Contracts

[Essential Elements – Status1]

[Follow the Outline]

Part One
Modified True or False. Consider the statement true only when it is absolutely true.
Explain ALL your answers.

Part Two
Multiple Choice. Choose the best answer.

Part Three
Instruction : State the status of the contract, as a rule, under the following circumstances:

1. Those undertaken in fraud of creditors when the latter cannot in

any other manner collect the claims due them.
2. Contracts with a false cause.
3. Oral sale of an immovable for P450.00.
4. The guardian sold the property of his ward valued at P100t to
another person for the price of P70t.
5. Oral sale of a bag where it was agreed that the bag will he
delivered after 18 months and payment will be upon delivery.

Part Four
Give direct and concise but complete answers.
Cite authorities, if any.

1. With the intention of raising money to buy a gun which he would use in killing X, his
mortal enemy, S sold his only car for P100,000.00 cash to B who knew nothing of the
intention of S in selling the car. After the sale, S was able to buy a gun complete with all
the papers required by law. B, on the other hand, was able to register the car in his name
at the Land Transportation Office. What is the status of the sale?

3. Lino entered into a contract to sell with Ramon, undertaking to convey to the latter one of
the five lots he owns, without specifying which lot it was, for the price of P1 million.
 Later, the parties could not agree which of five lots he owned Lino undertook to sell to
Ramon. What is the standing of the contract?

5. Eduardo borrowed P50,000.00 from Diego payable within 30 days. Eduardo failed to
pay the debt on the due date despite repeated demands from Diego. When the debt
remained unpaid for 6 months, Diego asked his counsel, Atty. Santos, to write a letter to
Eduardo informing him that unless Eduardo assigns his lot to Diego, Diego would be
compelled to file a civil complaint against Eduardo for the collection of Diego’s claim.
Eduardo, afraid of the threat of a court action against him, was forced to sign a deed of
assignment of his lot in favor of Diego. What is the status of the assignment?

7. “X” came across an advertisement in the “Manila Daily Bulletin” about the rush sale of three
slightly used TOYOTA cars, Model 1989 for only P200,000 each. Finding the price to be very
cheap and in order to be sure that he gets one unit ahead of the others, “X” immediately phoned
the advertiser “Y” and placed an order for one car. “Y” accepted the order and promised to
deliver the ordered unit on July 15, 1989. On the said date, however, “Y” did not deliver the unit.
“X” brings an action to compel “Y” to deliver the unit. Will such action prosper? Give your
reasons.

9. In 1950, the Bureau of Lands issued a Homestead patent to A. Three years later, A sold the
homestead to B. A died in 1990, and his heirs filed an action to recover the homestead from B on
the ground that its sale by their father to the latter is void under Section 118 of the Public Land
Law. B contends, however, that the heirs of A cannot recover the homestead from him anymore
because their action has prescribed and that furthermore, A was in pari delicto. Decide.