OBLIGATIONS

F 1. Consent is an essential requisite of obligation.

F 2. A thing is indeterminate if it is not physically segregated from all others of the same class.

F 3. In obligations with a term, the obligation arises upon the arrival of the period.

F 4. In obligations with a penal clause, the debtor may exempt himself from the performance of
the obligation by paying the penalty.

F 5. The insolvency of one debtor will increase the liability of his co-debtors.

F 6. The indivisibility of an obligation necessarily gives rise to solidarity.

F 7. Whenever a period is designated in an obligation, it is for the benefit of both the creditor and
debtor.

F 8. When the fulfillment of the obligation is dependent upon the sole will of the debtor, the
conditional obligation shall be void.

F 9. In facultative obligation, the right of choice belongs to the debtor unless it has been expressly
granted to the creditor.

EXTINGUISHMENT OF OBLIGATIONS

FALSE 1. Consignation, to be valid, generally requires a prior tender of payment

TRUE 2. Consignation of the amount required is not necessary to preserve the right to redeem.
TRUE 3. Difficulty of service authorizes release of obligor but does not authorize courts to
modify or revise the contract between the parties.
FALSE 4. It is a concept that derives from the principle that since mutual agreement can create a
contract, mutual disagreement can cause its extinguishment.
TRUE 5. Where an application for a loan of money was approved, there arises a perfected
contract even before the delivery of the object of the contract.
FALSE 6. If the obligation has been substantially performed, the obligor shall recover as though
there had been a strict and complete fulfilment.
7. (less damages suffered by the obligee)
FALSE 8. When the obligee accepts the performance knowing its incompleteness or irregularity,
the obligation is deemed fully complied with. (without expressing any protest or
objection)
FALSE 9. Payment by a judgment debtor to the wrong party does not extinguish judgment debt.
FALSE 10. Obligations requiring payment in foreign currency must be discharged in Philippine
currency as provided by RA 8183.
(RA 529)
TRUE 11. An agreement to pay a promissory note in dollars, while null and void under RA 529
does not defeat a creditor’s claim.
CERTIFICATION 12. A ____________ implies that the check is drawn upon sufficient funds in the ….
TRUE 13. The fact that the debtor had sufficient available funds….
TRUE 14. Consignation presupposes not only that the obligor is able, ready, and willing to pay
but more so in the act of performing his obligation.
15. “A proof that an act could have been done is no proof that it was actually done”
supports the concept known as tender of payment.
TRUE 16. A certified personal check is not the legal tender nor the currency contemplated,
therefore cannot constitute valid tender of payment.
TRUE 17. The rule that in case of extraordinary inflation or deflation of the currency stipulated
should supervene, the value of the currency at the time of the establishment of the
obligation shall be the basis of payment of obligations arising from law.
FALSE 18. Under the principle of dation in payment, what is transferred is merely the possession
of the property. (ownership)
19. There can be no dation in payment when there is no obligation extinguished.
TRUE 20. Tender of payment may be extrajudicial.
FALSE 21. Consignation is necessarily judicial.
CONTRACTS
A. Both false.
B. Both true.
C. True, false.
D. False, true.

D 1. Contracts must bind both parties, its validity or termination cannot be left to the will of one of them.

Unenforceable contracts are susceptible of ratification.

A 2. Contracts are perfected by mere consent.

Ratification requires conformity of the contracting parties.

A 3. Mistake as to the qualifications of one of the parties vitiates consent.

Contracts take effect between their parties, assigns and heirs.

A 4. A mere expression of an opinion does not signify fraud.

Incidental fraud invalidates a contract.

C 5. In contracts of pure beneficence, the cause is the liberality of the benefactor.

The contract is void if the cause is not stated in the contract.

C 6. The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem
convenient.

Acceptance by letter or telegram binds the offeror from the time the letter or telegram is sent.

B 7. An offer made through the agent is accepted from the time acceptance is communicated to the agent.

There is violence when in order to wrest consent, serious or irresistible force is employed.

A 8. Failure to disclose facts constitutes fraud.

Real contracts, such as mutuum, pledge and guaranty are not perfected until the delivery of the object of
the obligation.

A 9. Contracts of pure beneficence are contracts without cause.

If the cause is not stated in the contract, it exists and is lawful.

C 10. A contract may be voidable eve though there may have been no damage to the contracting parties.

The action or defense for the declaration of the inexistence of a contract prescribes in 10 years.
Part Two. Multiple choice.

1. On February 11, 2003, Perfecto offered to sell his house and lot to Reynaldo for P1,500,000.00. Perfecto
told Reynaldo that he was giving Reynaldo up to February 28, 2003 to decide whether or not to buy the
house and lot. Reynaldo accepted the option but did not give anything to Perfecto to support the option
given to him. On May 20, 2003, Perfecto found another buyer who was ready to buy the house and lot
for P2,000,000.00. Perfecto wants to ask you whether he can still withdraw the offer he made to
Reynaldo. Decide.
a. Yes, Perfecto may withdraw the offer because he stands to gain an added profit of P500,000.00
and this will be more than enough to pay damages to Reynaldo.
b. Yes, Perfecto may withdraw the offer by just informing Reynaldo of such fact.
c. No, Perfecto may not withdraw the offer because the option was accepted by Reynaldo although
Reynaldo did not give anything in support thereof.
d. No, Perfecto may not withdraw his offer until the lapse of the period given to Reynaldo to
exercise his option.
2. Elements that accompany certain contracts unless set aside or suppressed by the parties, are known as:
a. Natural elements c. Accidental elements
b. Essential elements d. Original elements

3. A contract where both parties are required to render reciprocal prestations, are known as:
a. Bilateral contract c. Gratuitous contract
b. Unilateral contract d. Commutative contract

4. Contracts take effect only between the contracting parties, their assigns and heirs except in cases where
obligations and rights arising from the contracts are not transmissible by their nature, or by stipulation or
by provision of law. This principle is known as:
a. Relativity of contracts c. Obligatory force of contracts
b. Mutuality of contracts d. Liberty of contracts

5. Obligations arising from contracts have the force of law between … C (sorry incomplete)

6. One of the following is not a real contract:

a. pledge c. lease
b. commodatum d. mutuum

7. On May 1, 2002, S offered to sell a specific car to B for P500,000.00. B sent his letter of acceptance to S
on May 8, 2002. On May 10, 2002, however, S died in a vehicular accident and his secretary received
the letter or acceptance on May 12, 2002 unaware that S had already died.
a. The contract was perfected on May 8, 2002 when B sent his letter of acceptance.
b. The contract was perfected on May 12, 2002 when the secretary of S received the letter.
c. The contract was not perfected because the offer of S became ineffective when he died.
d. The contract was perfected on May 1, 2002 because the acceptance made by B on May 8, 2002
retroacts to the date of the offer.

8. Mistake in three of the following will make a contract voidable. Which one will not?
a. Mistake as to the substance of the thing which is the object of the contract
b. Mistake as to the principal conditions which principally moved one or both parties to enter into
the contract.
c. Mistake as to the identity or qualifications of one of the parties, where identity or qualifications
have been the principal cause of the contract.
d. Simple mistake of account.

9. It is the employment of serious or irresistible force to obtain consent.

a. Intimidation c. Violence
b. Threat d. Moral coercion

10. It is present when one of the contracting parties is compelled by a reasonable and well-grounded fear
of an imminent and grave evil upon his person or property or upon the person or property of his
spouse, descendants, and ascendants to obtain consent:
a. Violence c. Intimidation
b. Physical coercion d. Mistake
MIDTERMS
True or False.

F 1. Acts and contracts which have for their objects the creation transmission, modification or
extinguishment of real rights over immovable property must be in a public instrument to be
valid and binding. (not for validity but for greater efficacy)

F 2. In consignation, before acceptance by the creditor, the withdrawal of the sum or thing
consigned by the debtor will be a matter of right. (if made after judicial consignation)

F 3. Contract of lease for 2 years is unenforceable if not in writing. (only if lease of real property)

T 4. Tender of payment is required only when the creditor refuses, without just causes, to accept
payment.

F 5. An action for rescission of a contract entered into to defraud a creditor will prosper 4 years from
actual discovery of fraud. (from time of registration)

T 6. Undue influence shall annul the obligation, although it may have been employed by a third
person who did not take part in the contract.

F 7. In obligation to deliver a determinate thing, the loss of the thing while in the possession of the
debtor shall be presumed to be due to his fault. (loss on occasion of calamity…)

T 8. Rescission shall be only to the extent necessary to cover the damage caused by a contract in
fraud of a creditor.

F 9. A conveyance is presumed to be in fraud of creditor if made by a debtor after a suit is file

against him while it is pending. (conveyance must be onerous title)

F 10. A contract which is void on its face cannot be the subject of reformation. (the only the subject
of reformation is the real intention of the parties)

F 11. Once a contract is perfected, though the same is not in the form required by law, the contracting
parties may compel each other to observe that form.

F 12. Lesion or inadequacy of cause shall not invalidate a contract, unless there has been fraud,
mistake or undue influence.

T 13. The cause in a lucrative contract is the liberality of the benefactor.

T 14. An offer may become ineffective upon insolvency of either party before acceptance is conveyed
even if the insolvency is not judicially declared.

F 15. A contract of sale entered into between spouses is void.

T 16. A creditor to whom partial payment has been made may exercise his right for the remainder and
he shall be preferred to the person who has been subrogated in his place in virtue of partial
payment of credit.

F 17. If novation of the new obligation is void, the original one shall subsist.

F 18. In obligation which is subject to suspensive condition or term, the happening of the condition or
event will give rise to the obligation

F 19. Conditional obligation where the condition is both suspensive and potestative is void.

F 20. Those obliged to deliver or to do something incur in delay only from the time the obligee
judicially or extrajudicially demands from them the fulfilment of the obligation.

F 21. No person shall be responsible for those events which could not be foreseen or which though
foreseen were inevitable unless there is an express stipulation to the contrary.
T 22. The indivisibility of an obligation does not necessarily give rise to solidarity.

F 23. A creditor cannot be compelled partially to receive the prestations in which the obligation
consists.

T 24. Proof of actual damages suffered by the creditor is not necessary in order that penalty may be
demanded.

F 25. A person alternatively bound by different prestations shall completely perform all of them.

F 26. Any waiver of an action for fraud is void.

F 27. When the fulfillment of the condition depends upon the sole will of the debtor, the conditional
obligation shall be void.

F 28. In facultative obligation, the right of choice belongs to the debtor unless it has been expressly
granted to the creditor.

F 29. Impossible conditions, those which are contrary to good customs or public policy and those
prohibited by law are deemed not agreed upon.
PARTNERSHIP AND AGENCY

TRUE 1. Agency may be oral.

FALSE 2. Notice of revocation in a newspaper of general circulation is sufficient warning to

third persons of the revocation of agency.

TRUE 3. The principal may revoke agency at will and compel the agent to return the documents
of agency.

TRUE 4. Two or more persons appointed for a common transaction shall be solidarily liable to
the agent for all consequences of the agency.

TRUE 5. The limits of the agent’s authority are deemed exceeded even if the act is more
advantageous to the principal.

FALSE 6. If the agent acted in his own name, the principal has no right of action against the
person with whom the agent has contracted.

FALSE 7. The principal is liable for expenses incurred by the agent.

TRUE 8. The agent may retain in pledge object of the agency until the principal effects
reimbursement and pays the agent.

FALSE 9. The agent is liable if there is a conflict of interest between his interests and those of
the principal.

FALSE 10. If the agent is empowered to lend money, he may be the borrower.

TRUE 11. Persons not partner may be liable as a partner.

FALSE 12. Receipt of profits is prima facie evidence of partnership.

TRUE 13. Partnership may be constituted in any form.

FALSE 14. Persons prohibited from giving donation or advantage cannot enter into particular
partnership.

FALSE 15. Partnership begins from the execution of the contract.

TRUE 16. Every partner I a debtor of the partnership

FALSE 17. A partner is a co-owner of the partnership property.

TRUE 18. Every partnership shall operate under a firm name.

TRUE 19. Contributions of a limited partner may be cash or property not services.

TRUE 20. A person may be a general partner and a limited partner at the same time.

FALSE 21. Sale of a piece of land thru agent—agency is void.

TRUE 22. SPA is necessary to waive any obligation gratuitously.

TRUE 23. SPA to sell includes power to mortgage.

FALSE 24. SPA to mortgage does not include power to sell.

FALSE 25. Agency shall remain in full force even after the death of the principal

FALSE 26. All acts of the agent even after the death of the principal, without his knowledge, is
valid.
CREDIT TRANSACTIONS

TRUE 1. Deposit is a real contract.

FALSE 2. Deposit is not covered by the Statute of Frauds.

FALSE 3. Deposit by a capacitated person with another who is not, the depositor shall have
action to recover while thing is in possession of the depositary.

FALSE 4. The depositary is obliged to keep the thing safely and to return it to the depositor.

FALSE 5. If deposit with a third person is allowed, the depositary shall not be liable for the loss.

TRUE 6. The surety undertakes to pay if the principal does not pay; the guarantor only binds
himself to pay if the principal cannot pay. The first is the insurer of the debt, while the
other is the insurer of the solvency.

FALSE 7. A guaranty is essentially gratuitous.

TRUE 8. Guaranty may be constituted to guarantee a voidable contract.

TRUE 9. Guaranty may be constituted to guarantee future debts...

FALSE 10. A guarantor cannot be compelled to pay the creditor unless the latter has exhausted all
the properties of the principal debtor, and…

FALSE 11. The thing deposited may not be used without the permission of te depositor.

TRUE 12. The depositary cannot demand that the depositor prove his ownership of the thing
deposited.

FALSE 13. The thing deposited must be returned upon demand.

TRUE 14. Deposit of effects by travellers in hotels or inns is a necessary deposit.

FALSE 15. Loan and deposit are essentially gratuitous.

FALSE 16. Bailor in commodatum acquires use of the thing loaned without compensation but not
its fruits.

FALSE 17. The bailee is not liable for the loss of the thing if due to a fortuitous event.

FALSE 18. A contract of deposit is a consensual contract.

FALSE 19. An escalation clause is void if there is no de-escalation clause.