LAW ON SALES True or False Questions - 50 Items

A vendee can be compelled to accept delivery of goods by installments even without prior agreement.

FALSE - Unless otherwise agreed, the buyer is not bound to accept delivery by installments.

Express acceptance occurs when a buyer verbally or in writing intimates to the seller that goods have been accepted.

TRUE - Express acceptance requires explicit communication to the seller.

If a buyer retains goods for a reasonable time without rejecting them, this constitutes implied acceptance.

TRUE - Retention without rejection after reasonable time implies acceptance.

A buyer who has not previously examined goods is deemed to have accepted them immediately upon delivery.

FALSE - The buyer must have reasonable opportunity to examine goods before acceptance is deemed.

When a buyer refuses non-conforming goods, he is obligated to return them to the seller at his own expense.

FALSE - The buyer is not bound to return refused goods; notification of refusal is sufficient.

A vendee is liable for interest only when it has been expressly stipulated in the contract.

FALSE - Liability for interest also arises when goods produce income or when buyer is in default after demand.

A vendee can suspend payment if he has well-grounded fear of disturbance in ownership by foreclosure proceedings.

TRUE - This is one of the recognized grounds for suspension of payment.

Under the Recto Law, a seller has only one remedy when a buyer defaults on installment payments.

FALSE - The Recto Law provides three alternative remedies to the seller.

A chattel mortgage can be foreclosed only after the vendee fails to pay three or more installments.

FALSE - Foreclosure is allowed after failure to pay two or more installments.

Under the Maceda Law, a buyer who paid for less than two years gets a grace period of one month for every year paid.

FALSE - Buyers who paid less than two years get a fixed 60-day grace period.

The cash surrender value under Maceda Law is always 50% of total payments made regardless of payment period.

FALSE - It's 50% base rate that increases by 5% for every year beyond 5 years.

Automatic cancellation clauses upon buyer's default are valid under the Maceda Law.

FALSE - Such clauses are specifically listed as void stipulations.

Under the Condominium Act, buyers have a right to suspend payments if the developer fails to deliver amenities.

TRUE - This is one of the recognized rights under the Condominium Act.

An unpaid seller loses his right of lien once he parts with possession of the goods.

FALSE - He still has the right of stoppage in transit if the buyer becomes insolvent.

Perishable goods can be resold by the seller without any specific conditions.

FALSE - The right of resale exists for perishable goods, but it's still subject to legal requirements.

In conventional redemption, the vendor can reserve the right to repurchase for any period of time.

FALSE - The period cannot exceed ten years when agreed upon.

When no redemption period is specified in a pacto de retro sale, the default period is five years.

FALSE - The default period is four years from the date of contract.

A transaction will be presumed as equitable mortgage if the vendor remains in possession as lessee.

TRUE - This is one of the circumstances creating presumption of equitable mortgage.

In equitable mortgage, the proper remedy for the creditor is to foreclose the mortgage, not consolidate ownership.

TRUE - Foreclosure is the proper remedy, not automatic consolidation.

The vendor a retro must pay the vendee for necessary expenses made on the property during the redemption period.

TRUE - This is one of the obligations of the vendor a retro upon redemption.

Legal redemption must be exercised within sixty days from written notice by the vendor.

FALSE - The period is thirty days from written notice.

In co-ownership, any co-owner can exercise legal redemption even if the sale was made to another co-owner.

FALSE - No redemption right exists when the sale is made to a co-owner.

Co-heirs have one month to exercise legal redemption after being notified of a sale to a stranger.

TRUE - The period is one month from written notification.

The right of legal redemption among adjoining owners applies only to rural land, not urban land.

FALSE - Both rural and urban land have redemption rights, but with different requirements.

For urban land redemption, the land must be so small that it cannot be used for practical purposes.

TRUE - This is one of the requirements for urban land legal redemption.

In assignment of credit, the assignor always warrants the solvency of the debtor.

FALSE - Solvency is warranted only when expressly stipulated or when insolvency was prior to sale and of common knowledge.

A debtor can redeem an assigned credit in litigation by paying only the price the assignee paid.

FALSE - The debtor must pay the price, judicial costs, and interest from the date of payment.

Assignment of credit to a creditor in payment of debt is exempt from legal redemption by the debtor.

TRUE - This is one of the recognized exceptions to legal redemption.

If a buyer constitutes himself a voluntary depositary of rejected goods, he becomes liable as such.

TRUE - Voluntary assumption of depositary role creates corresponding liability.

A seller can demand specific performance and rescind the sale simultaneously when the buyer fails to pay.

FALSE - These are alternative remedies; the seller must choose one.

Under Maceda Law, buyers who paid for exactly two years are entitled to a 24-month grace period.

TRUE - The formula is one month for every year of installment payments made.

Interest or penalty charges during the grace period are valid under Maceda Law.

FALSE - Such stipulations are specifically declared void.

A condominium developer can constitute mortgages on the unit after sale without buyer's consent.

FALSE - This requires the buyer's written consent and is grounds for cancellation if done without it.

An unpaid seller can exercise the right of resale when the buyer defaults for an unreasonable time.

TRUE - This is one of the conditions allowing exercise of the right of resale.

In pacto de retro involving undivided property, the vendor can be compelled to redeem the entire property.

TRUE - When the vendee of part acquires the whole, the vendor may be compelled to redeem all.

The consolidation of ownership in pacto de retro can be recorded without judicial order.

FALSE - A judicial order is required after the vendor has been duly heard.

Legal redemption can be exercised even after the deed of sale has been recorded in the Registry of Property.

TRUE - However, the deed should be accompanied by an affidavit of notice to redemptioners.

Rural land subject to legal redemption must not exceed five hectares.

FALSE - The limit is one hectare, not five.

In assignment of credit, the debtor has thirty days from the assignee's demand to exercise legal redemption.

TRUE - This is the prescribed period for exercising the right.

A buyer's right to examine goods can be waived by express stipulation in the contract.

TRUE - The right exists "if there is no stipulation to the contrary."

Mere acts of trespass justify suspension of payment by the vendee.

FALSE - Mere trespass doesn't justify suspension since ejectment can remedy it.

The Recto Law applies to both real and personal property sold on installment.

FALSE - The Recto Law applies specifically to personal property.

Under Maceda Law, the right to assign or sell the property exists for all buyers regardless of payment period.

TRUE - This right exists for buyers in both categories (more or less than two years).

A vendor a retro can exercise the right of redemption even after thirty days from final judgment declaring it a true sale.

FALSE - The right must be exercised within thirty days from final judgment.

Co-heirs can exercise legal redemption individually with respect to their respective shares when sold separately.

TRUE - When parts are sold separately, each can independently exercise redemption rights.

The existence of brooks or roads between rural lands defeats the adjacency requirement for legal redemption.

TRUE - Natural and artificial barriers defeat the adjacency requirement.

In equitable mortgage, automatic transfer of ownership upon non-redemption is a valid stipulation.

FALSE - Such stipulations are void in equitable mortgages.

A buyer who paid installments for exactly five years gets 50% cash surrender value under Maceda Law.

TRUE - The base rate is 50% for those who paid more than two years.

Legal redemption among co-owners can be exercised even before partition of the property.

TRUE - The sale must be before partition for redemption rights to apply.

Assignment of credit is always a bilateral contract creating mutual obligations.

TRUE - It creates obligations for both assignor (warranty) and assignee (payment/consideration).