue Influence; Circumstances to be Considered (1337)
Meaning of Causal Fraud; How Causal Fraud Committed; Requisites of Causal Fraud (1338) Fraud by Concealment (1339)
Usual Exaggerations in Trade (1340) Expression of Opinion (1342) Fraud by a Third Person (1342)
Two Kinds of Fraud in the Making of Contract; Causal Fraud Must be Serious and Unilateral. (1344)
Meaning of Simulation of a Contract; Kinds of Simulation (1345 – 1346) Comprehensive
27. 1st Statement: A threat to enforce one’s claim through competent authority, if the claim is just or legal, does not vitiate consent
2nd Statement: Contracts entered into during a lucid interval are valid. Contracts agree to in a state of drunkenness or during a hypnotic spell are binding
A. B. C. D.
1st Statement True False True False
2nd Statement True False False True
Objects of Contracts (1347 – 1348)
Concept of Object of a Contract; Kinds of Object of Contract; Requisites of Things as Object of Contract; Requisites of Services as Object of Contract; Rights as Object of Contract(1347 – 1348) Definition of Future Inheritance; Validity of Contracts upon Future Inheritance; Kinds of Impossibility
Quantity of Object of Contract Need not be Determinate Cause of Contracts
Meaning of Cause; Cause Distinguished from Object; Classification of Contracts Accounting to Cause (1350)
Meaning of Motive; Cause Distinguished from Motive (1351)
Requisites of Cause; Effect of Absence of Cause; Effect of Failure of Cause; Effect of Illegality of Cause; Effect of Falsity of Cause (1352 – 1353)
Cause Presumed to Exist and Lawful (1354)
28. In a contract, as written, D promises to pay C P10,000 on September 15, 1997. The consideration received by D is not stated in the contract.
A. The contract is valid because the cause is always presumed to exist B. The contract is valid so long as it is in writing
C. The contract is valid because cause is not essential to a contract D. The contract is void because cause is not stated
Meaning of Lesion; Effect of Lesion or Inadequacy of Cause (1355) Form of Contracts
Form of Contracts Defined (1356)
Meaning of Form of Contracts; When Contract Considered in Written Form; Classification of Contracts According to Form; Rules Regarding Form of Contracts; Form for Validity of Contract; Form for Enforceability of Contract
11. Which of the following contracts is enforceable even if not reduced in writing. A. Representation as to the credit of a third person
B. Agreement for the sale of immovable property C. Contract executed by one of the parties in a contract D. Lease of immovable for a period longer than one year Form for the Convenience of the Parties (1357)
Contracts Which Must Appear in a Public Document (1358) Reformation of Instruments
Meaning of Reformation; Reason for Reformation; Requisites of Reformation; Reformation Distinguished from Annulment (1359)
Principles of the General Law on Reformation (1360) Mutual Mistake as Basis for Reformation (1361)
Mistake on One Side, Fraud or Inequitable Conduct on the Other (1362) Concealment of Mistake by the Other Party (1363)
Ignorance, etc. on the Part of Third Person (1364) Mortgage or Pledge Stated as a Sale (1365) Cases when Reformation Not Allowed (1366 – 1367) Party Entitled to Reformation (1368)
Procedure for Reformation (1369) Interpretation of Contracts Interpretation of Contracts (1370)
Meaning of Interpretation of Contracts; Literal Meaning Controls when Language Clear; Evident Intention of Parties Prevails over Terms of Contract
Contemporaneous and Subsequent Acts Relevant in the Determination of Intention (1371) Special Intent Prevails over a General Intent (1372)
Interpretation of Stipulation with Several Meanings (1373) Interpretation of Various Stipulations of a Contract (1374) Interpretation of Words with Different Significations (1375) Resort to usage or Custom as Aid in Interpretation (1376) Interpretation of Obscure Words (1377)
Rules in Case Doubts Impossible to Settle (1378)
Principles of Interpretation in the Rules of Court Applicable (1379) Comprehensive (1370 – 1379)
Rescissible Contracts
Rescissible Contracts Defined (1380)
Meaning of Rescissible Contracts; Binding Force of Rescissible Contracts; Meaning of Rescission; Requisites of Rescission
Cases of Rescissible Contracts (1381)
12. D is indebted to C in the sum of P10,000. For the purpose of avoiding the claims of C, D donated all his properties worth the same amount to X.
A. The contract is absolutely simulated C. The contract is merely voidable B. The contract is rescissible D. The contract is void
12. In which case is the right of rescission not available?
A. The ability to restore what he has received by virtue of the contract.
B. The property must have passed to the hands of a third person who bought the same in good faith and for value.
C. Bought within the proper prescriptive period. D. None of the above.
Payments Made in a State of Insolvency (1382) Nature of Action for Rescission (1383)
Extent of Rescission (1384)
Rescission Creates Obligation of Mutual Restitution; Obligation of Third Person to Restore; When Rescission Not Allowed (1385)
Contracts Approved by the Courts (1386)
When Alienation Presumed in Fraud of Creditors; Circumstances Denominated as Badges of Fraud (1387)
Liability of Purchases in Bad Faith (1388)
Period for Filing Action for Rescission; Persons Entitled to Bring Action (1389) Voidable Contracts
Voidable Contracts Defined (1390)
Meaning of Voidable Contracts; Binding Force of Voidable Contracts; Meaning of Annulment Period for Filing Action for Annulment (1391)
Meaning and Effect of Ratification (1392)
8. In three of the following defective contracts, ratification cleanses the defects. Which is not susceptible of ratification?
A. Both parties are incapable of giving consent
B. Sale of land thru an agent where the authority is orally given C. Sale of immovable or any interest therein orally entered into D. Contracts entered into by a person who has been given no authority
Kinds of Ratification; Requisites of Ratification (1393) Who May Ratify? (1394)
Conformity of Guilty Party to Ratification Not Required (1395) Effect of Ratification Retroactive (1396)
Partly Entitled to Bring an Action to Annul; Right of Strangers to Bring Action; Guilty Party Without Right to Bring Action (1397)
Duty of Mutual Restitution Upon Annulment (1398) Restitution by an Incapacitated Person (1399) Effect of Loss of Thing to be Returned (1400) Extinguishment of Action for Annulment (1401)
Effect Where a Party Cannot Restore What He is Bound to Return (1402) Unenforceable Contracts
Unenforceable Contracts Defined (1403)
Meaning of Unenforceable Contracts; Binding Force of Unenforceable Contracts; Kinds of Unenforceable Contracts; Meaning of Unauthorized Contracts; Statute of Frauds; Agreements Within the Scope of the Statute of Frauds)
Modes of Ratification Under the Statute (1404 – 1405) Right of a Party Where Contract Enforceable (1406)
When Unenforceable Contract Becomes a Voidable Contract; When Unenforceable Contract Becomes a Valid Contract (1407)
Right of Third Persons to Assail an Unenforceable Contract (1408) Void or Inexistent Contracts
Void or Inexistent Contracts Defined (1409)
Meaning of Void Contracts; Meaning of Inexistent Contracts; Characteristics of a Void or Inexistent Contract; Instances of Void or Inexistent Contracts
13. One is a void and inexistent contract.
A. Those which are absolutely simulated or fictitious. B. Those which are outside the commerce of man. C. Those contrary to law.
D. Those which contemplate an impossible service. 14. The following, except one, are void or inexistent contracts.
A. Those which are absolutely simulated for fictitious. B. Those which are outside the commerce of man.
C. Those whose cause or object did not exist at the time of transaction. D. Those which contemplate a very difficult service.
13. The following, except one, are void or inexistent contracts. Which is it? A. Those which are absolutely simulated or fictitious.
B. Those which are outside the commerce of man.
C. Those whose cause or object did not exist at the time of transaction. D. Those which contemplate a possible service.
11. A, a person of legal age and an agent of X, sold 10 grams of shabu to B who is a minor of 16 years. The shabu was sold for P600 which is actually less than its actual market value of P1,000 thereby incurring a loss of P400 on the part of X. Worse, the contract of sale was not reduced into writing. What is the status of the contract?
A. The contract of sale is voidable because one party is a minor. B. The contract is rescissible because of lesion.
C. The contract is unenforceable considering it was orally done. D. The contract is void.
9. The following are void contracts. Which is the exception?
A. an agreement that will compel x to work for Y without compensation until the latter’s debt is fully paid;
B. an agreement where married man X would have carnal knowledge with the single and beautiful Y for a consideration of P5,000;
C. a provision in the lease agreement that will enable the lessor to sue for ejectment against the lessee in case of nonpayment of rentals;
consideration of P1 Million Action or Defense is Imprescriptible (1410)
Rules Where Contract is Illegal and the Act Constitutes a Criminal Offense (1411)
Rules Where Contract is Illegal But the Act Does Not Constitute a Criminal Offense (1412) Recovery of Usurious Interest (1413)
Recovery Where Contract Entered into for Illegal Purpose (1414) Recovery by an Incapacitated Person (1415)
Recovery Where Contract Not Illegal per se (1416) Recovery of Amount Paid in Excess of Ceiling Price (1417)
Recovery of Additional Compensation for Service Rendered Beyond Time Limit (1418) Recovery of Amount of Wage Less Than Minimum Fixed (1419)
Effect of Illegality Where Contract Indivisible/Divisible; Divisible Contract Distinguished from Divisible Obligation (1420)
Persons Entitled to Raise Defense of Illegality or Nullity (1421) Void Contract Cannot be Novated (1422)
Natural Obligations Natural Obligations (1423)
Concept of Natural Obligations; Civil and Natural Obligations Distinguished; Enumeration Not Exclusive
Performance After Civil Obligation Has Prescribed (1424)
Reimbursement of Third Person for Debt that has Prescribed (1425)
Restitution by Minor After Annulment of Contract (1426)
Delivery by Minor of Money or Fungible Thing in Fulfillment of Obligation (1427) Performance After Action to Enforce Civil Obligation has Failed (1428)
Payment by Heir of Debt Exceeding Value of Property Inherited (1429) Payment of Legacy After Will Has Been Declared Void (1430)
Comprehensive
9. “Mutual promise to marry” between would-be husband and wife, orally entered into is A. A validable contract C. Unenforceable contract
B. A void contract D. None of the above
5. Which of the following is the most defective contract among the following?
A. A and B both minor entered into a contract of sale involving chocolate worth P400. B. Contract of sale wherein a car worth P1M is contributed but not reduced in a public
instrument.
C. A contract of sale wherein one party sold to the other his hereditary rights under the pain of being raped.
D. A compromised agreement between two government officials to settle an ANTI-GRAFT CASE
5. Which is the most defective contract among the following?
a. A & B, both minors entered into a contract of sale involving chocolate worth P400. b. Contract of partnership wherein a car worth P1M is contributed but not reduced in a public
instrument.
c. A contract of sale wherein one party sold to the other his hereditary rights under the pain of being raped.
d. A compromise between Senator Lacson and Pre. GMA to hide the evidence against Jose Pidal, to achieve peace and reconciliation for the country.
7. S agreed to sell B 100 cases of napkins with the name of B’s restaurant on the napkins. In the enforceable contract, it was specified that delivery will take place on April 15, 2000 which is one (1) month after S and B signed the contract. B wanted the napkins by April 15 because the grand opening of the restaurant was scheduled for April 17. On April 11, S tells B that the has too many orders and will not be able to deliver the napkins. What options does B have?
