No. 125 Brgy.

San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

Regulatory Framework for Business Transactions

Law on Sales – Supplemental Quizzer

1. When is a contract of sale perfected?

A. At the moment there is a meeting of minds upon the thing which is the object of the contract and
upon the price certain in money or its equivalent
B. At the moment there is delivery from the seller to the buyer
C. At the moment there is execution of deed of sale
D. At the moment there is notarization of the deed of sale

2. Which of the following is not an essential element of contract of sale?

A. Subject matter which should be a determinate thing

B. Price certain in money or its equivalent
C. Delivery of the subject matter from the seller to the buyer
D. Meeting of minds as to the determinate thing and the price certain in money

3. Which of the following is not a natural element of contract of sale?

A. Warranty on the conventional interest of the contract of sale

B. Warranty against eviction
C. Warranty against hidden defect
D. Warranty for merchantability

4. S and B entered into a contract whereby S will deliver a specific laptop valued at P40,000 while B
will deliver a specific laptop P20,000 plus a cash amounting to P20,000. What is the nature of
contract between S and B?

A. Contract of Barter
B. Contract of Sale
C. Contract of Lease
D. Contract for a piece of work

5. True or False. A contract to sell is a bilateral contract whereby the prospective seller, while
expressly reserving the ownership of the subject property despite delivery to the prospective buyer,
binds himself to sell the said property exclusively to the prospective buyer upon fulfillment of the
condition, that is the full payment of the price.

6. Which of the following may not become a subject matter of contract of sale?

A. Future Goods
B. Vain Hope
C. Hope
D. Undivided interest in a property

7. In which of the following cases is the price of the contract of sale considered uncertain making the
contract void ab initio?

A. Sale of a specific cellphone whereby the price is left by the buyer and seller to the judgment of
a specified third person
B. Sale of a specific laptop whereby the price is the monthly salary of Atty. Juan Dela Cruz
C. Sale of a specific tablet whereby the price of P40,000 is fixed by the seller but voluntarily
accepted by the buyer
D. Sale of preferred stock of Globe Incorporated equivalent to the closing price of common stock
of Smart Incorporated in the Philippine Stock Exchange on October 4, 2020

1|Page RLACO/DSALES/NVALDERAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

8. A, an adult, sold and delivered a specific ballpen to M, a minor, at a reasonable price of P10. Is M
legally required to pay the reasonable price?

A. No, because the contract is covered by statute of fraud, therefore, unenforceable.

B. Yes, because the subject matter specific ballpen is a necessary.
C. No, because the contract is voidable, therefore, subject to annulment of contract.
D. Yes, because M is guilty of bad faith.

9. S, an insane, sold in writing a specific car to D, a demented person, at a price of P100,000. What
is the status of contract of sale?

A. Rescissible contract
B. Voidable contract
C. Unenforceable contract
D. Void contract

10. H and W entered into a contract of marriage on year 1990 without any ante-nuptial agreement. H,
through force and intimidation, compelled W to give consent and to sign the deed of sale involving
the exclusive property of W to H at a bargain price of P100,000 whereby W suffered lesion
amounting to P30,000. What is the status of the contract of sale?

A. Rescissible contract
B. Voidable contract
C. Unenforceable contract
D. Void contract

11. H and W entered into a contract of marriage on year 2020 with prenuptial agreement of complete
separation of property regime. H, through force and intimidated, compelled W to give consent and
to sign the deed of sale involving the exclusive property of W to H at a bargain price of P500,000
whereby W suffered lesion amounting to P130,000. What is the status of the contract of sale?

A. Valid contract
B. Voidable contract
C. Unenforceable contract
D. Void contract

12. Which of the following statements about bilateral promises to buy and to sell and unilateral promise
to buy or to sell is incorrect?

A. Bilateral promise to buy and sell is as good as perfected contract of sale.

B. Unilateral promise to buy or to sell accepted by the promissee is binding upon the promisor
despite the absence of option money.
C. Policitacion refers to unilateral promise to buy or to sell not accepted by the promise. Therefore,
it does not produce any effect.
D. None of the above

13. S and B orally agreed for the sale of a specific car at a price of P100,000. As a downpayment, B
paid with amount of P10,000 to S on the date of oral agreement. Delivery of the car will happen
after the full payment of the price which will happen 2 years after the date of oral agreement. Which
of the following statements is correct?

A. B may legally compel S to sign and execute the notarized deed of sale of car.
B. The oral contract of sale of car between S and B is unenforceable by court action.
C. If B decides to buy the car 2 years after the oral agreement, he must still pay the total purchase
price of P100,000 to S.
D. The oral contract entered between S and B is a contract of option perfected by the
downpayment by B to S.

2|Page RLACO/DSALES/NVALDERAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

14. I. The consideration contemplated to support an option must only be monetary

II. Without consideration that is separate and distinct from the purchase price, an option contract
cannot be enforced

A. Only I is True
B. Only II is True
C. Both are True
D. Both are False

15. S sold a specific van to B at a price of P100,000. Before the physical delivery of the said van to B,
B leased it back to S so the physical delivery did not prosper. What What type of constructive
delivery is present in the case at bar?

A. Traditio clavium or simbolica

B. Traditio longa manu
C. Traditio brevi manu
D. Traditio constitutum possessorium

16. S sold and delivered a mass of black pepper (100 sacks) in his specific warehouse to B at a lump
sum price P100,000 per sack. Which of the following statements is correct?

A. The contract of sale is void because the subject matter is not determinate at the time of
constitution of the contract.
B. If the content of the mass is 150 sacks, B will own all the mass of black pepper provided he will
pay P100,000 to S.
C. If the content of the mass is only 80 sacks, S is still required to deliver additional 20 sacks to B
unless there is stipulation to the contrary.
D. None of the above

17. S sells to B at P50 per liter the 300 liters of gasoline stored in his truck, which is unknown to the
them contains 500 liters. What is the status of the contract of sale between S and B?

A. The sale is void because the quantity available is more than the quantity sold
B. The sale is valid up to 500 liters of gasoline. B must pay for the additional 200 liters
C. The sale is valid up to 300 liters of gasoline. B becomes the owner of the 3/5 while S becomes
the owner of 2/5 thereof
D. The sale is rescissible because S will suffer lesion of mote than ¼ of the value of the gasoline
stock.

18. On August 1, 2020, S orally sold and delivered a specific laptop to B at a price of P25,000 under a
sale or return arrangement with a return period of one month. The contract provides the payment
of the price will be done on August 31, 2020. On August 15, 2020, B was robbed of the said laptop
by a holdaper. Which of the following statements is correct?

A. The contract of sale is unenforceable because it is covered by statute of fraud.

B. B is no longer required to pay the price of P25,000 because the contract of sale is extinguished
by robbery which is considered a fortuitous event.
C. B is still required to pay the price because of the concept of res perit domino.
D. The contract of sale is void ab initio because of the absence of subject matter.

19. The following are the exceptions to the general rule that ownership of the thing sold is acquired
only upon its delivery to the buyer, except:

A. When the seller and the buyer agree that ownership shall remain with the seller until full
payment of the purchase price
B. Contract to sell
C. Sale or return
D. Sale on approval, trial or satisfaction
E. Implied reservation of ownership

3|Page RLACO/DSALES/NVALDERAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

20. In a sale of immovable by the unit, that is, at a stated rate per unit:

I. If the vendor delivers less than the area agreed upon, the vendee may oblige the vendor
to deliver all that may be stated in the contract or demand for proportionate reduction of
the purchase price if delivery is not possible

II. If the vendor delivers more than the area stated in the contract, the vendee has the option
to accept only the amount agreed upon or to accept the whole area, provided he pays for
the additional area at the contract rate.

A. Only I is TRUE
B. Only II is TRUE
C. Both are TRUE
D. Both are FALSE

21. I. Where both the area and the boundaries of the immovable are declared, the area covered within
the boundaries of the immovables prevails over the stated area. In case of conflict, it is the
boundaries which should prevail.

II. The definition of a piece/tract of land/ground is not the area, calculated with more or less
certainty, mentioned in the description, but the boundaries therein laid down, as enclosing the land
and indicating its limits (metes and bounds)

A. Only I is TRUE
B. Only II is TRUE
C. Both are TRUE
D. Both are FALSE

22. T surreptitiously stole the specific necklace of S. Afterwards, T sold and delivered the said necklace
to B at a price of P10,000. B acquired the said necklace in good faith and for value. Which of the
following statements is correct?

A. S can legally recover the necklace from B even without reimbursing B.

B. S may legally recover the necklace from B but S must reimburse B of the amount of P10,000.
C. S can never legally recover the necklace from B because the latter is a purchaser in good faith
and for value.
D. S cannot legally recover the necklace from B unless he reimburses B of the amount of P10,000.

23. T surreptitiously stole the specific necklace of S. Afterwards, T conducted a public auction then
sold and delivered the said necklace to B at a price of P10,000. B acquired the said necklace in
public auction. Which of the following statements is correct?

A. S can legally recover the necklace from B even without reimbursing B.

B. S may legally recover the necklace from B but S must reimburse B of the amount of P10,000.
C. S can never legally recover the necklace from B because the latter is a purchaser in good faith
and for value.
D. S cannot legally recover the necklace from B unless he reimburses B of the amount of P10,000

24. Lebron is the registered owner of a vacant lot. Kevin stole the certificate of title of the registered lot
of Lebron and through connivance with a notary public, he was able to execute a notarized deed
of sale through forging the signature of Lebron. With connivance with the Registry of Deeds, Kevin
was able to transfer the title of the lot to his name. Afterwards, Kevin sold the said lot to Carmelo
who acquired the said lot after inspecting the title and the vacant lot. Carmelo is a purchaser in
good faith and for value. Which of the following statements is correct?

A. The contract of sale between Kevin and Carmelo is void because it is the product of a previous
void contract
B. Lebron can recover the land from Carmelo because the title acquired by Carmelo is that of a
thief even without reimbursing Carmelo.
C. Lebron can recover the land from Carmelo provided he will reimburse him for the price Carmelo
paid.
D. Lebron cannot recover the land from Carmelo because a forged document or deed of sale, in
case of registered lot, can be a root of a valid title if the title is already in the hand of a purchaser
for value and in good faith.

4|Page RLACO/DSALES/NVALDERAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

25. Liam sold Gab a parcel of registered land for P300,000. The sale is evidence by a deed of sale
(DOS). One month later, Liam sold the same to Apple for P400,000 evidenced by another DOS.
With knowledge of the sale to Gab, Apple immediately took possession of the land and registered
the DOS with the RD. The ownership over the land will be transferred to?

A. Gab, because he can present the oldest title

B. Gab, because Apple took possession of the land in good faith
C. Apple, because she is the first to register the deed of sale
D. Apple, because she took possession of the land first

26. Nico verbally appointed Rog as his agent to sell Nico’s land. On Jan 3, Rog sold the land to Apa
who took possession thereof. However, on Jan 2, Nico, without informing Rog, had also sold the
same land to Reg. The deeds of sale were not registered. Who has a better right?

A. Reg, because the sale to Apa by Rog was void.

B. Reg, because the land was first sold to him following the rule on double sales
C. Apa, because he was first in possession in GF
D. Apa, because Nico duly authorized Rog to sell the land.

27. S sold his watch to B in a public document. However, B informed S that he would obtain actual
delivery of the watch after 3 days. The day after the sale to B, S sold the same watch to X in a
private document and X immediately took possession of the watch. X was not aware of the sale to
B. Who has a better right over the watch?

A. B, because he has older title

B. B, because he first took constructive possession of the watch in good faith
C. X, because he first took actual possession of the watch in good faith
D. X, because X has not registered the watch in good faith

28. On May 1, S sold his registered lot to X. The deed of sale was in a private instrument. On May 3,
S sold the same lot to Y in a public instrument. On May 5, S sold again the said lot to Z in a public
instrument. Z immediately registered the sale with Register of Deeds on May 5. X took actual
possession of the lot on May 6. X, Y and Z were not aware of the sale made to others. Who among
the buyers has the better right?

A. X because he first took actual possession in good faith.

B. X because he has the oldest title in good faith.
C. Y because he first took constructive possession in good faith
D. Z because he is the first registrant in good faith
E. None of the above

29. Who shall suffer the risk of complete loss of the determinate thing of the object of the contract of
sale after perfection of contract of sale but before the delivery of the subject matter to the buyer?

A. Seller on the basis of res perit domino

B. Buyer on the basis of res perit domino
C. Buyer because he is entitled to the fruits after perfection of contract of sale
D. Seller provided the buyer has not fully paid the price

30. Which of the following is the proper legal remedy to be availed by the buyer if the seller committed
a breach of contract of sale of specific thing by non-delivering the subject matter to the buyer?

A. File an action for specific performance or exact fulfilment plus damages

B. File an action for reformation of instrument plus damages
C. File an action for annulment of contract of sale plus damages
D. File an action for declaration of nullity of contract of sale plus damages

5|Page RLACO/DSALES/NVALDERAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

31. On January 1, 2020, S sold and delivered a specific house and lot to B with a stipulation that the
price of P1,500,000 will be paid on July 1, 2020. The contract provides that in case of non-
compliance by B on the payment of the price, the contract of sale of house and lot will be
automatically cancelled on the date of default. On July 1, 2020, B defaulted in the payment of the
price. Which of the following statements is correct?

A. The contract of sale of house and lot is automatically cancelled on July 1,2020 based on autonomy
of contract.
B. B may still pay the price of P1,500,000 after his default on July 1,2020 provided notarial or judicial
demand for rescission has not yet been made by the seller to him.
C. Both A and B
D. None of the above

32. Which of the following is not a right available to an unpaid seller in a contract of sale?

A. Right to possessory lien on the goods or right to retain them while he is in possession of them
B. Right of stoppage in transit
C. Right of resale
D. Right to rescind the sale
E. Right to declaration of nullity

33. Which of the following is not a ground for right of resale by an unpaid seller

A. The goods are of perishable nature

B. The seller has expressly reserved the right to resell the goods in case the buyer should make
default.
C. The buyer has been in default for an unreasonable time.
D. The buyer becomes insolvent.

34. Which of the following is a ground for right to rescind the sale by an unpaid seller?

A. The seller has expressly reserved the right to resell the goods in case the buyer should make
default.
B. The buyer has been in default for an unreasonable time.
C. Either A or B
D. None of the above

35. On January 1, 2021, S sold a specific lot to B. Unfortunately, the said lot is encumbered by a
nonapparent and unregistered burden or servitude of septic tank. On July 1, 2022, B discovered
the said servitude. What is the legal remedy still available to B?

A. Action for rescission or cancellation of the sale of the lot

B. Action for indemnification for damages
C. Either a or b
D. Neither a nor b

36. In a contract of sale of personal property, the price of which is payable in installments, the
vendor/lessor may exercise any of the following alternative remedies except?

A. Exact fulfillment of the obligation should the vendee fail to pay any installment
B. Cancel the sale, should the vendee’s failure to pay cover any installments
C. Foreclose the chattel mortgage on the thing sold, if one has been constituted should the
vendee’s failure to pay cover two or more installments
D. None of the above

37. James sold a car to Jan where Jan paid an initial payment and issued a promissory note for the
balance payable after six months with stipulated interest. Unfortunately, Jan defaulted to pay the
note upon maturity. James foreclosed the mortgage constituted on the car and sold the same at
public auction, which resulted into deficiency judgment. An action for collection was instituted but
Jan sought the application of the Recto Law. Which is incorrect?

A. James may recover the unpaid balance of the purchase price against Jan even when the latter
shall have lost by foreclosure the subject matter of the sale.
B. James may not recover the unpaid balance since he shall have no further action against Jan
to recover any unpaid balance from the price and any agreement to the contrary shall be void.

6|Page RLACO/DSALES/NVALDERAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : icarecpareview@gmail.com

C. The provision of Recto Law cannot apply in a sale where the price is payable partly in cash
and partly in one term because the same is not a sale on installment but actually “straight sale”.
D. None of the above

38. Apa and Rog entered into a contract of lease with option to buy the car of the former for a term of
two years. For three months, Rog failed to pay the rentals and by reason thereof, Apa repossessed
the car. Which is correct?

A. Apa can collect the unpaid rentals for the duration of the term of the lease of 2 years
B. When Apa deprived Rog the possession of the leased car, he has no further action against the
latter for any unpaid rentals
C. Apa shall return the rentals to Rog by virtue of the rescission of the contract of lease with option
to buy even there is a stipulation that rents paid shall not be returned to the Rog since such
stipulation is void
D. None of the above

39. True or False. No installment payment made by the buyer in a subdivision or condominium project
for the lot or unit he contracted to buy shall be forfeited in favor of the owner or developer when the
buyer, after due notice to the owner or developer, desists from further payment due to the failure
of the owner or developer to develop the subdivision or condominium project according to the
approved plans and within the time limit to comply. Such buyer may, at his option be reimbursed
the total amount paid including amortization interest and delinquency interest.

40. True or False. Real estate tax and assessment on a lot or unit shall be paid by the owner or
developer without recourse to the buyer for as long as the title has not passed to the buyer.
Provided, however, that if the buyer has taken possession of and occupied the lot or unit, he shall
be liable to the owner or developer for such tax and assessment effective the year following such
taking of possession and occupancy.

ANSWER KEY

1. A 35. B
2. C 36. B
3. A 37. B
4. B 38. B
5. TRUE 39. FALSE
6. B 40. TRUE
7. B
8. B
9. C
10. D
11. B
12. B
13. A
14. B
15. D
16. C
17. C
18. C
19. C
20. C
21. C
22. A
23. B
24. D
25. A
26. A
27. B
28. D
29. A
30. A
31. B
32. E
33. D
34. C

7|Page RLACO/DSALES/NVALDERAM A

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