LAW ON OBLIGATIONS

1. The obligation arising from torts or quasi-delicts is demandable not only for one's own acts or omissions,
but also for those of persons for whom one is responsible. The following are the persons who are liable for
the torts or quasi-delict committed by persons under their responsibility, except
a. The father and, in case of his death or incapacity, the mother, are responsible for the damages caused by
the minor children who live in their company.
b. Guardians are liable for damages caused by the minors or incapacitated persons who are under their
authority and live in their company.
c. The owners and managers of an establishment or enterprise are likewise responsible for damages caused
by their employees in the service of the branches in which the latter are employed or on the occasion of
their functions.
d. Employers shall be liable for the damages caused by their employees and household helpers acting within
the scope of their assigned tasks, even though the former are not engaged in any business or industry.
e. Teachers or heads of establishments of arts and trades shall be liable for damages
caused by their pupils and students or apprentices who are within their custody.
f. Boyfriend or girlfriend is liable for the quasi-delict committed by their partner during their
relationship.

2. How shall persons enumerated under preceding number exempt themselves from responsibilities
arising from torts committed by persons under their responsibility?
a. By proving they exercise extraordinary diligence to prevent damage.
b. By proving that they observed all the diligence of a good father of a family to prevent damage.
c. By proving that there is no contract between the plaintiff and defendant.
d. By proving that the guilt is not proven beyond reasonable doubt.

3. What is the nature of liability of two or more persons who are liable for quasi-delict or tort a.k.a. joint
tortfeasors?
a. Solidary
b. Joint
c. Pro-rata
d. Proportionate

4. While trying to pass each other on a narrow bridge, a passenger bus and a private automobile collided,
and two persons, A and B, were injured. A was a passenger of the bus while B was a pedestrian. The bus
company was made a defendant although its employee driver was the one driving the bus and the owner-
driver of the private car was also made a defendant. What can be the source of obligation of the bus company
as regards to A, the passenger?
a. Contract of carriage for failure to exercise extra-ordinary diligence
b. Culpa aquiliana or quasi-delict if he exercised diligence of a good father of a family in
selecting his employees.
c. Culpa criminal or crime and considered a principal liability
d. Quasi-contract

5. Using the same data in preceding number, what can be the source of obligation of the driver of
passenger bus as regards to A, the passenger?
a. Contract of carriage
b. Quasi-contract
c. Law
d. Quasi-delict or crime at the option of A
6. Using the same data in preceding number, what can be the source of obligation of the bus company as
regards to B, the pedestrian?
a. Contract of carriage
b. Culpa aquiliana if he fails to exercise the diligence of a good father of a family in selecting his employees
c. Culpa criminal or crime and considered a principal liability
d. Quasi-contract

7. Using the same data in preceding number, what can be the source of obligation of the bus driver as
regards to B, the pedestrian?
a. Contract of carriage
b. Quasi-contract
c. Law
d. Quasi-delict or crime at the option of B

8. Using the same data in preceding number, what can be the source of obligation of the owner-driver of
private car as regards to A, the passenger?
a. Contract of carriage
b. Quasi-contract
c. Law
d. Quasi-delict or crime at the option of A

9. Using the same data in preceding number, what can be the source of obligation of the owner-driver of
private car as regards to B, the pedestrian?
a. Contract of carriage
b. Quasi-contract
c. Law
d. Quasi-delict or crime at the option of B

10. Which of the following statements concerning the obligation to deliver a thing is correct?
I. A generic or indeterminate thing is only indicated by its kind, without being designated and distinguished
from others of the same kind.
II. A determinate or specific thing or delimited generic thing is one that is individualized and can be
identified or distinguished from others of its kind.

a. Neither I nor II
b. Both I and II
c. I only
d. II only

11. The following are examples of natural obligations that cannot be enforced by court action but depends
upon the voluntarily fulfillment of debtor, except
a. The obligation of a debtor to pay a loan evidenced by a written contract of loan but a period of 10 years
had already lapsed from maturity date without demand from creditor.
b. The obligation of a debtor to reimburse a third person who has paid the debtor's obligation after it has
already lapsed.
c. The obligation of a testate or intestate heir to pay the debt of a decedent beyond the value of the property
which he received by will or by the law of intestacy from the estate of the deceased.
d. The obligation of the employer of a "Kasambahay" to pay the 13th month pay of the latter.
12. The following are the sources of civil obligation demandable in a court of law, except
a. Law
b. Contracts
c. Quasi-contracts
d. Quasi-delicts or Culpa Aquiliana or Torts
e. Delict or Crime or acts/omissions punishable by law
f. Religious doctrines

13. It is a source of an obligation that refers to the principles and regulations established in a community
by some authority and applicable to its people, whether in the form of legislation or of custom and policies
recognized and enforced by judicial decision.
a. Law
b. Contract
c. Quasi-contract
d. Quasi-delict

14. Which of the following statements concerning obligations arising from law is incorrect?
a. Only obligations expressly determined in the Civil Code or in special laws are demandable.
b. The law cannot exist as a source of obligations, unless the acts to which its principles may be applied
exist.
c. The obligations and correlative rights arising from law shall be governed by the law by which they are
created.
d. The obligations derived from law are presumed.

15. What is the source of obligation of parents to provide support to their children?
a. Law
b. Contracts
c. Quasi-contracts
d. Quasi-delicts
e. Delict

16. It is a source of an obligation that refers to meeting of minds between two persons whereby one binds
himself, with respect to the other, to give something or to render some service.
a. Law
b. Contract
c. Quasi-contract
d. Quasi-delict

17. Which of the following statements concerning obligations arising from contracts are correct?
I. Obligations arising from contracts have the force of law between contracting parties.
II. Obligations arising from contracts should be complied with in good faith.
a. I only
b. II only
c. Both I and II
d. Neither I nor II

18. It is a source of an obligation that refers to a juridical relation which arises from certain lawful, voluntary
and unilateral act, to the end that no one may be unjustly enriched or benefited at the expense of another.
a. Delict
b. Quasi-contract
c. Contract
d. Quasi-delict

19. Which of the following statements concerning the kinds of quasi-contract is correct?
I. Negotiorum Gestio refers to the voluntary management of the property or affairs of another without the
knowledge or consent of the latter.
II. Solutia Indebiti refers to the juridical relation which is created when something is received when there
is no right to demand it and it was unduly delivered through mistake.
a. I only
b. II only
c. Both I and II
d. Neither I nor II

20. The following are examples of quasi-contracts, except

a. A person receives something when there is no right to demand it or it was unduly delivered through
mistake.
b. A person takes charge of the agency or management of business or property of another without authority
or without consent of the latter.
c. A stranger gives support to a child of another person without the knowledge of the person obliged to give
support.
d. A person saves the property of another person during fire, flood, storm or other calamity without the
knowledge of the owner.
e. A person caused injury to another person through fault of negligence.

21. What is the nature of the responsibility or liability of two or more officious managers in a negotiorum
gestio?
a. Generally it shall be solidary unless the management was assumed to save the thing or business from
imminent danger which will make their liability to be joint only.
b. Generally it shall be joint unless the management was assumed to save the thing or business from
imminent danger which will make their liability to be solidary.
c. It is always solidary.
d. It is always joint.

22. The officious manager in a negotiorum gestio shall be liable for any fortuitous event in any of the
following instances, except
a. If he undertakes risky operations which the owner was not accustomed to embark upon.
b. If he has preferred his own interest to that of the owner.
c. If he fails to return the property or business after demand by the owner.
d. If he assumed the management in good faith.

23. In which of the following instances will negotiorum gestio arise?

a. When the property or business is not neglected or abandoned.
b. If in fact the manager has been tacitly authorized by the owner.
c. Neither A nor B.
d. Either A or B.

24. What is the nature of responsibility or liability of two or more payees in solutio indebiti when there has
been payment of what is not due?
a. Solidary
b. Joint
c. Pro-rata
d. Subsidiary
25. When will a person who accepts an undue payment of a sum of money be liable for interest?
a. When he receives the undue payment in bad faith.
b. When he receives the undue payment in good faith.
c. When he receives the undue payment, regardless of being bad or good faith.
d. Under all instances.

26. When will a person who in good faith accepts an undue payment of a thing certain or determinate be
responsible for the impairment or loss of the same or its accessories and accessions?
a. He is liable only in so far as he has thereby been benefited.
b. When he is not guilty of negligence.
c. He is liable in any instances.
d. When the reason of loss is fortuitous event.

27. It is a source of an obligation that refers any act or omission punishable by law.
a. Crime or Delict
b. Quasi-contract
c. Contract
d. Quasi-delict

28. Is a person criminally liable also liable to pay civil damages to private offended party?
a. Yes, as a general rule, unless the crime committed does not cause civil damages.
b. Yes in all cases.
c. No unless the People of the Philippines ask for damages.
d. No because criminal liability means imprisonment only.

29. What is the nature of civil liability of two or more persons (criminals) who are convicted of crime?
a. Solidary
b. Joint
c. Pro-rata
d. Subsidiary

30. Article 100 of the Revised Penal Code provides that every person criminally liable for a felony is also
civilly liable for damages. Under Article 12 of the Revised Penal Code, the following persons will not be
imprisoned (exempted from criminal liability) but will still be liable for civil damages (civil liability) for
their acts, except
a. An imbecile or insane person.
b. A minor or any person under 18 years of age.
c. Any person who acts under the compulsion of an irresistible force.
d. Any person who acts under the impulse of an uncontrollable fear of an equal or greater
injury.
e. Any person who acts under self-defense or any person who acts in the performance of
his official duty or any wife suffering from battered woman syndrome who killed or
injured his batterer.

31. The civil liabilities arising from crimes are as follows, except
a. Restitution which refers to restoration of the thing itself even though it be found in the possession of a
third person who has acquired it by lawful means.
b. Reparation of the damage caused which shall be determined by the Court taking into consideration of the
price of the thing and its sentimental value.
c. Indemnification for consequential damages which shall include not only those caused the injured party
but also those suffered by his family or by a third person by reason of the crime.
d. Compromise of the criminal liability.

32. What degree of evidence must be proved by the prosecution for the conviction of an accused of a crime?
a. Proof beyond reasonable doubt
b. Clear and convincing evidence
c. Preponderance of evidence
d. Substantial evidence

33. What degree of evidence must be proved by the private offended party to be entitled to civil damages
arising from crime or delict?
a. Proof beyond reasonable doubt
b. Clear and convincing evidence
c. Preponderance of evidence
d. Substantial evidence

34. What degree of evidence must be proved by the plaintiff in order to recover civil damages arising
contract or quasi-delict?
a. Proof beyond reasonable doubt
b. Clear and convincing evidence
c. Preponderance of evidence
d. Substantial evidence

35. In the prosecution for the crime of criminal negligence, the accused is acquitted on the ground of failure
of the prosecution to prove his guilt beyond reasonable doubt. May the private offended party file another
civil case based on quasi-delict?
a. Yes because a single act may result to different sources of obligation and crime and quasi-delict are
separate and distinct sources of civil liability but the private offended party (plaintiff) cannot recover twice
civil damages for a single act since civil damages are awarded to compensate the victim for the injury
caused to him but not to unjustly enrich him.
b. No because the accused shall not be subject to double jeopardy.
c. Yes only if there is a contract between the contending parties.
d. No because the private offended party is barred by the principle of res judicata.

36. It refers to a source of an obligation wherein a person by act or omission causes damage to another,
there being fault or negligence.
a. Contract
b. Quasi-contract
c. Quasi-delict or culpa aquiliana or torts
d. Delict

37. The following are the requisites in order that civil liability for quasi-delict or torts may exist, except
a. There is pre-existing relation between the offender and offended parties.
b. There exists a wrongful act or omission imputable to the defendant by reason of his fault or negligence.
c. There exists a damage or injury which must be proved by the person claiming recovery.
d. There must be a direct causal connection or a relation of cause and effect between the fault or negligence
and the damage or injury, or that the fault or negligence be the cause of the damage or injury.

38. Negligence or culpa which results to civil liability arising from quasi-delict or torts is also known as
a. Culpa criminal
b. Culpa aquiliana
c. Culpa contractual
d. Culpa liberal

39. The following are the distinctions between quasi-delict and crime or delict, except
a. The right violated by a quasi-delict is a private right while the right violated by a crime is a public right.
b. Every quasi-delict gives rise to liability for damages to the injured party but there are crimes from which
no civil liability arises.
c. Criminal liability can never be compromised except in criminal negligence but liability from quasi-delict
can be compromised.
d. In quasi-delict, criminal intent is not necessary, while in crime, criminal intent is necessary except in
criminal negligence.
e. In order to convict a person of crime, only preponderance of evidence is required but in order to prove
negligence in quasi-delict, proof beyond reasonable doubt is required.

40. In case of tort, when will the plaintiff or injured party be barred or precluded from recovering
damages?
a. When plaintiffs own negligence was the immediate, proximate and sole cause of his injury.
b. When the reason of the injury is a fortuitous event but with contributory negligence of tortfeasor.
c. When plaintiff's negligence was only contributory, the immediate and proximate cause of the injury being
the defendant's lack of due care.
d. When the immediate and proximate cause of his injury is the negligence of the tortfeasor.

41. What is the definition of an obligation under Article 1156 of the New Civil Code of the Philippines?
a. Juridical necessity to do or not to do.
b. Juridical necessity to give or not to give.
c. Juridical necessity to give, to do or not to do.
d. Juridical necessity to give, not to give, to do or not to do.

42. Which of the following statements best describes a negative obligation?

a. It refers to an obligation which consists of giving or doing something.
b. It refers to an obligation which consists to the delivery or giving of personal or real object.
c. It refers to an obligation which consists of doing a particular prestation but not delivery of an object.
d. It refers to an obligation which consists of abstaining from some act.

43. Which of the following is a positive and real obligation?

a. Obligation to teach
b. Obligation not to smoke in public place
c. Obligation to deliver the goods
d. None of the above

44. The following are the essential elements of an obligation, except

a. An active subject, who has the power to demand prestation, also known as the oblige or creditor.
b. A passive subject, who is bound to perform the prestation, also known as the obligor or debtor.
c. Object or prestation, which is the promise or particular conduct to be performed in the performance of
an obligation, and may consist of giving, doing or not doing a thing.
d. Efficient cause, the tie which binds the parties to the obligation, also known as juridical tie or vinculum.
e. The form in which the obligation is manifested.

45. Among the essential elements of an obligation, which are considered the personal elements?
a. Obligee and obligor
b. Prestation and vinculum
c. Obligee and vinculum
d. Prestation and obligor

46. The following statements concerning an obligation are correct, except

a. The obligation to give is one in which the prestation consists in the delivery of a movable or an immovable
thing.
b. The obligation to do includes all kinds of work or services.
c. The obligation not to do consists in abstaining from some act.
d. The obligation not to give is a positive obligation.

47. The following are the requisites of a prestation or an object of an obligation, except
a. It must be possible, physically and juridically.
b. It must be determinate, or, at least, determinable according to pre-established elements or criteria.
c. It must have possible equivalent in money.
d. It must be a positive obligation only.

48. The following are examples of vinculum or efficient cause or juridical tie of an obligation, except
a. Relation established by law
b. Relation established by contract
c. Relation established by quasi-contract
d. Relation established by quasi-delict
e. Relation established by delict or crime
f. Relation established by natural obligation
49. Which of the following obligations is not enforceable by a court action?
a. Legal obligation
b. Contractual obligation
c. Civil obligation
d. Religious obligation

50. Which of the following statements concerning the distinctions between civil obligation and natural
obligation are true?
I. Civil obligations derive their binding force from positive law, while natural obligations derive their
binding effect from equity and natural justice.
II. Civil obligations can be enforced by court action or the coercive power of public authority, while the
fulfillment of natural obligations cannot be compelled by court action but depends exclusively upon the
good conscience of the debtor. However, voluntarily fulfilment of natural obligation by the debtor will
preclude him from asking for reimbursement from the creditor of the amount he has voluntarily paid.

a. I only
b. II only
c. Both I and II
d. Neither I nor II

LAW ON CONTRACTS

1. What is the nature of contract to constitute a pledge, a deposit, a loan or a commodatum?

a. ReaI contract
b. Consensual contract
c. Formal contract

2. Formal or solemn contracts are perfected by

a. Delivery of the object of a contract.
b. Execution of formalities required by law.
c. Mere consent by contracting parties.
d. Provisions of the law.

3. As a general rule, contracts shall be obligatory, in whatever form they may have been entered into,
provided all the essential requisites for their validity are present. However, when the law requires that a
contract be in some form in order that it may be valid or enforceable, or that a contract be proved in a certain
way, the requirement is absolute and indispensable. The following contracts are required to be in certain
form to be valid also known as formal contracts or solemn contracts, except
a. Negotiable instruments must be made strictly in the form provided by the Negotiable Instruments Law to
be considered negotiable.
b. Contract of marriage requires the contracting parties to be man and woman, both at least 18 years old,
with marriage license, and personal appearance before solemnizing officer with authority to solemnize
marriage.
c. Donations of personal property in excess of PS,000 must be made and accepted in writing to be valid.
d. Donations of real property must be made and accepted in public instruments to be valid.
e. The antichretic agreement including the principal and interest of the contract of loan must be specified in
writing to be valid for the contract of antichresis to be valid.
f. The agreement to pay interest in a contract of loan must be in writing to be valid.
g. Registration of chattel mortgage is necessary for its validity.
h. A contract of partnership to which real property or real rights are contributed must be in a public
instrument, with an inventory of real attached there, to be valid.
i. Sale of a piece of land by the agent in the name of the principal, the authority of the agent to sell the land
must be in writing for such contract of sale to valid.
j. Sale of community/conjugal property by one of the spouses, there must be authority given by the other
spouse to the selling spouse.
k. The lease of personal property for a period longer than one year should be in writing to be valid.

4. Which of the following is a valid agreement or stipulation?

a. Oral agreement to pay 2% per month interest based on the principal amount of the loan
b. Oral contract of antichresis
c. Written contract of sale of a piece of land by an agent in the name of the principal wherein the agent has
oral authority to sell the land
d. Oral contract of partnership wherein the delivery of money will be done after 5 years.

5. The following must appear in a public document in order to insure its efficacy or for mere convenience
but not for its validity, except
a. Acts or contracts which have for their object the creation, transmission, modification or extinguishment
or real rights over immovable property.
b. The cession, repudiation or renunciation of hereditary rights or of those of the conjugal partnership of
gains.
c. The power to administer property, or any other power which has for its object an act appearing or which
should appear in a public document, or should prejudice a third person
d. The cession of actions or rights proceeding from an act appearing in a public document
e. Contract of lease of movable property

6. Which contract must be in a written instrument, either public document or private document, in order to
insure its efficacy or for mere convenience but not for its validity?
a. Contracts where the amount involved exceeds five hundred pesos.
b. Contracts where the contracting parties are capacitated.
c. Contracts where the subject matter is movable or personal property
d. Contracts to be performed within one year from the making thereof.

7. If the law requires a document or other special form to a contract for mere convenience but not for validity
or enforceability, what is the right of the contracting parties once the contract is perfected?
a. The contracting parties may annul the contract.
b. The contracting parties may rescind the contract.
c. The contracting parties may compel each other to observe the form or document required by law.
d. The contracting parties need not execute the required form.

8. From the moment of perfection of a contract, what is the extent of its binding effect?
a. The parties are bound only to the fulfillment of what has been expressly stipulated in the contract.
b. The parties are bound only to the natural consequences of the contract.
c. The parties are bound not only to the fulfillment of what has been expressly stipulated in the contract but
also to all the consequences which, according to their nature, may be in keeping with good faith, usage and
law.

9. How is the nature of the contract determined by the court?

a. Contract is what the parties choose to call them.
b. Contract is determined by the stipulations of the parties.
c. Contract is determined by the principles of law.
d. Contract is determined by the surrounding circumstances.

10. As a general rule, no one may contract in the name of another without being authorized by the latter or
unless he has by law a right to represent him. What is the status of a contract entered into in the name of
another by one who has no authority or legal representation, or who has acted beyond his powers?
a. Rescissible
b. Unenforceable
c. Voidable
d. Null and void

11. The following are the order of priority regarding rules that shall govern innominate contracts, except
a. The stipulation of the parties
b. The provisions of Obligations and Contracts
c. The rules governing the most analogous contracts
d. The customs of the place
e. The provisions of Tax Code

12. Which of the following statements pertaining to the stages of a contract refers to preparation
or conception stage?
a. It refers to the first stage that involves preliminary negotiations and bargaining, discussion of terms and
conditions, with no arrival yet of a definite agreement.
b. It refers to the second stage that pertains to the point when there is meeting of minds between the
parties on a definite subject matter and valid cause.
c. It refers to the last stage that pertains to the point when the contract has been fulfilled resulting in its
accomplishment.

13. Freedom to contract is one of the liberties of the people of the state as guaranteed by due process
clause. This means that the contracting parties may establish such stipulations, clauses, terms and
conditions as they may deem convenient, provided they are not contrary to the following, except
a. Law
b. Religion
c. Morals
d. Good customs
e. Public order
f. Public policy
14. An audit staff and an auditing firm orally entered into a contract of employment whereby it is stipulated
that overtime premium and holiday pay are waived. Is the waiver valid?
a. Yes because of mutuality of contract.
b. Yes because of autonomy of contract.
c. No because it is contrary to law and public policy.
d. No because it is entered into orally but not in writing.

15. In an action for ejectment, the lessee interposed the defense that the contract of lease authorized
them to continue occupying the premises so long as they pay their rents. Is the defense of the lessee
tenable?
a. No because it violates mutuality of contract which provides that the contract must bind both contracting
parties and its validity or compliance cannot be left to the will of one of them.
b. Yes because it is stipulated in the contract.
c. No because it is contrary to morals and good customs.
d. Yes because it does not violate public order and public policy.

16. A stipulation provides that the student's scholarship is good only if he continues in the same school,
and that he waives his right to transfer to another school without refunding the equivalent of his
scholarship in cash is null and void because it is contrary to
a. Law
b. Morals
c. Public order
d. Public policy

17. A stipulation which provides that in the event of nonpayment of the debt at maturity that the creditor
may appropriate for himself the thing given as security is null and void because it is contrary to
a. Morals
b. Good customs
c. Law
d. Public order

18. A stipulation which provides that a person shall marry a person in consideration of money is null and
void because it is contrary to
a. Law
b. Morals and good customs
c. Public order
d. Public policy

19. The following stipulations for common carrier shall be considered unreasonable, unjust and
contrary to public policy, therefore null and void, except
a. That the goods are transported at the risk of the owner or shipper.
b. That the common carrier need not observe any diligence in the custody of the goods.
c. That the common carrier will not be liable for any loss, destruction, or deterioration of the goods.
d. A stipulation between the common carrier and the shipper or owner limiting the liability of the former for
the loss, destruction, or deterioration of the goods to a degree less than extraordinary diligence if in
writing and supported by a valuable consideration.

20. The following stipulations for common carrier shall be considered unreasonable, unjust and
contrary to public policy, therefore null and void, except
a. That the common carrier shall exercise a degree of diligence less than that of a good father of a family,
or of a man of ordinary prudence in the vigilance over the movables transported.
b. That the common carrier shall exercise a degree of diligence less than that of extraordinary diligence in
the transportation of passengers.
c. That the common carrier shall not be responsible for the acts or omission of his or its employees.
d. That the common carrier's liability for acts committed by thieves, or of robbers who do not act with
grave or irresistible threat, violence or force, is dispensed with or diminished.
e. That the common carrier is not responsible for the loss, destruction, or deterioration of goods on
account of the defective condition of the car, vehicle, ship, airplane or other equipment used in the
contract of carriage.
f. That the common carrier is not responsible for the acts of robbers who act with grave or irresistible
threat, violence or force, or that the common carrier's responsibility is dispensed with or diminished in
case of acts of robbers who act with grave or irresistible treat.

21. The hotel-keeper and the guests agree that the responsibility of the former as set forth in Articles 1998
to 2001 of Civil Code regarding necessary deposits brought by the guests is suppressed or diminished. It
was also stipulated that the hotel-keeper is free from responsibility to the effect
that he is not liable for the articles brought by the guest. Are the stipulations valid?
a. They are always void for being contrary to law and public policy.
b. They are valid if agreed to in writing.
c. They are valid provided the hotel-keeper properly posted the notices containing the waiver in the rooms.
d. They are only void if they are entered into orally.

22. A stipulation in a contract of loan providing for 10% interest per month is
a. Usurious
b. Unconscionable
c. Voidable
d. Rescissible

23. Two persons agreed in a contract which provides for the concealment of a public offense or the
suppression of evidence or the stifling of a criminal prosecution for a certain consideration. Is the stipulation
valid?
a. Yes because mutuality of contract provides that its validity or compliance cannot be left
to the will of one of them.
b. Yes because the obligatory force of a contract bind both contracting parties.
c. No because the stipulation is contrary to law and public policy.
d. No because the stipulation is contrary to mutuality of contract.

24. An agreement was entered into by the parties which provides that either one of them may terminate the
contract for the violation of any of its terms and conditions. Is this stipulation valid?
a. No because it violates mutuality of contract which provides that its validity or compliance cannot be left
to the will of one of them.
b. Yes because the validity or compliance is not entirely left to the will of one of the contracting parties, but
it merely gives the one party the right to declare such contract cancelled and of no effect in case of breach
of contract by other party.
c. No because it violates the freedom to enter into contract.
d. Yes because the right to rescind a contract cannot be waived.

25. The contract provides that the determination of the performance is left to of a third person. Is the
stipulation valid?
a. No because it is contrary to law, morals, good customs, public order or public policy.
b. No because it violates mutuality of contract.
c. Yes because the determination of the performance of contract may be left to a third person, whose
decision shall not be binding until it has been made known to both contracting parties.
d. Yes because the determination of the third person is obligatory whether or not it i s evidently inequitable.
26. What is the remedy of the injured party in case the determination of the performance of contract by the
third person designated by the contracting parties is evidently inequitable?
a. The injured party may ask the court for declaration of nullity of contract.
b. The injured party may ask the court for the rescission of contract.
c. The injured party may ask the court to decide what is equitable under the circumstances.
d. The injured party may ask the court for annulment of contract.

27. Relativity of contract provides that contract takes effect only between the following, except
a. Contracting parties
b. Assigns of contracting parties
c. Heirs of contracting parties
d. Third persons

28. Obligations and rights arising from contracts are generally transmissible to the parties' heirs and
assigns. The following are considered intransmissible, except
a. Those which are purely personal.
b. Those which are provided by law to be intransmissible.
c. Those which are stipulated by the party to be intransmissible.
d. Those which are based on commercial transactions.

29. A person died leaving liabilities. Are the heirs liable for the obligations of the decedent?
a. No because there is no privity between them and the decedent.
b. No because the heirs are not the contracting parties.
c. Yes even beyond the property they received because contracts take effect between the parties, their
assigns and heirs.
d. Yes but not beyond the property they received because there is privity between them and their
predecessor.

30. A stipulation which is considered an exception to the relativity of contract is called

a. Stipulation pour autrui a.k.a. stipulation in favor of third person
b. Stipulation in favor of the heirs
c. Stipulation in favor of assigns
d. Stipulation in favor of contracting parties

31. The following are the requisites of stipulation pour autrui or stipulation in favor of third person, except
a. There must be stipulation in favor of a third person.
b. The stipulation should be a part, not the whole, of the contract.
c. The contracting parties must have clearly and deliberately conferred a favor upon a third person and not
a mere incidental benefit or interest.
d. The favorable stipulation should not be conditioned or compensated by any kind of obligation whatever.
e. The third person must have communicated his acceptance to the obliger before its revocation.
f. One of the contracting parties does not bear the legal representation or authorization ofthe third party.
g. The stipulation in favor of third person must be specified in writing.

32. The following statements concerning stipulation pour autrui or stipulation in favor of third person are
correct, except
a. A stipulation in favor of third person has no binding effect in itself before its acceptance by the party
favored.
b. Before acceptance by the third person, the contracting parties; by mutual agreement, may modify the
contract or revoke it.
c. A mere incidental interest or benefit is not within the doctrine of stipulation pour autrui.
d. The stipulation pour autrui still exists even if the contract is considered null and void.

33. A mortgages his land to Band the mortgage is registered in Registry of Property. Afterwards, A
sells the land to C. Is the mortgage contract binding upon C?
a. No because C is not a party to the contract.
b. No because there is no privity between Band C.
c. Yes even if the mortgage contract is not registered.
d. Yes because in contracts creating real rights, third persons who come into possession of the object of
the contract are bound thereby, subject to the provisions of the Mortgage Law and Land Registration Laws.
34. A is a creditor of B. In order to escape the liability to A, B sells all his property to C. May A ask for
rescission of the contract of sale between Band C?
a. No because A is not a party to the contract.
b. No because A has no right of rescission.
c. Yes because creditors are protected in cases of contracts intended to defraud them.
d. Yes even if the right of levy and execution and accion subrogatoria are still available.

35. A contract was entered into between Y and Z. X induces Y to violate the contract. May Z file an action
for damages against X?
a. No because A is not a party to the contract.
b. No because it will be violative of relativity of contract.
c. Yes even if X has no knowledge of the contract between Y and Z.
d. Yes because any third person who induces another to violate his contract shall be liable for damages to
the other contracting party.

36. A borrowed Pl0,000 from Band entered into a contract of real estate mortgage involving his car. A is
also indebted to C in the amount of Pl00,000 but the latter cannot attach the car because of the mortgage.
May C file an action for declaration of nullity of contract of real estate mortgage?
a. Yes because a void contract may be assailed by a third person directly affected by such void contract.
b. No because C is not a party to the contract.
c. No because it will be violative of relative of contract.
d. Yes but only if A and B will give consent to the suit.

37. As an exception to relativity of contract, which contracts may be assailed by a third person?
a. Voidable contract
b. Rescissible contract intended to defraud creditor and void contract that directly affected a third person
c. Unenforceable contract
d. Valid contract

38. Consensual contracts are perfected by

a. Delivery of the object of a contract.
b. Execution of formalities required by law.
c. Mere consent by contracting parties.
d. Provisions of the law.

39. Real contracts are perfected by

a. Delivery of the object of a contract.
b. Execution of formalities required by law.
c. Mere consent by contracting parties.
d. Provisions of the law.

40. Real contracts, such as contracts of deposit, of pledge, of loan or muttum and of commodatum are
perfected by
a. Delivery of the object of a contract.
b. Execution of formalities required by law.
c. Mere consent by contracting parties.
d. Provisions of the law.

41. It refers to a meeting of minds between two persons whereby one binds himself, with respect to the
other, to give something or to render some service. It is one of the five sources of civil obligation.
a. Obligation
b. Contract
c. Right
d. Civil action
42. Which of the following characteristics of contracts pertains to relativity of contract?
a. It means that the contractual provisions constitute the law between the parties. Obligations arising from
contracts have the force of law between the contracting parties and should be complied with in good faith.
b. It means that the validity and performance of contract cannot be left to the will of only one of the parties
but must be mutually decided by all contracting parties.
c. It means that the contract is binding only upon the contracting parties and their successors such as heirs
or assignees and third persons are not generally allowed to assail a contract.
d. It means that the parties may establish such stipulations, clauses, terms, and conditions as they may
deem convenient provided they are not contrary to law, morals, good customs, public order or public policy.

43. Which of the following characteristics of contracts pertains to autonomy of contract?

a. It means that the parties may establish such stipulations, clauses, ter ms, and conditions as they may
deem convenient provided they are not contrary to law, morals, good customs, public order or public policy.
b. It means that contracts are generally perfected by mere consent except in case real contracts that require
delivery of subject matter and formal or solemn contracts which require execution of formality required by
law.
c. It means that contracts should not be contrary to law.
d. It means that contracts should not contain doubt or ambiguity to avoid confusion and misunderstanding
in the performance of contract.

44. Which of the following types of elements of contract pertain to essential elements of contracts?
a. They refer to those which are required in order for a contract to exist such as consent of the contracting
parties, object certain which is the subject matter of the contract and cause of the obligation which must be
established. These elements may not be waived by the parties.
b. They refer to those that exist in certain contract unless set aside or suppressed by the parties such as
warranty against eviction and warranty against hidden defects in a contract of sale. These elements may
be waived by parties as long as the waiver is made in good faith.
c. They refer to those that do not normally exist in a contract unless stipulated by the parties such as terms
of payment, interest rate or place of payment.

45. Which of the following statements best describes a real contract?

a. It is a contract perfected by mere consent such as contract of lease and contract of sale.
b. It is a contract perfected by the delivery of the object of the contract such as contracts of deposit, of
pledge, of loan and of commodatum.
c. It is a contract which must be in the form provided by law for their perfection such as contract of donation
involving immovable property, together with the acceptance by the donee, must be in a public instrument
to be valid.

46. Which of the following statements best describes an onerous contract?

a. It is a contract whereby there is an exchange of valuable consideration such as contracts of sale and
barter. For each contracting party, the cause is the prestation or the promise of a thing or service by the
other.
b. It is a contract whereby one party receives no equivalent consideration such as contracts of donation
and commodatum. These contracts are referred to as contracts of pure beneficence, the cause of which is
the liberality of the benefactor.
c. It is a contract whereby the cause here is the service or benefit remunerated.
d. It is a contract wherein there is no cause or consideration.

47. Which of the following statements best describes principal contract?

a. It is a contract whose existence depends upon another contract. The examples are contracts of pledge,
of chattel mortgage, antichresis, guarantee or real estate mortgage which is dependent upon the principal
contract of loan.
b. It is a contract which serves as a means by which other contracts may be entered into such as
contracts of agency and partnership.
c. It is a contract that can stand by itself such as contracts of sale and loan.
d. It is a contract which has a name under the Civil Code or special law such as contracts of sale, loan
and barter.
e. It is a contract without any name under the Civil Code or special law.

48. Which of the following statements best describes aleatory contract?

a. It is a contract whereby the parties give equivalent values such as contracts of sale and barter hence,
there is real fulfillment.
b. It is a contract whose fulfillment depends upon chance such as insurance contract.
c. It is a contract where only one of the parties is obligated to give or to do something such as contracts of
commodatum and gratuitous deposit.
d. It is a contract where both parties are required to give or to do something such as contracts of sale and
barter.
e. It is a contract whereby the object of the other party is also the cause of the other party and vice versa
such as contracts of sale and barter.

49. Which of the following contracts best describes auto-contract?

a. It is a contract which has been performed.
b. It is a contract wherein one person contracts with himself.
c. It is a contract wherein one party has already prepared form of a contract, containing the stipulations he
desires, and he simply asks the other party to agree to them if he wants to enter into the contract.
d. It is a contract that has not yet been performed.

50. The following are the innominate contracts, except

a. Do ut des (I give that you may give.)
b. Do ut facias (I give that you may do.)
c. Facio ut des (I do that you may give.)
d. Facio ut facias (I do that you may do.)
e. Facias ut des (I do not do that you may not do.)