Since 1977
BUSINESS LAW
BL.2801-Drill 1 - Contract
1. Contracts take effect only between the parties or their assigns
and heirs, except where the rights and obligations arising from
the contract are not transmissible by their nature, by
stipulation, or by provision of law. In the latter case, the
assigns or the heirs are not bound by the contracts. This is 6.
known as the principle of (2011 Bar)
a. Relativity of contracts
b. Mutuality of contracts
c. Freedom to stipulate
d. Obligatory force of contracts
2. The estate of Krispy Kreme who died recently, shows, among
other documents/contracts, the following:
I. A certificate from Harvard University granting a
scholarship to Krispy. He was subjected to exhaustive 7.
examinations and interviews before he was granted the
scholarship. He was supposed to start studying at Harvard
in 3 months’ time.
II. Articles of partnership of Donut enterprise showing
Krispy as a general partner.
III. A stock certificate of Dunkin Corporation showing Krispy
as the owner of P5,000 shares of stock.
IV. A promissory note amounting to P100,000 executed by 8.
Maker in favor of Krispy. The note is due after 90 days.
Which of the rights of Krispy arising from the said
documents/contracts will be transmitted to the heirs?
a. I and II c. III and IV
b. II and III d. I and IV
3. This is a real contract:
a. Deposit c. Antichresis
b. Pledge d. All of them
4. S offered to sell to B his house and lot for P10,000,000. In
order to pressure B into buying said house and lot, T, a very
good friend of S, threatened B with death as a result of which
B accepted the offer of S. It turns out now that the market
value of the house and lot is P15,000,000. Is the contract of S
and B valid?
a. The contract is valid since it is very clear that S did not 9.
apply the intimidation.
b. The contract is voidable because the consent given by B
is anyway vitiated even if the intimidation was employed
by a third person.
c. The issue of the contract being voidable is not relevant
because B will not have the contract avoidable because it
is actually favorable to him.
d. It is not B but S or T who can file the action for
annulment.
5. On July 1, 2019, Serrano offered to sell his only Mercedes
Benz car for P1,000,000.00 to Benitez who was interested in
buying the same. In his letter to Benitez, Serrano stated that
he was giving Benitez up to July 31, 2019 to make up his 10.
mind whether to buy the car or not. On July 25, 2019, Serrano
personally went to Benitez to inform him that he was no
longer willing to sell the car unless the price was increased
to P1,400,000.00 because another buyer was interested in
buying the car for the said amount of P1,400,000.00.
a. Benitez may compel Serrano to sell to him the car for
P1,000,000.00.
b. Serrano may validly withdraw his offer to Benitez
because the option was not founded upon consideration
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ATTY.ONG/LOPEZ
MAY 2020
c. Serrano may not withdraw his offer until after the lapse of
the option period that he gave to Benitez.
d. The increase in price made by Serrano was not valid
because it was made within the option period.
Which of these constitutes fraud?
a. The usual exaggeration in trade if the other party had an
opportunity to know the facts.
b. An expression of opinion which did not turn out to be true
if made by an expert and the other party relied on it.
c. Failure to disclose facts when there is no duty to reveal
them.
d. A misrepresentation made in good faith.
e. Both b and c.
In a written contract, the true intention of the parties was not
reflected therein through the fraud committed by one of them,
which fraud prevented a meeting of the minds. The applicable
remedy would be -
a. Reformation of the contract
b. Resolution of the obligation
c. Annulment of the contract
d. A petition for the declaration of nullity of the contract
To defraud his creditors, A contracted B by selling a land to
B. B now seeks to register the land with the Register of
Deeds. X a creditor of A seeks to prevent the registration on
the ground that the contract is rescindable. Despite X’s
objection may the land be registered based on the contract in
B’s name.
a. The land cannot be registered based on the contract which
is rescindable.
b. The land cannot be registered because the contract is in
fraud of creditor.
c. The land can be registered based on the contract because
the contract is not yet rescinded.
d. The land can be registered because the contract is valid
and can be attacked collaterally in a land registration
proceeding.
X and Y were to marry in 3 months. Meantime, to express his
affection, X donated a house and lot to Y, which donation X
wrote in a letter to Y. Y wrote back, accepting the donation
and took possession of the property. Before the wedding,
however, Y suddenly died of heart attack. Can Y’s heirs get
the property? (2011 Bar)
a. No, since the marriage did not take place.
b. Yes, since all the requisites of a donation of an
immovable are present.
c. No, since the donation and its acceptance are not in a
public instrument.
d. Yes, since X freely donated the property to Y who
became its owner.
Contracts are effective and binding only between the parties,
their assigns and their heirs. Three of the following
enumerations are exceptions as provided by law. Which does
not belong to the exception?
a. Where there is a stipulation in favor of a third party
b. Where one of the parties to the contract dies and
thereafter a suit is filed on the basis of the contract.
c. Where the obligations arising from contract are not
transmissible by their nature.
d. Where the obligations arising from contract are not
transmissible by stipulation or by provision of law.
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EXCEL PROFESSIONAL SERVICES, INC.
11. A wrote a letter to B wherein A offered to sell a piece of land
to B for P200,000. B signified his desire to buy the land. In
A’s letter, B was given a period of two (2) months within
which to produce the P200,000. After 45 days, A told B that
price of the land is now P250,000. Can be compel A to accept
the P200,000 first offered by A and execute the deed of sale?
a. Yes, because there was actual meeting of the minds of the 18.
parties.
b. No, for B did not signify his acceptance of A’s offer.
c. Yes, because A is already estopped by his signed letter.
d. Yes, because the period of two (2) months has not
expired.
12. Which is the correct order of application of the rules in 19.
connection with solution of problems involving innominate
contracts?
a. The provisions of the Civil Code; then stipulation of the
parties; then provisions of the most analogous nominate
contract and lastly custom or usage of the place.
b. Custom or usage of the place; then stipulation of the
parties; then the provisions of Civil Code and lastly
provision of the most analogous nominate contract.
c. The stipulation of the parties; then the provisions of the
Civil Code; then the provisions of the most analogous 20.
nominate contract and lastly the custom or usage of the
place.
d. The provisions of the most analogous nominate contract;
then the stipulation of the parties; then the provisions of
the Civil Code and lastly the custom or usage of the
place.
13. This element exists only when they are expressly provided by
the parties:
a. natural elements.
b. accidental elements.
c. essential elements.
d. original elements.
14. S offered to sell his house and lot to B for P5,000,000 giving
to him an option of 60 days within which to decide whether or 21.
not to buy. After only 15 days, S met T who offered to buy the
same house and lot for P8,000,000. S then notified B of the
withdrawal of the option and proceeded to sell to T. B files an
action for damages against S.
a. B cannot recover damages from C because his option is
without consideration as something paid or promised. 22.
b. B can recover damages from S because the latter violated
the option given to the former.
c. B can recover damages from S if B gave S option money
which will result in a perfected contract of sale.
d. Correct answer not indicated
15. A contract of commodatum has the following essential
elements:
a. consent of the contracting parties, object certain and cause
or consideration.
b. consent of the contracting parties, object certain, cause or
consideration and delivery of the object.
c. consent of the contracting parties, object certain, cause or
consideration and formalities required by law. 23.
d. consent of the contracting parties, object certain,
delivery of the object, and formalities required by law.
16. Under the following contracts the rights and obligation are not
transmissible except:
a. Contract of lease
b. Contract of agency
c. Contract of partnership
d. Contract of commodatum
17. In a contract, as written, Dave promises to pay Carlo P20,000
on September 15, 2017. The consideration received by Dave
is not stated in the contract:
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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 the cause is not stated.
Which of the following is consensual contract?
a. Contract of partnership with capital contribution of real
property amounting to P100,000.
b. Donation of personal computer worth P5,000.
c. Stipulation of interest in a contract of loan.
d. Contract of agency.
A solemn or formal contract has the following essential
elements:
a. consent of the contracting parties, object certain and cause
or consideration.
b. consent of the contracting parties, object certain, cause or
consideration and delivery of the object.
c. consent of the contracting parties, object certain, cause or
consideration and formalities required by law.
d. consent of the contracting parties, object certain,
delivery of the object, and formalities required by law.
On May 1, 2019, S offered to sell a specific car to B for
P500,000.00. B sent his letter of acceptance to S on May 8,
2019. On May 10, 2019, however, S died in a vehicular
accident and his secretary received the letter of acceptance on
May 12, 2019 unaware that S had already died.
a. The contract was perfected on May 8, 2019 when B sent
his letter of acceptance.
b. The contract was perfected on May 12, 2019 when the
secretary of S received the letter of acceptance.
c. The contract was not perfected because the offer of S
became ineffective when he died.
d. The contract was perfected on May 1, 2019 because the
acceptance made by B on May 8, 2019 retroacts to the
date of the offer.
Under this theory, the contract is perfected at the moment
when the acceptance is declared or made by the offeree:
a. Theory of concession
b. Theory of cognition
c. Gennosenshaft theory
d. Theory of manifestation
Dante borrowed P15,000,000.00 from Carlos. Dante died
without having paid his loan obligation to Carlos. He left
Santos and Marlon his heir properties worth P12,000,000.00.
a. Santos and Marlon is liable to Carlos for P7,500,000.00
each.
b. The estate of Dante is liable to Carlos for P12,000,000
and Santos and Marlon is liable to Carlos for
P1,500,000.00 each.
c. Santos and Marlon must deliver the properties worth
P12,000,000 to Dante and to pay the balance of
P3,000,000 with their separate property in solidum.
d. Santos and Marlon must deliver the properties worth
P12,000,000 to Carlos.
Sisa defrauded Booba in making the latter believe that the ring
he is selling is gold and diamond when in fact, it is copper and
glass. On the other hand, Booba defrauded Sisa in paying him
P200,000 in fake Philippine currency. Which of these
statements is correct?
a. Sisa can go to court for the annulment of the contract so
that the ring will be returned to him.
b. Booba can go to court so that his fake money will be
restored to him.
c. Neither Sisa nor Booba can go to court since they are both
guilty of fraud.
d. All the statements are not correct.
BL.2801