Professional Documents
Culture Documents
Law On Sales
Law On Sales
A P S MACMOD, CPA
Contract of Sales
TRUE OR FALSE
53. Statement No. 1: Things subject to a resolutory condition cannot be the object of the contract of sale. FF
Statement No. 2: If the price is simulated, the contract of sale is voidable.
a. Both are true c. No. 1 is true; No. 2 is false
b. Both are false d. No. 1 is false; No. 2 is true
54. Statement No. 1: The ownership in the thing shall not pass to the purchaser until he has fully paid the price in
contract to sell. TF
Statement No. 2: If at the time the contract of the sale is perfected, the thing which is the object of the contract has
been partially lost, the contract shall be without effect
a. Both are true c. No. 1 is true; No. 2 is false
b. Both are false d. No. 1 is false; No. 2 is true
55. Statement No. 1: Maceda Law is also applicable to commercial units sold in instalment. FF
Statement No. 2: Pacto de retro sale is a sale subject to suspensive condition.
a. Both are true c. No. 1 is true; No. 2 is false
b. Both are false d. No. 1 is false; No. 2 is true
56. Statement No. 1: Legal redemption is the right to be subrogated, upon the same terms and conditions stipulated in
the contract, in the place of one who acquires a thing by purchase or dation in payment or by any other transaction
whereby ownership is transmitted by onerous title. TT
Statement No. 2: The vendor shall not be bound to deliver the thing sold, if the vendee has not paid him the price,
or if no period for the payment has been fixed in the contract.
a. Both are true c. No. 1 is true; No. 2 is false
b. Both are false d. No. 1 is false; No. 2 is true
57. Statement No. 1: Where an unpaid seller has made part delivery of the goods, he may exercise his right of lien on
the remainder, unless such part delivery has been made under such circumstances as to show an intent to waive the
lien or right of retention. TF
Statement No. 2: Where the price cannot be determined in a contract of sale, the contract is inefficacious but may be
ratified.
a. Both are true c. No. 1 is true; No. 2 is false
b. Both are false d. No. 1 is false; No. 2 is true
58. S sold to B a specific car for P20,000 payable in four equal instalments. S delivered the car to B but required to
mortgage it back to S to answer for the unpaid installments. B paid the 1 st instalment, but the last three he failed to
pay. S foreclosed the mortgaged property and sold it at public auction for P13,000. C
a. S can recover from B the balance of P2,000.
b. S can recover from B & balance of P2,000 if there is stipulation to that effect.
c. S cannot recover the deficiency any more even if there is stipulation to that effect.
d. S can recover the balance under Maceda law
59. The vendor A
a. is liable to the vendee for hidden fault or defect of the thing sold even if he is not aware thereof
b. is not liable to the vendee for hidden fault or defect of the thing sold if he is not aware
thereof
c. is liable to the vendee for hidden fault or defect of the thing sold if he is not aware
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thereof if stipulated
d. Answer not given.
60. When it is stipulated that the repurchase of the property sold could be made at any time, the
repurchase shall be exercised B
a. Within four years from the date of the contract
b. Within ten years from the date of the contract
c. After ten years from the date of the contract
d. None of them.
61. B imports electric fans from China and specifically asks for 220 volts fans. The fans arrived duly labelled 220 volts
and sell them to the public as such. Later, it turned out that the fan has been mislabelled by the manufacturer and
were only good for 110 volts. A
a. B is liable to the vendee for any hidden defects in the thing sold even though he was not ware
thereof.
b. B is not liable because he was in good faith, and this is shown by specifically asking for 220 volts.
c. B is not liable under the principle of “lot the buyer beware”
d. B is liable because the vendee did not enjoy legal and peaceful possession of the object of sale.
62. S sold to B a parcel of land for a lump sum of P50,000 the contract states that the area is 500
square meters. Subsequently, it was ascertained that the area included within the boundaries is really 550 square
meters. D (same price)
a. S is bound to deliver 500 square meters and B to pay P50,000.
b. S is bound to deliver 500 square meters and B to pay P55,000.
c. S or B can rescind the We because there is no meeting of minds.
d. None of the above.
63. In the succeeding question, if the land contains 445 square meters, which of the following is correct? D (sale by
boundary lump sale)
a. S is bound to deliver 500 square meters and B to pay P50,000.
b. S is bound to deliver 445 square meters and B to pay P44,500.
c. B may rescind the sale because the lack in area is more than 1/10 of the total area.
d. None of the above.
64. S enter into a contract with B whereby S sold his land orally to B. The land has been delivered and the money has
been paid. Is the oral sale of the land valid? D ( no more statue of fraud due to performance)
a. The contract is not valid because it is not in writing as required by the Statue of Frauds.
b. The contract is not valid because the contract is not made in public instrument.
c. The contract is unenforceable.
d. The contract is valid & fully enforceable because the contract is already perfected and executed.
65. G, guardian of W, sold W’s house and lot worth P480,000 for P240,000. A
a. The contract can be rescinded because of inadequacy of price.
b. The contract cannot be rescind because of inadequacy of price.
c. The contract cannot be rescind because all essential elements of the contracts are present.
d. The contract cannot be rescinded but can be annulled on the ground of minority of the word. (W)
66. X Shoe Store, Inc. entered into a separate contracts with two movie stars, B1 and B2. With B1, the agreement was
that the Shoe Store shall deliver at a specified date or a price of P1,000 a pair of shoes of a specified brand which the
store had been manufacturing for the general public but which at the time of the contract had already been sold out,
and with B2, the agreement was that the shoe store shall deliver at a specified date for a price of P2,000 a pair of
shoes to be made specially for him in accordance with a design submitted by him. What is the nature of these two
contracts? D
a. Contract for piece of work c. Agency to sell
b. Sale d. Combination of A and B
67. A, B and C are co-owners of an undivided parcel of land. B sold his 1/3 interest to C absolutely. Which is correct? B
a. A may exercise his right of redemption on the interest sold by B to C.
b. A cannot exercise the right of redemption because the sale was made in favor of a co-owner.
c. The sale made by B to C is void because it was not made in favor of a stranger.
d. A may redeem only ½ of the interest sold by B to C.
68. In No. 67 suppose, instead of selling his interest to C, B sold it to X. Who can exercise the right of redemption? A
a. Both A and C. c. C but not A
b. A but not C d. A, B, and C
70. A borrowed from B P200,000. To secure payment of the loan, A mortgaged his house and lot to B. The mortgage is
duly recorded. Then, without the consent of B, A sold and delivered the house and lot to C and C took possession of
the house and lot. C
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a. The sale to C is void.
b. A cannot transfer ownership to C because B did not give his consent to the sale
c. A is liable to B for damages
d. Ownership is transferred to C subject to the right of mortgagee B.
71. Delivery of movable may be made by the delivery of the keys of the place or depository where the movables are dept
or stored. This kind of delivery is called: C
a. Traditio longa manu c. Traditio clavium
b. Traditio brevi manu d. Traditio constituturn possessorium
72. If immovable property should have been sold to different vendees, the ownership shall be transferred to the person C
a. Who have first taken possession in good faith.
b. Who presents the oldest title in good faith.
c. Who in good faith recorded it in the Registry of Property
d. Who have paid in good faith the purchase price in full
73. In the preceding question, if movable property, it shall belong to the person D
a. Who have paid in good faith the purchase price in full
b. Who in good faith first recorded it in the Registry of Property
c. Who presents the oldest title in good faith.
d. Who have first taken possession in good faith
74. Statement No. 1: If the property is sold for nonpayment of taxes due and not made known to the vendee before the
sale, the vendor is still liable for warranty against eviction. TF
Statement No. 2: The expropriation of property for public use is also governed by contract of sale.
a. Both are true c. No. 1 is true; No. 2 is false
b. Both are false d. No. 1 is false; No. 2 is true
75. Statement No. 1: Sale of future inheritance is void; while the sale of hereditary right is valid the seller is liable for his
character as an heir.TF
Statement No. 2: An unpaid seller has right of resale always.
a. Both are true c. No. 1 is true; No. 2 is false
b. Both are false d. No. 1 is false; No. 2 is true
76. In three of the following there is no warranty against hidden f=defects of animals.
Which is the exception? D
a. Animals sold at fairs
b. Livestock sold as condemned, declared known to the buyer
c. Animals sold at public auction
d. None of the above
77. In three of the following the sale is void. Which is the exception? D
a. Sale of animals suffering from contagious diseases
b. Sale of animals if the used or service for which they are acquired has been stated in the contract and
they are found to be unfit therefore
c. Sale of a vain hope or expectancy
d. Sale of hereditary right
78. S, 16 years old, sold to B, of legal age, a specific diamond ring for P10,000. Later, B sold it to X, which of the
following statements is incorrect? A
a. S has a voidable title because at the time of sale he is a minor
b. X, if in good faith, shall become the owner upon the delivery to him
c. X, if in bad faith, shall also be the owner, except that his title is voidable
d. B has got a valid title even if he acquired the ring from a person who is incapacitated
79. In sale with a right to repurchase, if redemption is to be made, which of the following will not be
paid by the seller to the buyer? D
a. Price paid by the buyer
b. Expenses in the execution of the sales contract paid by the buyer
c. All necessary expenses on the thing sold and to be redeemed
d. Interest of the price paid by the buyer
80. S offers to B 100 radio sets for P50,000 payable in 30days with 10% interest per annum. B cables
S to advise that he accepts provided the interest is reduced to 5%. If S and B are both merchants and there is no
further 5 communication between them relating to the terms, them A (negotiation stage only)
a. B has made a counter offer
b. The contract is formed incorporating only the terms of S
c. The contract is perfected with B’s reduced interest rate becoming part of the agreement
d. None of the above
81. S offered for sale to B 10 cavans of wigwag rice. B asks S price per cavan. S told B
that the price per sacks is P5.00 over the price in the Divisoria market. The price is C
a. Certain, because it has got reference to another thing which is certain
b. Not certain, parties will go to court
c. Not certain because the price at Divisoria Market is not stated
d. None of the above
82. S sell to B his 1988 Toyota car, and leaves to B to determine the price. B refuses to fix the price
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But took the car for his use. Which of the following statements is correct? B
a. No sale, because the price is not fixed by the parties
b. There is sale, B must pay a reasonable price
c. No sale until a third person fixes the price
d. S may go to court and ask for damages
83. B imports electric fans from china and specifically asks for 220 volts fans. The fans arrived dully
labelled 220 volts and sells them to the public as such. Later, it turned out that the fans have been mislabelled by the
manufacturer and were only good for 110 volts. A
a. B is liable to the vendee for any hidden defects in the sold even though he was not aware thereof
b. B is not liable because he in good faith, and this shown by specifically asking for 220 volts
c. B is liable because under the principle of “let the buyer beware”
d. B is liable because the vendee did not enjoy legal and peaceful possession of the object of sale.
84. Three of the following are conditional sale. Which is the exception? C
a.. Sale expectancy
b. Sale with a right to repurchase
c. Sale of a vain hope
d. Sale subject to a contingency
85. S sold a piece of pasture land to B. On the same day S sold it again to X. Both sales were made in private documents,
bearing the same date. Neither of the purchasers succeeded in taking physical possession of the land because if was
already in the possession of another person under a contract of lease for one year, executed by S a month before, also
in a private document. Who is the right owner of the land, on the supposition that both purchasers acted in good
faith? Why? B (because he’s the first buyer/ double sale 1 with the oldest title)
86. A bought a truck from B payable in installment secured a chattel mortgage executed by A on the truck, As additional
security, A’s brother, C, executed a real estate mortgage in favor of B
A defaulted in the payment of several installment, consequently, B filed an action for replevin , repossessed the truck,
and foreclosed the chattel mortgage.
Can B proceed against the other properties of A and the real estate mortgage executed by C to recover the deficiency
if any, after the chattel mortgage foreclosure? Explain (No because recto law applies)
87. S sold to B a certain water pump by description. Although the description was completely correct as described by S,
the machine would not work properly for which it has been bought. Can B refuse to pay the price of the sale? Why?
(sale by description – you can’t refuse to pay )
88. S sold car for P300,000 to B. Despite his knowledge of this defect, S obtained a waiver from B of the latter’s right
under the warranty against hidden defects. Subsequently, the car was wrecked due to the recklessness of B who only
the discovered the defects when the FMV of the car was P250, 000. Choose the best answer. A
a. S is still liable to reimburse B 50,000 plus damages
b. The waiver is void because S knew of the defect
c. S is not liable anymore because the car got loss due to the recklessness of B
d. The liability of S remains to be P300,000 because of breach of warranty against hidden
defect.
90. Here, physical delivery is not necessary because buyer is already in possession of the thing sold: B
a. Traditio longe manu c. Traditio symbolica
b. Traditio brevi manu d. Traditio constitutum posessorium
“Few things are impossible to diligence and skill. Great works are performed not by strength but by perseverance”
-Samuel Johnson