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estion 1

Tender of payment shall be made by depositing the things due at the disposal of
judicial authority
Response: False
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Question 2
When the defect of the contract consists in the incapacity of one of the parties, the
incapacitated person is not obliged to make any restitution except insofar as he has
been benefited by the thing or price received by him.
Response: True
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Question 3
The renunciation of the principal debt shall not extinguish the accessory obligations.
Response: False
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Question 4
Every person obliged to give something is also obliged to take care of it with the
proper diligence of a good father of a family, unless the law or the stipulation of the
parties requires another standard of care.
Response: True
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Question 5
Ratification does not extinguish the action to annul a voidable contract.
Response: False
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Question 6
Diana obtained a loan from Carla in the amount of P 50,000. Unable to give cash on
due date in payment of her loan obligation, Diana proposed to Carla that Diana
would be giving instead her diamond ring to settle her debt. Carla agreed and
accepted the ring from Diana. The new agreement between Diana and Carla
involved both:
Response: novation and dacion en pago
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Question 7
Condonation or remission is essentially gratuitous, which does not require the
acceptance by the obligor.
Response: False
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Question 8
The payment of debts in money shall be made in the currency stipulated, and if it is
not possible to deliver such currency, then in the currency which is legal tender in
the Philippines.
Response: True
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Question 9
_____ takes place when a third person of his own initiative and without knowledge or
against the will of the original debtor assumes the latter's obligation with the
consent of the creditor.
Response: novation / reimbursement
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Question 10
The passage of time as a mode of acquiring or losing a right including the
extinguishment of an obligation is called:
Response: prescription
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Question 11
Reformation of instruments is allowed in wills of a deceased person to indicate the
real intention of the testator.
Response: True / false
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Question 12
Debtor obtained from ABC Bank a loan of P 12 Million payable at the end of 10
years. Before maturity, an extraordinary inflation supervened causing the value of
the debt to fall to P 4 Million on the date of maturity. On due date, Debtor must pay
ABC Bank:
Response: Php 36 Million/12 million

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Question 13
Daryl bought a plane ticket for Hong Kong from Fly Travel Company. Later, however,
Daryl cancelled his flight because of the SARS epidemic in the place. Upon being
informed of the cancellation, Fly Travel told Daryl that the latter could not get his
refund of plane ticket within 2 days. In the meantime, Daryl thought of going to
Australia so he called Fly Travel to send him a ticket at Brisbane promising to pay
the cost of the tickets in 2 days. Assuming that the refund due to Daryl for his
unused plane ticket Hong Kong is of the same amount as the cost of his plane ticket
to Australia, Daryl need not pay Fly Travel by reason of:
Response: compensation
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Question 14
A threat to enforce one's claim through competent authority, even if the claim is
just or legal, will vitiate consent.
Response: False
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Question 15
An expression made by an expert where the other party has relied on the former's
special knowledge and turned out to be false shall be treated as fraud that will
vitiate consent.
Response: False
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Question 16
Whenever the private document in which the debt appears is found in the
possession of the debtor, it shall be presumed that the creditor delivered it under
force or intimidation.
Response: False
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Question 17
Payments made in a state of insolvency for obligations to whose fulfillment the
debtor could not be compelled at the time they were effected, are unenforceable
contracts.
Response: False
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Question 18
When the obligee accepts the performance, knowing its incompleteness or
irregularity, and without expressing any protest or objection, the obligation shall
remain not fully complied with.
Response: False
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Question 19
In obligations with a penal clause, the penalty shall substitute the indemnity for
damages and the payment of interests in case of noncompliance, if there is no
stipulation to the contrary.
Response: True
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Question 20
Maya made a non-negotiable promissory note with Pia as payee. Pia assigned the
note to Albert; Albert assigned the note to Bea; Bea assigned the note to Carlo;
Carlo assigned the note to Hubert; and Hubert assigned it back to Maya.
Response: Maya's obligation is extinguished by compensation.
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Question 21
Alex sold his condominium unit to Brian. Alex thought that Brian, a licensed
architect, was a chemist who shares with Alex's interest. The mistake here is
material to avoid the contract.
Response: False
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Question 22
Alex, Brian and Carl are solidary debtors of Xavier, Yuan and Zian, solidary creditors,
in the amount of P 2,700. Xavier renounces the whole obligation without the
consent of Yuan and Zian. The debtors accepted the renunciation.
Response: the whole obligation is extinguished
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Question 23
Those suffering from civil interdiction, lepers, prodigals, deaf-mute who cannot read
and write are considered _____.
Response: incapacitated

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Question 24
_____ arises from an ignorance of some provision of law, or from an erroneous
interpretation of its meaning, or from an erroneous conclusion as to the legal effect
of an agreement, on the part of one of the parties.
Response: mistake
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Question 25
Those contracts that do not comply with the Statute of Frauds are considered:
Response: unenforceable contracts
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Question 26
In onerous contracts the cause is understood to be, for each contracting party, the
prestation or promise of a thing or service by the other; in remuneratory ones, the
service or benefit which is remunerated; and in contracts of pure beneficence, the
mere liberality of the benefactor.
Response: True
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Question 27
A contract where both parties are incapable of giving consent to a contract is
considered a:
Response: unenforceable contract.
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Question 28
Proof of actual damages suffered by the creditor is necessary in order that the
penalty may be demanded.
Response: False
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Question 29
Ratification may be effected by the guardian of the incapacitated person.
Response: True
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Question 30
In extinguishing an obligation,payment shall only mean the delivery of money to the
creditor.
Response: False
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Question 31
Whoever acquires in bad faith the things alienated in fraud of creditors, shall
indemnify the latter for damages suffered by them on account of the alienation,
whenever, due to any cause, it should be impossible for him to return them.
Response: True
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Question 32
If mistake, fraud, inequitable conduct, or accident has prevented a meeting of the
minds of the parties, the proper remedy is reformation of the instrument.
Response: False
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Question 33
Waiver of an action for future fraud is valid and legally binding to contracting
parties.
Response: False
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Question 34
An _____ contract is one entered into in the name of another by one who has no
authority, is unenforceable against the former unless ratified.
Response: unenforceable
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Question 35
Daniel borrowed from Chino P 500,000. The obligation is secured by a chattel
mortgage on Daniel's Toyota car. Subsequently, Daniel paid to Chino P200,000.
Unknown to Daniel, Tito, s third person, pays Chino P 500,000 believing that Daniel
still owed Chino such amount.
Response: Tito can recover P 300,000 from Daniel. If Daniel cannot pay, Tito cannot
foreclose the mortgage on Daniel's Toyota car.

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Question 36
Rudolf borrowed P1 million from Rodrigo and Fernando who acted as
solidary creditors. When the loan matured, Rodrigo wrote a letter to Rudolf,
demanding payment of the loan directly to him. Before Rudolf could comply,
Fernando went to see him personally to collect and he paid him. Did Rudolf
make a valid payment?
Response: No, since Rodrigo, the other solidary creditor, already made a prior
demand for payment from Rudolf.
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Question 37
He who has various debts of the same kind in favor of one and the same creditor,
may declare at the time of making the payment, to which of them the same must
be applied. Unless the parties so stipulate, or when the application of payment is
made by the party for whose benefit the term has been constituted, application
shall not be made as to debts which are not yet due.
Response: True
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Question 38
Pre-nuptial agreement signed between future husband and wife is excluded from
the requirements of Statute of Frauds.
Response: False
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Question 39
A third person who has an interest in the fulfillment of the obligation, such as a
guarantor, may compel the creditor to accept payment.
Response: False / true
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Question 40
In obligations with a penal clause, the creditor as a rule may recover from the
debtor in case of breach of the following:
Response: only the penalty
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Question 41
An obligation which consists in the delivery of a determinate thing shall be
extinguished if it should be lost or destroyed even with the fault of the debtor.
Response: False
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Question 42
A mode of extinguishing obligations up to their concurrent amount when two
persons are principal debtors and creditors of each other is called:
Response: compensation
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Question 43
_____ takes place when the creditor accepts a third person to take place of the
debtor at the instance of the latter.
Response: novation/delegation
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Question 44
In an obligation to deliver a generic thing, the loss or destruction of anything of the
same kind does not extinguish the obligation.
Response: True
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Question 45
A _____ obligation is one where only one prestation is due but the debtor may
substitute another.
Response: facultative
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Question 46
The object of every contract must be determinate as to its kind. The fact that the
quantity is not determinate shall not be an obstacle to the existence of the contract,
provided it is possible to determine the same, without the need of a new contract
between the parties.
Response: True
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Question 47

Ace ordered 6 units of "Borden" typewriters from Central at the price of P 8,000 per
unit. However, Central delivered to Ace 6 units of "Remington" typewriters, a
superior brand, which was priced at P 8,500 per unit. Central informed Ace that it
will bill the latter for the "Remington" typewriters at P 8,000 only. Ace refused to
accept the "Remington" typewriters.
Response: Cetral cannot compel Ace to accept "Remington" typewriters although
they are of superior quality.
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Question 48
Rescission shall be only to the extent necessary to cover the damages caused.
Response: True
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Question 49
Impossible conditions, those contrary to good customs or public policy and those
prohibited by law shall annul the obligation which depends upon them. If the
obligation is divisible, that part thereof which is not affected by the impossible or
unlawful condition shall be valid.
Response: True
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Question 50
The receipt of the principal by the creditor without reservation with respect to the
interest, shall give rise to the
presumption that said interest has been paid.
Response: True
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Question 51
Contracts where the intention of the parties relative to the principal object of the
contract cannot be ascertained are considered:
Response: void contracts
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Question 52
If a contract entered into where one of the parties is incapable of giving consent to
a contract, the same is a:
Response: voidable contract

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Question 53
Upon the proposal of a third person, a new debtor substituted the original
debtor without the latters consent. The creditor accepted the substitution. Later,
however, the new debtor became insolvent and defaulted in his obligation. What
is the effect of the new debtors default upon the original debtor?
Response: The original debtor is freed of liability since novation took place and this
relieved him of his obligation.
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Question 54
The power to rescind obligations is implied in reciprocal ones, in case one of the
obligors should not comply with what is incumbent upon him.
Response: True
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Question 55
For dacion en pago to apply, the debtor must be insolvent.
Response: False

David owes Chad P 20,000 due on March 25. Chad, on the other hand, owes David the
following debts: P 8,000 due on March 1, P 3,000 due on March 8, P 5,000 due on
March 14, and P 2,000 due on March 24. On March 18, Chad assigned his credit right
to Tito without informing David who learned of the assignment on March 20. On March
25, Tito may collect from David:
Select one:
P 2,000
none, because the assignment made by Chad was without the knowledge of David.

P 4,000
P 20,000
he following statements pertain to either payment by cession or dacion en pago.
I. The debtor is insolvent.
II. Ownership of the thing/s is transferred to the creditor/s.
III. Plurality of creditors required.
IV. Obligations are totally extinguished as a rule.
Select one:
Statements II and IV pertain to dacion en pago.
No appropriate correct answer.
Statements I and III pertain to dacion en pago.
Statements I and IV pertain to payment by cession.
Statements III and IV pertain to payment by cession.

Contracts undertaken in fraud of creditors when the latter cannot in any other manner collect the
claims due them are considered: rescissible
Lizardo is a lesse of Oscar's condominium. Under the lease agreement, Lizardo must
pay the monthly rental of P 20,000 to Oscar at the latter's office within the first 5
days of the month. On the sixth month of the lease, Lizardo went to Oscar's office to
pay the rental but he was told by Elbert, an employee of Oscar, that Oscar was
confined at the DLSU Hospital. Elbert told Lizardo that he could entrust the payment
to him. Santy, son of Oscar, who happened to be around,however, demanded that
Lizardo must pay to him claiming that as Oscar's son, he was the one authorized to
receive the payment. Given the situation, where do you not know to whom you will
give your payment, which of the following modes of payment you will avail if you
were Lizardo? Application of payment
Whoever pays on behalf of the debtor without the knowledge or against the will of the latter, may
compel the creditor to subrogate him in his rights, such as those arising from a mortgage,
guaranty, or penalty: False

Ratification does not extinguish the action to annul a voidable contract. False
Dino obtained a loan of P 50,000 from Carlo who is engaged in the business of financing. The
written contract of the parties provided that the loan shall bear 12% interest per annum and shall
be paid in full together with the interest at the end of 12 months at Carlo's business office. On
due date, Dino proceeded to Carlo's business office to pay his debt but the place was padlocked
and showed no signs that it had been occupied for some time. Dino is now at loss on what to do
as Carlo did not forward his present address to him. Dino does not want to have any outstanding
obligation at the end of the year and incur further interest. Which course of action will you
recommend to Dino? Consignation]
The obligation having been extinguished by the loss of the thing, the creditor shall have all the
rights of action which the debtor may have against third persons by reason of the loss: false

Contracts which refer to things under litigation if they have been entered into by the
defendant without the knowledge and approval of the litigants or of competent judicial
authority are considered: resccible

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