Name:Art Given M.

Baraquio Section: 1BAM-B

I -- _____
II -- _____
BUSINESS LAW III -- _____
PRELIMS - MIDTERMS EXAMINATIONS IV -- _____
[1BAF–A & 1BAF–B/ 1BAM–A & 1BAM–B] TOTAL POINTS : _____
Atty. Sherwin Marc Arcega Lindo % EQUIVALENCE : _____

GENERAL INSTRUCTIONS: Read each question carefully before providing your answers. Follow strictly the instructions. Answer sequentially
and completely. Avoid erasures.
`
I. IDENTIFICATION: (25 points) Identify the following concepts and/or principles. If you have answered already fifteen out of
the twenty-five questions, AND, you are 100% confident with your answers, no need to answer the rest. Should it be
established that you were indeed 100 % correct with your 15 answers, the rest of the points for those questions you did not
answer, shall be credited to you in full, thereby, giving you the perfect 25 points for this section.

Quasi-Delicts 1. Act or omission in violation of legal right/s of another.

Real Obligation 2. “Obligation to give” thing or subject matter w/c obligor must deliver to oblige.
Positive Personal Obligation 3. X binds himself to do something/ render service to Y.
Negative Personal Obligation 4. “Obligation not to do” is what kind of a personal obligation.
Legal Delay 5. Failure to perform an obligation on time w/c constitutes breach of obligation.
Mora Solvendi 6. Delay on the part of debtor to fulfill his obligation/s.
Mora Accipiendi 7. Delay on the part of creditor to accept performance of the obligation/s.
Compensation Morae 8. Delay in reciprocal obligations when no actionable default exists as delay of obligor
cancels delay of obligee.
Fraud 9. The deliberate or intentional evasion of the normal fulfillment of an obligation.
Dolo Incidente 10. Incidental fraud committed in performance of an obligation already existing because of
contract.
Dolo Causante 11. Causal fraud employed in the execution of the contract w/c vitiates consent.
Negligence 12. Voluntary act or omission, w/o bad faith or malice, w/c prevents normal fulfillment of obligation.
Contractual Negligence 13. Negligence in contracts resulting in their breach under Art. 1172.
Tort 14. Civil negligence w/c by itself, is source of obligation between unrelated parties before pre-existing
contract.
Criminal Negligence 15. Negligence resulting in the commission of a crime.
Negligence 16. Failure to observe for protection of another’s interests that degree of diligence w/c is required by
the nature of the obligation & which circumstances justly demand, whereby, injury is suffered by the other. [ U.S.
vs. Barrias, 23 Phil 434]
Loss 17. Money compensation awarded to a party for loss or injury resulting from breach of contract by the other.
Fortuitous Event 18. Any event w/c cannot be foreseen or which, though foreseen, is inevitable that exempts
obligor from liability.
Presumption 19. Inference of a fact not actually known arising from its usual connection w/ another w/c is known
or proved.
Indefinite Period 20. Obligation w/c is not subject to any condition and w/ no specific date for fulfillment, thus,
immediately demandable.
Simple Loan 21. A contract whereby one of the parties delivers to another, “money or other consumable” thing,
upon condition that same amount of the same kind and quality shall be paid.
Usury 22. By this special contract, one of the parties delivers to another something not consumable, so that the
latter may use the same for a certain time and return it, thereafter.
Contractual obligations 23. By this special contract, a person binds himself to render some service or to do
something in representation of another or on behalf of another, with the consent or authority of the latter.
Quasi-Contracts 24. By this special contract, two or more persons bind themselves to contribute money, property
or industry to a common fund, with the intention of dividing profits among themselves.
Political Science 25. BONUS: What is the undergraduate (“Pre-Law”) Course of your Business Law Professor.

II. ANALYTICAL MULTIPLE CHOICE: [2 points each] In this special type of multiple choice, you shall be given either ONE
GENERAL STATEMENT and from the multiple choice answers, you shall choose that which is most correct or relevant to said
initial Statement, or you could be given TWO OR MORE STATEMENTS, and you shall determine from your choices, the
statement that best speak of the truth, correctness, relevancy and/or relative connection between the two Statements first
provided, for your proper analysis and/or resolution.

C 1. STATEMENT: A is obliged to deliver a Rolex watch to B on December 1, 2021. Which of the following
statements may be correct/ true statement/ declaration relative to said general statement/ problem. 

A. Before 01 December 2021, A has to take care of the Seiko watch with the diligence of a  good father of the
family. 
B. In case of loss of the Seiko watch by negligence of A, A shall be liable for damages.
C. A is not required to exercise the diligence of a good father of a family.
D. The obligation of A to B is not valid. 

A 2. STATEMENT: A is obliged to deliver to B one of his three (3) cars. Which of the following may be true with
respect to the latter.

Page 1 of 7
A. The obligation is not valid because the object is not determined.
B. The obligation is valid because the object is determinable. 
C. The obligation is valid. B can choose which one of the 3 cars. 
D. The obligation is valid because there is consent between A and B. 

A 3. In an obligation to deliver a generic thing; which, of the following reflects truth and relevancy:
 
A. The debtor is not liable for fraud or delay or negligence in the performance of the obligation. 
B. The debtor can choose which thing pertaining to the class to deliver.
C. The creditor has the right of choice. 
D. Loss by fortuitous event extinguishes the obligation. 

C 4. Statement 1. Accessions are necessary to the principal thing. 

  Statement 2. Accessories are not necessary to the principal thing but both must go together.
 
A. True; False 
B. False; True 
C. Both statements are true. 
D. Both statements are false. 

D 5. A binds himself to pay B P1,000 on December 10, 2021. Which of the following may be true?
 
A. If December 10 has elapsed but A has not paid B, A is in delay. 
B. A shall be liable to pay B P1,000 plus legal interests. 
C. If the P1,000 is lost by fortuitous event the obligation is extinguished.
D. A is not in delay unless B has made a demand. 

D6. STATEMENT: A agreed to B not to construct a fence between their 2 houses. 

A. The obligation is not valid. 

B. This is a negative real obligation. 
C. This is valid but cannot be enforced. 
D. A will never be in delay. 

C 7. STATEMENT: When a debtor is in delay: 

A. He is liable for damages. 

B. He is liable even for fortuitous event. 
C. All of the above. 
D. None of the above. 

C 8. STATEMENT: A source of liability is: 

A. Dolo causante 
B. Pare delicto 
C. Dolo incidente 
D. Culpa aquiliana 

B 9. Statement 1. Waiver of future fraud is null and void. 

Statement 2. Waiver of future negligence is valid. 

A. Both statements are false.

B. Both statements are true. 
C. True; False 
D. False; True 
  
B 10. Statement 1. If the law or contract does not state the diligence which is to be observed in the  
performance of the obligation, neither party is liable for negligence. 
Statement 2. If a party is negligent and at the same time in bad faith, he shall be liable for  
damages by reason of fraud. 

A. True; False 
B. False; True 
C. Both statements are true.
D. Both statements are false. 

B 11. STATEMENT: A binds himself to give to B, P1,000 if B sells A’s car; and, P2,000 if B will kill C.

A. The obligation is null and void. 

B. The obligation is partly valid and partly null and void. 
C. The obligation is null and void because the first condition is potestative and the second is contrary to law. 
D. The obligation is partly subject to a period and partly conditional.
 
A 12. Statement 1: A potesstative period does not make an obligation void. 
Statement 2: A potestative condition does not necessarily make an obligation void. 

A. Both statements are true. 

B. Both statements are false. 
C. True; False 
D. False; True 

B 13. STATEMENT: A owes B P10,000 to be paid after one year. As security A mortgages his car in favor of B. If
before the due date, the car is lost by fortuitous event, which of the following would hold true: 

A. A does not lose the benefit of the period because no one shall be liable for fortuitous  event. 
B. A does not lose the benefit of the period if he gives another security equally  satisfactory. 
C. A does not lose the benefit of the period because it was not stipulated.
D. A does not lose the benefit of the period because he is not in delay. 

A 14. STATEMENT: In a reciprocal obligation, the remedy (ies) of the injured party is/are:
 
A. Alternative C. All of the above 
B. Cumulative D. None of the above. 

D 15. STATEMENT: In case both parties have committed breach of their obligation/s, which of the following may
hold true:
 
A. The second to default or commit breach of obligation, may choose between rescission or fulfillment.
B. The first party at fault or committed breach of obligation is more is more liable than the second. 
C. Each party must bear his own respective damage. 
D. The liability of the first party at fault shall be equitably tempered by the courts . 

C 16. Statement 1. A period cannot prevent the fulfillment of an obligation. 

Statement 2. A condition may prevent the fulfillment of the obligation.

A. True; False 
B. False; True 
C. Both statements are true. 
D. Both statements are false. 

B 17. Statement 1. If the obligation does not fix a period, the court shall fix the period. 
Statement 2. Once a period is fixed by the courts, the parties cannot change it.

A. True; False 
B. False; True 
C. Both statements are false. 
D. Both statements are true. 
D 18. Statement 1. In an alternative obligation either party may choose as to who has the right of  choice. 
Statement 2. If it is the creditor who has the right of choice, he loses his choice if all the   prestations
are alternatively lost by fault of the debtor. 

A. True; False 
B. False; True 
C. Both statements are true. 
D. Both statements are false. 

C 19. STATEMENT: A and B by their joint act of negligence caused damage to X in the sum of P10,000.

A. The obligation is joint because A and B acted jointly. 

B. The obligation is joint because there is plurality of debtors. 
C. The obligation is solidary because the law so provides. 
D. The obligation is solidary because either A or B is liable for the full amount.

D 20. STATEMENT: Every obligation whose performance does not depend upon a future or uncertain event, or 
upon a past event unknown to the parties, is demandable at once. This statement best describes which of the
following:

A. Divisible and Indivisible Obligations 

B. Joint and Solidary Obligtions 
C. Obligations with a Period. 
D. Pure and conditional Obligations 

D 21. STATEMENT: This person is liable for the loss of the subject matter by fortuitous event.

A. Creditor C. Both A and B 

B. Debtor D. None of them. 

A 22. STATEMENT: A is obliged to give B his Mitsubishi, 4-door sedan Lancer with plate number ABC 123
on September 30, 2021. Should it happen that by October 10, 2021, A has not yet delivered the car which, is then,
totally destroyed by an earthquake on such date. Would A still liable? 

A. No, the obligation is extinguished. The specific thing was lost due to fortuitous event  and no demand to
deliver was made by B. 
B. Yes, A is in legal delay. B can claim damages. 
C. No, even A is already in default and can plead impossibility of performance.
D. Yes, B can instead demand for another car of equivalent value from A. 

D 23. STATEMENT: In the special contract of sale, the buyer is entitled and has the right to the fruits of the thing
sold from the time:

A. The obligation to deliver the thing sold arises. 

B. The sale is perfected. 
C. The thing sold is delivered. 
D. The fruit of the thing sold is delivered.

A 24. STATEMENT: Which of the following could reflect the concept of “fraud” under our Law on Obligations and
Contacts; and/or could be considered fraudulent under our present contemplation/ understanding. 

A. Failure to disclose facts when there is duty to reveal them. 

B. The usual exaggeration in trade, when the other party had the opportunity to know the  facts. 
C. Misrepresentation made not in bad faith. 
D. “Caveat Emptor” of let the buyer beware. 
B 25. STATEMENT: Determine from the following which is not a requisite in order that obligation may be
extinguished by the loss or destruction of the thing due: 

A. When the thing is lost without the fault of the debtor. 

B. When the thing lost is generic. 
C. When the thing is lost before the debtor has incurred in delay.
D. When the thing lost is specific. 

A BONUS. STATEMENT: The obligation is demandable on the date of the obligation and shall continue in force up
to the arrival of the day certain. Which of the following best describes or finds relevance with said first statement. 

A. Resolutory period C. Indefinite period 

B. Suspensive period D. Legal period

D 26. STATEMENT: These persons are bound by contracts entered into by them, accordingly, as follows: 

A. Contracting parties C. Assigns 

B. Heirs D. All of the them 

D 27. STATEMENT: The essential requisites of a valid contract are: 

A. Consent C. Subject 
B. Cause D. All of these. 

D 28. STATEMENT: When the object of the contract is outside the commerce of man, the contract is:

A. Recissible C. Unenforceable 
B. Voidable D. Void
 
A 29. STATEMENT: By this special contract, a person binds himself to the creditor for the fulfillment of the
obligation of the principal debtor in case the latter should fail to do so: 

A. Guaranty C. Pacto Comisorio 

B. Suretyship D. None of the three

B 30. STATEMENT: As general principle or rule, “Contracts are effective and binding only between the parties, their
assigns and their heirs”. The Law recognizes three (3) valid exceptions to said “relativity of contracts” rule/
principle listed in the choices below, EXCEPT: 

A. Where there is 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 contact. 
C. Where the obligations arising from contract are not transmissible by their nature.
D. Where the obligations arising from the contract are not transmissible by stipulation or by  provision of law. 

B 31. STATEMENT: A solidary obligation is one in which each of the debtors is liable for the entire obligation
or debt, and each of the creditors is entitled for the entire credit. Obligations shall only be considered  solidary
under the three recognized exceptions, herein below, EXCEPT:

A. When solidary is expressly stipulated in the obligation. 

B When the prestation is indivisible and there are two or more debtors and creditors.
C. When the law expressly provides solidarity. 
D. When solidarity is required from the nature of the obligation. 

B 32. STATEMENT: Mr. Santos sold his car to Mr. Garcia for P150,000.00. No date had been fixed by the parties for
performance of their respective obligations. Which of the following could find relevance with respect to the
obligation of Mr. Santos (SELLER):

A. To deliver the car immediately as there is a perfected contract 

B. To deliver the car upon the payment by Mr. Garcia of P50,000.00
C. To rescind the contract since there is no time fixed for the delivery and payment of the  car. 
D. To deliver the car within a reasonable time after the demand of Mr. Garcia to deliver. 
B 33. STATEMENT: When subject matter of the contract is lost through fortuitous event, who among the following
could still be held liable for the thing lost?

A. The debtors C. The creditors 

B. None of them D. Both creditor and debtor 

B 34. STATEMENT: The buyer of a thing has the right to the fruits of the thing: 

A. From the time the thing bought is delivered

B. From the time the sale is perfected 
C. From the time the obligation to deliver the thing bought arises. 
D. From the time the fruits are delivered. 

C 35. STATEMENT: The following are basic principles or characteristics of a contract, with the EXCEPTION of:

A. Freedom or liberty to stipulate 

B. Obligatory force and compliance in good faith 
C. Binding on third parties 
D. Perfected by mere consent.