University of Mindanao- Digos College

THIRD PERIODICAL EXAM

1. Raymoon makes an offer to Andrew on January 10, 2014. Andrew makes known his
acceptance in a letter sent January 12, 2014 and received by Raymoon on January 20,
2014. Meantime, on January 15, 2014, Raymoon became insolvent.
a. There is already a meeting of minds, the contract is perfected.
b. The contract is voidable because one party is insolvent.
c. The contract is void the offer being ineffective.
d. The contract is voidable because one party is incapacitated.
2. Based on the same facts, except S is not insane but only a minor at the time the
acceptance is communicated to him.
a. The contract is binding between the parties.
b. There is no meeting of minds between the parties, therefore void.
c. The contract is not binding because the party is incapacitated.
d. The contract is unenforceable.
3. A forced B to sell him his ring. B sued for annulment, but A had already lost the ring
thru fortuitous event. Is A liable for loss?
a. A is not liable because the loss was without his fault.
b. A is liable to pay damages if he cannot replace the ring.
c. A is not liable to because no one shall be responsible for the loss of a thing due
to fortuitous event.
d. A is liable for the loss even if it was due to fortuitous event because of his bad
faith.
4. When the contract lacks one of the essential elements, the contract is:
a. Voidable
b. Rescissible
c. Void
d. All of the above
5. Although contracts bind only contracting parties, their assigns and heirs, in the
following instances, third persons are bound thereby:
a. In case of stipulation pour autri
b. In contracts creating real rights
c. In contracts intended to defraud the creditors
d. All of the above
6. A qualified acceptance constitutes:
a. Counter offer
b. An absolute acceptance
 c. A meeting of minds between the parties
d. All of the above
7. The essential or impelling reason why the parties enter into a contract:
a. Motive
b. Profit
c. Cause
d. All of the above
8. The statement of a false cause in contracts shall render the contracts:
a. Voidable
b. Void
c. Unenforceable
d. Rescissible
9. Business advertisements of the things for sale are:
a. Definite offer
b. Counter offer
c. Invitation to make an offer
d. Acceptance of the offer
10. A contract wherein both contracting parties are incapable of giving consent and yet
ratified by the guardian of either parties is:
a. Voidable
b. Rescissible
c. Unenforceable
d. Void
11. These persons are bound by contracts except:
a. Assigns
b. Heirs
c. Third persons
d. Parties
12. Liable for the loss of the subject matter by fortuitous event
a. Creditor
b. Debtor
c. Both creditor and debtor
d. None of the above
13. Valid, binding and enforceable until annulled
a. Rescissible contract
b. Voidable contract
c. Void ab initio contract
d. Validable contract
14. Which of the following contract is voidable?
 a. Those where one of the parties is incapacitated.
b. Those whose object is outside the commerce of men.
c. Those which are absolutely fictitious.
d. Those which contemplate an impossible service.
15. Three of the following are void contracts. Which is the exception?
a. Contacts where the cause is immoral.
b. Contracts to prevent a known supporter of a political rival from voting for his
candidate for a valuable consideration.
c. Contracts with valid consideration but with unlawful motives.
d. Absolutely simulated contracts.
16. S orally leased to R his parcel of land for a term of two years. The contract is:
a. Rescissible
b. Voidable
c. Unenforceable
d. Void
17. Contracts take effect only to the parties, their assigns and heirs except where the
rights and obligations arising therefrom:
a. Is not transmissible by their nature.
b. Is not transmissible by stipulation of the parties.
c. Is not transmissible by provision of law.
d. All f the above
18. Where damages is caused to either of the contracting parties or to a third person, the
contract may be:
a. Rescinded
b. Annulled
c. Reformed
d. Ratified
19. An offer becomes ineffective if, before acceptance is conveyed, either parties
become:
a. Civilly interdicted
b. Insane
c. Insolvent
d. All of the above
20. Contracts entered into in a state of drunkenness or during hypnotic spell is:
a. Void
b. Voidable
c. Unenforceable
d. Rescissible
21. If mistake, fraud or accident has prevented a meeting of the minds of the parties, the
proper remedy is:
a. Reformation
b. Rescission
c. Annulment
d. Resolution
22. The following is an example of a real contract:
a. Contract of pledge
b. Contract of deposit
c. Contract of commodatum
d. All of the above
23. A orally leased to B his car for a term of 2 years. B has not taken possession of the car
and A has not received any rental. The contract is:
a. Valid and binding
b. Unenforceable
c. Rescissible
d. Voidable
24. Based on the preceding number, if the object were a house, the contract shall be:
a. Valid and binding
b. Rescissible
c. Unenforceable
d. Voidable
25. If the object were a parcel of land, the contract is:
a. Valid and binding
b. Rescissible
c. Unenforceable
d. Voidable
26. Statement no. 1-As a rule, contracts take effect only between the parties.
Statement no. 2-Mere incidental benefit of the third person is enough for stipulation
pour autri to exist provided he accepts the same.
a. Both statements are true
b. First statement is true, while the second statement is false
c. First statement is false, while the second statement is true
d. Both statements are false
27. These are principles in contracts. Which is not?
a. Binding on third persons
b. Freedom or autonomy of contracts
c. Relativity of contracts
d. Perfection by mere consent
28. The action to annul a voidable contract is extinguished by:
a. Novation
b. Ratification
c. Rescission
d. Estoppel
29. Which of the following contracts must be in writing to be enforceable?
a. Acts and contracts for the creation, transmission, modification,
extinguishments of real rights.
b. The cession, repudiation, renunciation of heredity rights.
c. Contract of partnership
d. Contract of guaranty
30. A without authority from B sold the latter’s car in the name of the latter. The contract
is therefore:
a. Rescissible
b. Voidable
c. Unenforceable
d. Void
31. Because A wants to sell his land to B but the latter does not want to buy the same, A
forced B to buy his land. The contract is:
a. Not binding upon B since his consent was vitiated
b. Valid, binding and enforceable
c. Unenforceable as against B but not against A
d. May be ratified expressly and tacitly by A
32. D borrowed a sum of money from C with a certain rate of interest. C now wants to
increase the rate of interest without the consent of D. What principle in contracts
prohibits C from doing so?
a. Autonomy of contracts
b. Relativity of contracts
c. Mutuality of contracts
d. Obligatory force and compliance in good faith
33. The following are attributes of a voidable contract. Which is not?
a. It is binding, valid and enforceable before annulment.
b. Damage is material to be voidable contract.
c. It can be ratified and ratification has retroactive effect.
d. The capacitated cannot allege the incapacity of the other party.
34. Which of the following can be considered as a feature of a void contract?
a. Subject to ratification
b. Novation cannot apply
c. It exists
 d. Action or defense of nullity is subject to prescription
35. S offers to sell his house to B for P100,000. B asks him if he would accept P80,000.
Which of the following is correct?
a. Because of ambiguity, both offers are terminated by operation of law.
b. B’s response is a mere inquiry, the P100,000 offer by S is still there.
c. B’s response is a counter-offer effectively terminating the P100,000 offer and
instigating an offer for P80,000.
d. B’s response is a rejection of the P100,000 offer and there is no offer for
P80,000 because it is too indefinite to be an offer.
36. Which of the following is not valid?
a. Mutual promise to marry entered into orally.
b. Sale of immovable property orally entered into.
c. The stipulation is void because it is contrary to public policy.
d. One of the parties in a contract is incapable of giving consent.
37. An agreement in restraint of trade or establishing monopoly is:
a. Perfectly valid
b. Voidable
c. Void
d. Unenforceable
38. One of the stipulations contained in the contract between M Company and its
employees is that the company shall pay a bonus to employees of the company who
shall continue its employment for at least 2 consecutive years, unless he quits or is
discharged before the expiration of the period of 2 years. X, an employee of the
company was discharged without just cause, just one week before the completion of
the two-year period.
a. X is not entitled to the bonus because his discharge was in accordance with the
contract.
b. X is not entitled to the bonus because the employer’s right to terminate is
superior than the right of the employee to be employed.
c. X is entitled to the bonus whether the discharge is with or without case.
d. X is entitled to the bonus because the debtor company has voluntarily
prevented the happening of the condition.
39. Statement no.1- Dolo incidente entitles the person against whom it was employed to
the right to seek the annulment of the contract. Statement no.2- A stipulation pour
autrui is an exception to the rule on relativity of contracts
a. Both are true
b. No.1 is false; no.2 is true
c. Both are true
d. No.1 is true; no.2 is false
40. Example no.1: S sold to B in a private instrument his land. Later, B wanted to have
the sale registered but registration requires a public instrument ; in here, B may
compel S to execute the needed public instrument. Example no.2: S sold to B orally
his land. After B paid S, he wants to register the in his name but he needed a public
instrument of sale. In here, B may compel S to execute the needed public instrument.
a. Both examples are false
b. Both examples are true
c. Only the first is true
d. Only the second is true
41. Must be in writing to be enforceable:
a. Lease of land for 12 months
b. Lease of car for 18 months
c. Both a and b
d. None of a and b
42. Which of the following is not presumed to be legal subrogation?
a. When a creditor pays another creditor who is preferred
b. When a third person, not interested in obligation, pays with the approval of the
debtor.
c. When a third person interested in the obligation pays even without the
approval of the debtor.
d. None of them
43. Statue of Frauds is not applicable to
a. Contract not to be performed within a year from the making thereof
b. Executed contract
c. Oral contract of loan
d. Mutual promise to marry
44. Which of the following contracts is voidable?
a. Those where both parties are incapable of giving consent to a contract.
b. Those where the consent is vitiated by mistake, violence, intimidation, undue
influence or fraud.
c. Those undertaken in Fraud of creditors when the latter cannot in any matter
collect the claims due them.
d. Those whose object is outside the commerce of men.
45. A verbal agreement was made between A and B whereby A agreed to sell and B
agreed to buy A’s farm for P100,000.00. The price was paid. Possession was not
given nor the deed delivered. Both being refused. The contract is:
a. Rescissible
b. Voidable
c. Unenforceable
 d. Void
46. A was forced by B to sign a contract. C a creditor of A wants to annul the contract. Is
C allowed by law to do so?
a. No, because a third person cannot assail a contract.
b. Yes, because the contract is voidable and C is damaged.
c. Yes, a third person can annul a rescissible contract.
d. No, because a third person cannot assail a voidable contract.
47. A loan for P800 was orally contracted. May the lender recover the sum lent?
a. No, because the contract is unenforceable.
b. Yes, because the contract is enforceable.
c. No, because the contract must be in writing to be valid.
d. Yes, if the debtor ratifies the loan.
48. Is a remedy in equity by means of which a written instrument is made or constructed
so as to express or conform to the real intention of the parties when some error or
mistake has been committed?
a. Ratification
b. Resolution
c. Reformation
d. All of the above
49. S and M agreed in print that S, debtor for P30,000, will work as a servant of M
without pay until she could find money with which to pay her debt. S failed to comply
with her obligation. Under this premise, which of the following statement is correct?
a. The agreement to work as a servant is void because it is immoral.
b. The contract to work without pay as a servant until the debt is paid is void.
c. To act as a servant without pay is unconstitutional because this is equivalent to
involuntary servitude.
d. The agreement to work without pay since written is enforceable.
50. In an “invitation” to bid, B proposes the following: “I will buy the property for
P100,000 and if the bid of any other offer or shall be considered the best in terms of
amount and conditions, I am equal to that offer”.
a. The offer is speculative, because it cannot be considered as against another
offer which is certain.
b. The offer is considered a counter offer.
c. This is a continuing offer which is very certain.
d. The advertiser is not bound to accept the highest bidder.