POLYTECHNIC UNIVERSITY OF THE PHILIPPPINES COLLEGE OF ACCOUNTANCY LAW 3023 (SALES, AGENCY AND BAILMENTS) MULTIPLE CHOICE 1.

By the contract of sale one of the contracting parties obligates himself to transfer the ownership and to deliver ______, and the other to pay therefore a price certain in money or its equivalent. a. Things b. rights c. Services d. Only (a) and (b) 2. A. The seller of goods is an unpaid seller when a negotiable instrument like a check has been received as payment. B. The unpaid seller of goods has a lien on the goods or right to retain them for the price over goods in transit. a. Only A is true b. Only B is true c. Both are true d. Both are false 3. A. As a general rule, the place of delivery is the seller's place of business if he has one, and if not his residence. B. Where the seller is authorized or required to send the goods to the buyer, delivery of the goods to a carrier for the purpose of transmission is deemed to be a delivery to the buyer. a. Only A is true b. Only B is true c. Both are true d. Both are false 4. The vendor must have a right to transfer the ownership thereof at the time of ____________________. a. Perfection b. Payment c. Delivery d. Signing of contract 5. A. Unless otherwise agreed, the goods remain at the seller's risk until the ownership therein is transferred to the buyer. B. Where goods in a merchants store are sold by a person who is not the owner thereof, and who does not sell them under authority or with the consent of the owner, the buyer acquires good title. a. Only A is true b. Only B is true c. Both are true d. Both are false 6. A. The efficacy of the sale of vain hope or expectancy is deemed subject to the condition that the thing will exist. B. Things having a potential existence may be the object of the contract of sale. a. Only A is true b. Only B is true c. Both are true d. Both are false 7. A contract for the delivery at a certain price of an article which the vendor in the ordinary course of his business manufactures or procures for the general market, whether the same is on hand at the time or not, is a contract a. For a piece of work b. Of sale c. To Sell d. Barter

2 8. If the price is simulated, the contract of sale is a. Voidable b. Void b. Rescissible c. Unenforceable 9. A. Goods are still in transit even when the buyer, or his agent in that behalf, obtains delivery of the goods before their arrival at the appointed destination. B. The seller warrants that that the buyer shall have and enjoy the legal and peaceful possession of the thing. a. Only A is true b. Only B is true c. Both are true d. Both are false 10. A contract of sale is ________________ at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. a. Consumated b. Delivered c. Paid d. None of the given answer 11. As a rule, from this moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts. a. Payment d. Delivery c. Perfection e. None of the given answer 12. A. The parties cannot agree that ownership in the thing shall not pass to the buyer until he has fully paid the price. B. The contract of sale is a mode of acquiring ownership. a. Only A is true b. Only B is true c. Both are true d. Both are false 13. A. A promise to buy and sell a determinate thing for a price certain is not reciprocally demandable. B. Generally, an accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding on the promissor. a. Only A is true b. Only B is true c. Both are true d. Both are false 14. It is a transaction where the delivery transfers ownership a. Contract To Sell b. Contract of Sale c. Sale on Trial or Approval d. All of the above 15. A. Only a determinate thing can be sold. B. A cellphone is a generic thing, therefore, it cannot be sold. a. Only A is true b. Only B is true c. Both are true d. Both are false 16. A. Services are also the proper objects of a sales contract. B. Genus is one which is physically segregated from all other of the same class. a. Only A is true b. Only B is true c. Both are true d. Both are false 17. A. Mr. Sellers offered to sell his car and Mr. Bayers agreed to buy the same for Php.500,000.00. The latter promised to pay one

3 week thereafter. Subsequently, however, the seller sold and delivered it to another buyer who bought the same car. A. The first contract of sale was already perfected. B. Mr. Sellers can still sell it to another since anyway the contract of sale is not in writing and it is unenforceable. C. The contract of sale is void because there is no payment made yet. D. Letters (a) and (b) are correct. 18. A. Future inheritance may be not sold. B. A sale is perfected at the moment there is meeting of the offer and the acceptance upon the object and the price. a. Only A is true b. Only B is true c. Both are true d. Both are false 19. Jayjay offered to sell his house for Php. 5 Million and Cito accepted the same. The latter gave the sum of Php.100,000.00 and both agreed verbally that the vendee would complete the payment within one (1) month. A. It considered an option money for the option period. B. Such payment is deemed earnest money. C. The contract of sale is perfected. D. (b) and (c) are correct. 20. In a contract of sale of chattels where the price is payable in installments, the unpaid seller may exercise to: A. Exact fulfillment if the buyer fails to pay; B. Cancel the sale if the vendee did not pay one installment; C. Foreclose the chattel mortgage on the thing sold should the buyers failed to pay even a single installment. D. None of the given answers. 21. There is delivery to the buyer when A. The thing is placed in his possession B. Full payment is received by the seller C. There is symbolic tradition D. The sale is perfected by consent since it is consensual 22. The delivery of a key to a house is equivalent to A. Actual delivery B. Constructive tradition C. Traditio longa manu D. Constitutum possessorium 23. A. In the sale of immovable properties like parcel of lands there is no need to deliver the thing to transfer ownership. B. The sale involving rights is called an assignment. a. Only A is true b. Only B is true c. Both are true d. Both are false 24. When goods are delivered to the buyer "on sale or return" to give the buyer an option to return the goods instead of paying the price, the risk of loss is on a. Seller b. Buyer

4 c. Both of them d. None of the given answer

25. Comparably, when goods are delivered to the buyer on approval or on trial or on satisfaction, the risk of loss is borne by a. Seller b. Buyer c. Both of them d. None of the given answer 26. When the right of ownership is thus reserved by the seller despite the delivery of the goods to the buyer, it is referred to as a. Security title b. Possessory lien c. Mortgage d. Transaction on sale or return 27. Sky, who is barely 16 years of age, sold her cellphone to Ade, who is over 21years of age, for Php. 20 thousand, the contract of sale is: a. Void b. Rescissible c. Unenforceable d. Valid yet voidable 28. In the above-case, if Ade would later sell the phone to a third person (Gabbi), the buyer would acquire a good title to the thing. A. The second sale is void. B. It is correct if Gabbi pays for value and in good faith. C. Gabbi cannot acquire a better right than the seller has over the phone because the first sale is rescissible. D. None of the given answers. 29. Dings digital camera was borrowed by Eyer. The latter offered to buy it after using it, and the former consented. The buyer acquires ownership thru this mode of delivery a. Traditio longa manu b. Traditio brevi manu c. Symbolica tradition d. Real delivery 30. A. The vendee is bound to pay for the thing sold, even if the vendor has not yet delivered, because it is a reciprocal contract. B. When full payment has been made thru check payments, the seller is no longer an unpaid seller. a. Only A is true b. Only B is true c. Both are true d. Both are false 31. A. A contract of barter is only an accessory contract. B. The husband and the wife cannot sell property to each other. a. Only A is true b. Only B is true c. Both are true d. Both are false 32. A rice miller agreed to deliver 2,000 sacks of sugar from Bulacan to Manila. of the goods have been loaded to the carrier and was bound to its destination along Bulacan. If the buyer becomes insolvent, the unpaid seller may A. Exercise a right of retention over the goods delivered B. Rescind the transfer of title and resume the ownership in the goods. C. Exercise his right of stopping them in transitu D. All of the above

5 33. With respect to the remaining goods in Bulacan, even if ownership has been transferred to the buyer, upon insolvency of the latter, the unpaid seller may A. Exercise his possessory lien over them B. Exercise his right of stoppage C. Demand payment for its price D. All of the above 34. If a thing should have been sold to different buyers, the ownership shall be transferred to the one who may have first taken possession thereof in good faith, if it should be not one of the following a. Chattel b. Movable property c. Real property d. Personal property 35. Dorski owed Sheena Php.10,000.00. Since she cannot pay in cash, she offered to give her new ring to the latter, who accepted it, the transaction is governed by the A. General law on obligations and contracts B. Special laws C. Law on sales D. None of the above 36. The foregoing transaction is considered a a. Cession b. Dation en Pago or In Payment c. Barter d. All of them 37. A. Express warranty is a direct affirmation of fact or any promise by the seller relating to the thing or object of sale. B. Eviction takes place whenever by a final judgment based on a right prior to the sale or an act imputable to the vendor, the buyer is deprived of the thing bought. a. Only A is true b. Only B is true c. Both are true d. Both are false 38. Howell agreed to sell the cars of Owie for a certain commission or percentage based on the sale of thereof. If Howell, whether he makes a sale or not, is obliged to render payment or accounting to Owie after a term agreed upon, there is between them A. Contract of sale B. Contract of agency to sell C. Contract for a piece of work D. Barter 39. Franc placed an order at a merchants store for a particular style of lady handbag that ran out of sale due to the volume of purchases during the holidays. If he acquires them upon their availability, it is considered a A. Contract for a piece of work B. Contract of sale C. Contract of agency to sell D. None of the above

6 40. Where the buyer makes known to the seller the particular purpose for which the goods are acquired, and it appears that the buyer relies on the seller's skill or judgment, there is an implied warranty of A. Fitness B. Merchantable quality C. All of them D. None of them 41. A. The seller is responsible to the buyer for any hidden faults or defects in the thing sold, even though he was not aware of it. B. The vendor is bound to transfer the ownership of and deliver but not to warrant the thing. a. Only A is true b. Only B is true c. Both are true d. Both are false 42. A. Acceptance of the goods by the buyer shall discharge the seller from liability in damages for breach of any warranty. B. The sale of animals suffering from contagious diseases is void. a. Only A is true b. Only B is true c. Both are true d. Both are false 43. The thing sold shall be understood as delivered to the buyer, when it is placed in his A. Control only B. Possession C. Both (a) and (b) D. When the contract is perfected 44. The placing of the titles of ownership in the possession of the buyer or the use by him of incorporeal rights, with the vendor's consent, the same shall be understood as A. Delivery B. Transfer of possession and control C. Assignment D. All of them 45. Where the purchase price cannot be determined in accordance with law, or in any other manner, the sale is A. Inefficacious B. Valid so that the buyer must pay a reasonable price C. Voidable because of mistaken consent D. None of the above 46. A. Sales must always be made in writing to comply with the Statute of Fraud, or else the contract is voidable. B. If at the time the contract of sale is perfected, the thing has been entirely lost, the contract shall be without any effect. a. Only A is true b. Only B is true c. Both are true d. Both are false 47. A. When goods are delivered to the buyer on approval or on trial or on satisfaction, the ownership therein passes to the buyer when he signifies his approval or acceptance to the seller.

7 B. The seller may, by the contract of specific goods, reserve the right of possession or ownership in the goods until certain conditions have been fulfilled. a. Only A is true b. Only B is true c. Both are true d. Both are false 48. A. Option money is considered part of the purchase price. B. The gross inadequacy of price does not invalidate a sale. a. Only A is true b. Only B is true c. Both are true d. Both are false 49. If a titled parcel of land has been sold to different vendees, the ownership shall be transferred to this person a. First possessor in good faith b. Only the first registrant c. Any registrant in good faith d. None of them 50. A. The sole owner of a thing may sell an undivided interest therein. B. Things of potential existence merely cannot be the proper object of a contract of sale. a. Only A is true b. Only B is true c. Both are true d. Both are false Suggested Answers 1. D 2. A 3. C 4. C 5. C 6. B 7. B 8. B 9. B 10. D 11. C 12. D 13. D 14. B 15. D 16. D 17. D 18. C 19. D 20. A 21. C 22. B 23. B 24. B 25. A 26. A 27. D 28. B 29. B

8 30. D 31. B 32. A 33. A 34. C 35. C 36. B 37. C 38. A 39. A 40. A 41. A 42. B 43. C 44. D 45. A 46. B 47. C 48. B 49. D 50. A