2 - Contracts

SML

Normani entered into a contract with Camila whereby Camila will construct Normani's house for a service fee of P2,000,000. Subsequently, Camila changed the terms, and asked Normani to pay P3,000,000, citing unforeseen challenges in accomplishing the house. Camila presented two medical certificates citing that two out of her five workers got sick, and she was forced to hire another personnel and pay higher wages. Is Camila's action of asking P3,000,000 from Normani justified?

a. No. It violates the mutuality of contracts.

b. No because Normani was not informed beforehand.

c. Yes. This is a form of novation of obligation.

d. Yes. This is in consonance with the autonomy of contracts.

a. No. It violates the mutuality of contracts.

Perrie entered into a contract with Leigh-Anne. It was agreed that Perrie will deliver three (3) chickens per month for 20 years to Leigh-Anne in exchange for Leigh-Anne's 1,000 square meter parcel of land. The contract was entered into in writing. Is the contract valid?

a. No, because it is not payable in a price certain in money.

b. No, because the contract is not contained in any public instrument.

c Yes, because the market value of three (3) chickens per month for 20 years is equivalent to the market value of the parcel of land.

d. Yes, because there is a meeting of the minds, and they have the autonomy to set stipulations.

d. Yes, because there is a meeting of the minds, and they have the autonomy to set stipulations.

Statement 1: A stipulation of pactum commissorium in a contract is void.

Statement 2: A loan contract without any stipulation as to interest is void.

a. Only Statement 1 is true.

b. Only Statement 2 is true.

c. Both statements are true.

d. Both statements are not true.

a. Only Statement 1 is true.

Megan and Beyonce entered into a contract whereby Megan bound herself to deliver 5,000 liters of milk to Beyonce for P2,000,000. Cardi, Beyonce's competitor in the cheese industry, gained knowledge of this contract and she induced Megan to deliver milk of inferior quality. Megan delivered milk of inferior quality which caused Beyonce to be entangled into a lawsuit with customers because of spoiled cheese. Beyonce discovered that the spoilage of the cheese was due to Megan delivering milk of inferior quality as induced by Cardi. Beyonce sued Megan and Cardi for damages. Will the case against Cardi prosper?

a. Yes, because she interfered with the contract between Megan and Beyonce.

b. Yes, but only if she was able to obtain the milk that should have been delivered to Beyonce.

c. No, because it violates the principle of relativity of contracts considering that she is not a party to the contract

d. No, because milk was still delivered to Beyonce

a. Yes, because she interfered with the contract between Megan and Beyonce.

As a general rule, when are contracts perfected?

a. When an offer is made

b. Upon acceptance of the offer

c. When preparations as to the execution of the transaction are made

d. When both parties fulfill their obligations

b. Upon acceptance of the offer

Which of the following is a solemn contract?

a. Contract to deliver 500 pieces of wood to a church

b. Contract of sale of twenty kilos of rice

c. Contract of donation involving real property

d. Contract of guaranty

c. Contract of donation involving real property

It is a contract where there is no correlative prestation received by the other party.

a. Remuneratory contract

b. Gratuitous contract

c. Consensual contract

d. Special contract

b. Gratuitous contract

An insurance contract is an example of:

a. Onerous, nominate, and aleatory contract

b. Onerous, nominate, and commutative contract

c. Gratuitous, nominate, and aleatory contract

d. Gratuitous, nominate, and commutative contract

a. Onerous, nominate, and aleatory contract

This is the stage of contract when the parties perform their obligations under the contract.

a. Preparation

b. Conception

c. Perfection

d. Consummation

d. Consummation

Statement 1: Acceptance must be qualified in order to perfect a contract.

Statement 2: Acceptance of business advertisements of things for sale perfects a contract

a. Only Statement 1 is true.

b. Only Statement 2 is true.

c. Both statements are true.

d. Both statements are not true.

d. Both statements are not true.

Jill Ilustre offered to sell to Maya Dela Rosa pieces of jewelry at a price of P500,000. Jill resides in Cebu while Maya resides in Davao. The pieces of jewelry are in Vigan. Through sending a letter, Maya intimated her acceptance of the offer. Jill received the letter of acceptance. Jill delivered the pieces of jewelry from Vigan to Davao. Maya made the payment when they met in Tagaytay. Where is the contract deemed perfected?

a. Cebu

b. Davao

c. Vigan

d. Tagaytay

a. Cebu

Pablo offered to sell to Stell various wearing apparel at a price of P200,000 on Monday. Stell was able to receive the offer on Tuesday. On Wednesday, he decided to accept the offer and wrote a letter to that effect. On that day, he sent the letter of acceptance to Pablo. Pablo was able to receive the letter on Thursday, but since she was busy that day, he was only able to read the letter on Friday. When was the contract of sale perfected?

a. Monday

b. Wednesday

c. Thursday

d. Friday

d. Friday

Josh offered to sell to Ken fruits at a price of 50,000. Ken had reservations, and he informed Josh that he will instead buy the fruits at a price of P40,000. Josh did not reply. A week after, Ken learned that Josh was able to sell the fruits for P38,000 to another person. Ken sued Josh for breach of contract. Will Ken suit prosper?

a. Yes, because Josh's silence constitutes an implied acceptance of Ken' offer to buy at P40,000

b. Yes, because the act of Josh ignoring Ken' offer is tainted with bad faith, considering that she subsequently sold the fruits at a lower price.

c. No, because by the nature of the object of the contract, they are perishable, and they must be sold promptly.

d. No, because no contract was perfected.

d. No, because no contract was perfected.

Which phrase is the most accurate to complete the statement: Deaf-mutes who do not know how to are incapacitated to give consent.

a. Read

b. Write

c.Read or write

d. Read and write

d. Read and write

Which of the following is a valid contract?

a. A contract to buy 1,000 square meters on the surface of the Sun for P1,000,000

b. A contract whereby one undertakes to pay P1,000,000 if a commercial space travel will be available in the future.

c. A contract whereby one sells P500,000 his share in the inheritance of one of his parents who has not died yet.

d. A contract whereby one sells his spousal rights for two nights for P500,000.

b. A contract whereby one undertakes to pay P1,000,000 if a commercial space travel will be available in the future.

As a general rule, contracts are obligatory in:

a. Whatever form

b. When entered into in writing

c. When entered into in a private instrument

d. When entered into in a public instrument

a. Whatever form

Which of the following contracts, if entered into orally, is valid?

a. Donation of a building

b. Donation of a parcel of land

c. Contract of agency to sell land

d. Contract to deliver a horse for valuable consideration after two years

d. Contract to deliver a horse for valuable consideration after two years

Donation of movables should be:

a. In writing

b. In a public instrument

c. In writing, only if the value of the donated property exceeds P5,000

d. In a public instrument, only if the value of the donated property exceeds P5,000

c. In writing, only if the value of the donated property exceeds P5,000

A representation as to the credit made by a third person shall be in writing. Otherwise, the contract is:

a. Void

b. Valid, but unenforceable.

c. Valid, but will not bind third persons.

d. Valid, but voidable.

b. Valid, but unenforceable.

S sold to B a parcel of land located in Cotabato at a price of P500 per square meter. The contract was entered into in a handwritten contract and was not notarized. B paid the price for the land, and they signed the handwritten Deed of Absolute Sale. However, upon presentation to the Registry of Deeds of Cotabato, it was not accepted. The office demanded that the Deed of Absolute Sale be in a public instrument. B went back to S and asked him if they can execute another Deed in the form required by the Registry of Deeds. S refused. Can B compel S to do so?

a. No. There was no valid agreement in the first place considering that the required form for its validity

b. No. The contract is already valid without the necessity of putting it in a public instrument.

c. Yes. B may compel S to execute a public instrument to be able to bind third persons.

d. Yes. B may compel S to execute a public instrument in order to give the

c. Yes. B may compel S to execute a public instrument to be able to bind third persons.

Before reformation can be had on an instrument:

a. There must be a valid contract with no defect as to the meeting of the minds of the parties.

b. There must be a vitiation of consent which is the subject of

reformation.

c. There must be a defect which will render the contract unenforceable.

d. There must be ambiguity in the intention of the parties to enter into a contract.

a. There must be a valid contract with no defect as to the meeting of the minds of the parties.

Which of the following instances of fraud would the remedy of reformation be availing?

I. Fraud employed by the party drafting the contract by inserting provisions in very fine print prior to signing

II. Fraud employed by the party in performing his obligation, i.e., what was supposed to be delivered is 1,000 sacks of flour but the obligor mixed flour with sand for volume.

III. Fraud employed by the party in enticing the other party to enter into the contract, e.g., telling a potential customer that what is being sold is an authentic painting by Van Gogh when it is just an imitation.

a. I only.

b. I and Il only.

c. I and III only.

d. I, II, and Ill.

a. I only.

When availing of the remedy of reformation:

a. The aggrieved party wants the contract to be annulled.

b. The aggrieved party wants the other party to re-enter into negotiations.

c. The aggrieved party wants to enforce the contract in accordance with their agreement.

d. The aggrieved party wants to cure the defect in the consent of the other party.

c. The aggrieved party wants to enforce the contract in accordance with their agreement.

Statement 1: If the mistake is mutual, the remedy of reformation is not available.

Statement 2: If the aggrieved party in a contract dies, his heirs can ask for the reformation of the instrument assuming the deceased aggrieved party is entitled to the remedy.

a. Only Statement 1 is true.

b. Only Statement 2 is true.

c. Both statements are true.

d. Both statements are not true.

b. Only Statement 2 is true.

Which of the following contracts cannot be reformed?

a. A partially executed contract of loan.

b. A contract of simple donation.

c. A real contract of pledge.

d. A contract of sale of real property entered into in a private instrument.

b. A contract of simple donation.

An instrument with the caption "Contract of Sale" was entered into by A and B. Pursuant to the terms of the contract, A gave P100,000 to B, and B gave the keys of his car to A upon the condition that A will return the keys of his car if B will be able to return the P100,000. A gave him. The contract is:

a. A contract of sale. b. A contract of mortgage.

c. A contract of pledge.

d. A contract of barter.

c. A contract of pledge.

Statement 1: A rescissible contract is a valid contract.

Statement 2: A rescissible contract's defect lies in the vitiation of consent of one of the contracting parties

a. Only Statement 1 is true.

b. Only Statement 2 is true.

c. Both statements are true.

d. Both statements are not true.

a. Only Statement 1 is true.

This is the injury which one of the parties suffers by virtue of a contract which is disadvantageous for him:

a. Damage

b. Lesion

c. Vitiation

d. Invalidity

b. Lesion

Accion pauliana is a remedy availed of by:

a. A ward who suffered lesion.

b. An absentee who suffered lesion

c. A creditor who was defrauded

d. A minor who was defrauded

c. A creditor who was defrauded

A contract entered into by guardians is rescissible whenever the wards whom they represent suffer lesion:

a. by more than one-half of the value of the things which are the object thereof

b. by more than one-third of the value of the things which are the object thereof

c. by more than one-fourth of the value of the things which are the object thereof

d. by more than one-fifth of the value of the things which are the object thereof

c. by more than one-fourth of the value of the things which are the object thereof

Mr. B, representing his mother, Mrs. A, who was judicially declared as an absentee; was authorized by the court to enter into a contract of sale for a parcel of land with fair market value of P10,000,000. This is in order to support the daily expenses of the Mr. B and his siblings in the absence of their mother. Despite the selling price being P7,000,000, the sale was approved by the court. Two years later, Mrs. A reappeared and discovered that the property was sold at such inadequate price. Can Mrs. A rescind the contract of sale?

a. No, because she is not a party to the contract.

b. No, because the sale was judicially authorized.

c. No, because the sale was intended for the daily expenses of her children and has therefore, redounded to her family's benefit.

d. No, because the lesion is not more than one-third of the value of the land.

b. No, because the sale was judicially authorized.

Statement 1: Insolvency of the debtor is required before the creditor can avail of the remedy of accion pauliana.

Statement 2: Payment by a person in a state of insolvency for obligations to whose fulfillment is due and compellable at the time they were effected are rescissible.

a. Only Statement 1 is true.

b. Only Statement 2 is true.

c. Both statements are true.

d. Both statements are not true.

d. Both statements are not true.

There is a presumption of fraud when:

a. Alienation by gratuitous title if the debtor has not reserved sufficient property to pay all of his debts contracted before alienation

b. Alienation by onerous title if the debtor has not reserved sufficient property to pay all of his debts contracted before alienation

c. Alienation by gratuitous title if the debtor has reserved sufficient property to pay all of his debts contracted before alienation

d. Alienation by onerous title if the debtor has reserved sufficient property to pay all of his debts contracted before alienation

a. Alienation by gratuitous title if the debtor has not reserved sufficient property to pay all of his debts contracted before alienation

Which of the following will generally not vitiate consent?

a. Violence

b. Intimidation

c. Mistake of law

d. Causal fraud

c. Mistake of law

Mr. C pointed a gun to Mr. D and made Mr. D sign a contract of loan amounting P2,000,000. Mr. C told Mr. D that if he will not lend Mr. C P2,000,000, Mr. C will pull the trigger. After knowing this, Mr. D's friend, Mr. E, sought to annul the contract of loan on the ground that it is voidable. If you were the judge, would you annul the contract of loan?

a. No, the contract is perfectly valid. There is no vitiation of consent.

b. No, Mr. E is not the correct person to file the action for annulment of the contract of loan.

c. Yes, the employment of violence vitiated the consent of the debtor.

d. Yes, considering the amount of the loan involved, annulment is an equitable remedy.

b. No, Mr. E is not the correct person to file the action for annulment of the contract of loan.

Mr. C pointed a gun to Mr. D and made Mr. D sign a contract of loan amounting P2,000,000. Mr. C told Mr. D that if he will not lend Mr. C P2,000,000, Mr. C will pull the trigger. The contract of loan likewise stipulated the payment of interest at the rate of 10% per annum. Upon due date, Mr. C is unable to pay the loan. Aggrieved, Mr. D went to court and sued Mr. C demanding the payment of P2,000,000 plus interest. Mr.

C contended that the contract of loan should not bind them, considering that Mr. D's consent was vitiated. If you were the judge, to whom would

you rule in favor of?

a. I will rule in favor of Mr. C, considering that Mr. D has no standing to seek for annulment of the contract.

b. I will rule in favor of Mr. C up to the extent of P2,000,000. However, Mr. C cannot collect the interest considering that the contract is voidable.

c. I will rule in favor of Mr. D. The contract is voidable due to the violence

d. I will rule in favor of Mr. D. The contract is unenforceable in courts considering that it has not been partially executed

a. I will rule in favor of Mr. C, considering that Mr. D has no standing to seek for annulment of the contract.

What is the effect of loss of the object of a voidable contract due to the fault or fraud on the part of the person whose consent is vitiated?

a. The voidable contract is convalidated.

b. The voidable contract can still be annulled.

c. The voidable contract can still be annulled but within a shorter period of one (1) year.

d. The contract becomes void.

a. The voidable contract is convalidated.

If the ground for prescription is the fraud employed by one of the contracting parties, then the prescriptive period to file the action for annulment is:

a. Two (2) years from the time fraud was committed.

b. Two (2) years from the time of the discovery of the fraud.

c. Four (4) years from the time fraud was committed.

d. Four (4) years from the time of the discovery of the fraud.

d. Four (4) years from the time of the discovery of the fraud.

Statement 1: Ratification of a voidable contract has a retroactive effect.

Statement 2: Ratification of a voidable contract by reason of any vice of consent requires the conformity of the other contracting party whose consent is not vitiated.

a. Only Statement 1 is true.

b. Only Statement 2 is true.

c. Both statements are true.

d. Both statements are not true.

a. Only Statement 1 is true.

A and B are both minors, and they entered into a written contract of loan for P10,000. What is the status of the contract?

a. Void

b. Voidable

c. Unenforceable

d. Perfectly valid

c. Unenforceable

A and B are both minors, and they entered into a written contract of loan for P10,000. Subsequently, A turned 18 years of age, and he reminded B, who is still 17 years old, of his obligation under the contract of loan. What is the status of the contract?

a. Void

b Voidable

c. Unenforceable

d. Perfectly valid

b Voidable

The statute of frauds primarily deals with:

a. The required consent of the parties

b. Capacity to enter into contracts by the contracting parties

c. The form of contracts

d. The manner of notice to be provided to contracting parties

c. The form of contracts

Which of the following contract is not covered by statute of frauds?

a. A contract of guaranty

b. A contract of sale of goods amounting to P635.00

c. A lease of a car for a period of fifteen (15) months

d. A construction of a house to be done in thirteen (13) months

c. A lease of a car for a period of fifteen (15) months

Statement 1: The defense of statute of frauds can be raised by third persons who are not parties to the contract.

Statement 2: Contracts infringing the statute of frauds are not void, they are merely unenforceable.

a. Only Statement 1 is true.

b. Only Statement 2 is true.

c. Both statements are true.

d. Both statements are not true.

b. Only Statement 2 is true.

Mr. A, representing himself as agent of Mr. C, entered into a contract of loan with Mr. B amounting to P1,000,000. As against Mr. C, the contract is:

a. Perfectly valid.

b. Voidable.

c. Void.

d. Unenforceable.

d. Unenforceable.

Void contracts:

a. Can be ratified to be valid, but prescription will never confer validity

b. Can prescribe to be valid, but ratification will never confer validity

c. Can be ratified and can prescribe to be valid

d. Cannot be ratified and cannot prescribe to be valid

d. Cannot be ratified and cannot prescribe to be valid

Which of the following is a void contract?

а. Relatively simulated contracts.

b. Absolutely simulated contracts.

c. Both relatively simulated contracts and absolutely simulated contracts

d. Neither relatively simulated contracts nor absolutely simulated contracts

b. Absolutely simulated contracts.

Which of the following is not a void contract?

a. A contract to sell a parcel of lot located in the Moon.

b. A contract to sell illegal drugs

c. A contract to sell a parcel of land where the stated price is P2,000,000, but in fact, no price was paid

d. A contract of sale between spouses

c. A contract to sell a parcel of land where the stated price is P2,000,000, but in fact, no price was paid

A contract involving the payment of money or delivery of property for an illegal purpose, what is the effect where the party who paid or delivered repudiates the contract before the purpose has been accomplished, or before any damage has been caused to a third person?

a. The repudiating party may be allowed to recover money or property.

b. The repudiating party may not be allowed to recover money or property.

c. The non-repudiating party may be allowed to keep the money or property.

d. The court will leave them as is pursuant to the principle of in pari delicto.

a. The repudiating party may be allowed to recover money or property.

Statement 1: A contract which is the direct result of a previous illegal contract is also void and inexistent.

Statement 2: In case of a divisible contract, if the illegal terms can be separate from the legal ones, the latter may be enforced

a. Only Statement 1 is true.

b. Only Statement 2 is true.

c. Both statements are true.

d. Both statements are not true.

c. Both statements are true.