EASY

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.
A. Obligation
B. Contract
C. Right
D. Civil action
ANSWER: B

The following are the characteristics of contracts, except

A. obligatory force which means that the contractual provisions constitute
the law between the parties.
B. Mutuality which means that the validity and performance cannot be left
to the will of only one of the parties.
C. Relativity which means it is binding only upon the contracting parties

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and their successors such as heirs or assignees.
D. Liberty which means that the parties may establish such stipulations,

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clauses, terms, and conditions as they may deem convenient provided they
are not contrary to law, morals, good customs, public order or public

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policy.

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E. Consensuality which means that contracts are perfected by mere consent
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except in real contracts and formal or solemn contracts which require
additional requirements.
F. Illegality which means that contracts should be contrary to law.
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ANSWER: F
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The following are the types of elements of a contract, except?

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A. Essential elements which 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
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obligation which must be established. These elements may not be waived

by the parties.
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B. Natural elements which already 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
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may be waived by parties as long as the waiver is made in good faith.

C. Accidental elements which do not normally exist in a contract unless
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stipulated by the parties such as terms of payment, interest rate or

place of payment.
D. Alien elements which refer to those items which do not exist in earth.
ANSWER: D
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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.

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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 done. Must be in a public instrument
to be valid.
D. It is a contract involving delivery of real property.
ANSWER: B

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 tge
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

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remunerated.
D. It is a contract wherein there is no cause or consideration.

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ANSWER: A

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Which of the following statements best describes principal contract?
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A. It is a contract whose existence depends upon another contract such as
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contracts of pledge, of chattel, mortgage, antichresis, guarantee or
real estate mortgage which is dependent upon a principal contract such
as loan.
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B. It is a contract that can stand by itself such as contracts of sale and

loan.
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C. It is a contract which has a name under the civil code or special law
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such as contract of sale, loan and barter.

D. It is a contract without any name under the civil code or special law.
ANSWER: C
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Which of the following statements best describes aleatory contract?

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A. It is a contract whereby the parties give equivalent values such as sale

and barter hence, there is real fulfillment.
B. It is a contract whose fulfillment depends upon chance such as insurance
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contract.
C. It is a contract where only one of the parties is obligated to give or
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to do something such as commodatum and gratuitous deposit.

D. It is a contract where both parties are required to give or to do
something such as sale and barter and it may be reciprocal or non-
reciprocal.
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ANSWER: B

Which of the following contract best describes auto-contract?

A. It is a contract which has been performed.
B. It is a contract wherein one person contracts with himself.

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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.
ANSWER: B

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.)
ANSWER: E

The following are the rules that shall govern innominate contracts, except
A. The stipulation of the parties
B. The provisions of obligations and contracts

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C. The rules governing the most analogous contracts
D. The customs of the place

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E. The provisions of corporation code
ANSWER: E

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Which of the following statements pertaining to the stages of a contract
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refers to preparation or conception stage?
A. It involves a preliminary negotiations and bargaining, discussion of
terms and conditions, with no arrival yet of a definite agreement.
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B. It is the point when there is meeting of minds between the parties on a

definite subject matter and valid cause.
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C. It is the point when the contract have been fulfilled resulting in its
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accomplishment.
ANSWER: A
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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
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may establish such stipulations, clauses, terms and conditions as they may
deem convenient , provided they are not contrary to the following, except
A. Law
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B. Religion
C. Morals
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D. Good customs
E. Public order
F. Public policy
ANSWER: B
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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

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C. Public order
D. Public policy
ANSWER: B

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
ANSWER: C

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

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C. Public order
D. Public policy

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ANSWER: B

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The contract provides that the determination of the performance is left to
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of a third person. Is the stipulation valid?
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A. No because it is contrary to law, morals, good customs, public order or
public policy.
B. No because it violates mutuality of contract.
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C. Yes because the determination of the performance of contract may be left

aC s

to a third person, whose decision shall not be binding until it has been
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made known to both contracting parties.

D. Yes because the determination of the third person is obligatory whether
or not it is evidently inequitable.
ANSWER: C
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Relativity of contract provides that contract takes effect only between the
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following, except
A. Contracting parties
B. Assigns of contracting parties
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C. Heirs of contracting parties

D. Third persons
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ANSWER: D

Obligations and rights arising from contracts are generally transmissible

to the parties’ heirs and assigns. The following are considered
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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.
ANSWER: D

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A stipulation which is considered and exception to the relativity of
contract is called
A. Stipulation pour autrui
B. Sipulation in favor of the heirs
C. Stipulations in favor of assighns
D. Stipulation in favor of contracting parties
ANSWER: A

The following statements concerning stipulation pour autrui are correct,

except:
A. A stipulation in favor of third person has no binding effect in itself
before its agreement, may modify the contract or revoke it.
B. A mere incidental interest or benefit is not within the doctrine of
stipulation pour autrui.
C. The stipulation pour autrui still exists even if the contract is
considered null and void.

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ANSWER: D

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As a general rule, contracts are perfected by
A. Delivery of the object of contract.

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B. Execution of formalities required by law.
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C. Mere consent by contracting parties.
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D. Provisions of the law.
ANSWER: C
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Real contracts, such as contracts of deposit, of pledge, of load or muttum

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and of commodatum are perfected by

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A. Delivery of the object of a contract.

B. Execution of formalities required by law.
C. Mere consent by contracting parties. Provisions of the law.
ANSWER: A
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What is the nature of contract to constitute a pledge, a deposit, a loan or

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a commodatum?
A. Real contract
B. Consensual contract
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C. Formal contract
ANSWER: B
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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
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who has no authority or legal representation, or who has acted beyond his
powers?
A. Rescissible
B. Unforceable
C. Voidable
D. Null and void

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ANSWER: B

AVERAGE

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 paid 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.
ANSWER: A

The following stipulations for common carrier shall be considered

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unreasonable, unjust and contrary to public policy, therefore null and
void, except

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A. That the goods are transported at the risk of the owner or shipper.

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B. That the common carrier need not observe any diligence in the custody of

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the goods.

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C. That the common carrier will not be liable for any loss, destruction, or
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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
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deterioration of the goods to a degree less than extraordinary diligence

if in writing and supported by a valuable consideration
aC s

ANSWER: D
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The following stipulations for common carrier shall be considered

unreasonable, unjust and contrary to public policy, there null and void,
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except
A. That the common carrier shall exercise a degree of diligence less than
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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
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that of extraordinary diligence in the transportation of passengers.

C. That the common carrier shall not be responsible for the acts or
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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.
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E. That the common carrier is not responsible for the acts of robbers who
acts with grave or irresistible threat, violence or force, is dispensed
with or diminished.
ANSWER: E

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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 a 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.
ANSWER: C

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 is
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

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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

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breach of contract by other party,
C. No because it violates the freedom to enter into contract.

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D. Yes because the right to rescind a contract cannot be waived.
ANSWER: B
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What is the remedy of the parties in case the determination of the
performance of contract of a third person is evidently inequitable?
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A. The contract should be declared null and void.

B. The contract should be rescinded.
aC s

C. The court shall decide what is equitable under the circumstances.

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D. The court shall leave the status of the contract.

ANSWER: C
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A person died leaving liabilities. Are the heirs liable for the obligation
of the decedent?
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A. No because there is no privirt 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
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between the parties, their assigns and heirs.

D. Yes but not beyond the property they received because there is privity
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between them and their predecessor.

ANSWER: D

The following are the requisites of stipulation pour autrui or stipulation

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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 and conferred
a favor upon a third person and not a mere incidental benefit or
interest.

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D. The favorable stipulation should not be conditioned or compensated by
and kind of obligation whatever.
E. The third person must have communicated his acceptance to the obligor
before its revocation.
F. One of the contracting parties bears the legal representation or
authorization of the third party.
ANSWER: F

A mortgages his land to B and 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 B and C.
C. Yes even if the mortgage contract is not registered.
D. Yes because in contracts creating real right, 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.

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ANSWER: D

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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

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B and C?
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A. No because A is not a party to the contract.
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B. No because A has no right of rescission.
C. Yes because creditors are protected in cases of contracts intended to
defraud them.
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D. Yes even if the right of levy and execution and accion subrogatoria are
still available.
aC s

ANSWER: C
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A contract was entered into between Y and Z. X induces Y to violate the

contract. Can Z file and action for damages against X?
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A. No because A is not a party to the contract.

B. No because it will be violative of relativity of contract.
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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.
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ANSWER: D
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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.
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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 consequences which,
according to their nature, may be in keeping with good faith, usage and
law.
D. The parties are not bound by what is not stipulated in the contract.

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ANSWER: C

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.
ANSWER: C

An owner of hacienda did not authorize his wife and children to sell the
said hacienda but upon being informed that they had done so, instead of
refusing to enforce of the sale, he proceeded to collect in installments
the amount of promissory not given to the purchase. Can the buyer of the
hacienda enforce the contract of sale of land?
A. No because the contract is unenforceable considering the wife and
children has no authority to sell the land.
B. No because the contract is rescissible considering that it is entered

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into defraud the creditors.
C. Yes because the contract is only voidable and therefore enforceable.

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D. Yes because the contract becomes enforceable upon the collection of the
purchase price which is considered and implied retification.

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ANSWER: D
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