HOLY CROSS OF DAVAO COLLEGE, INC.

OBLIGATION AND CONTRACT

FINAL EXAMINATION 2015

INSTRUCTIONS
This questionnaire consists of thirty-five (35) numbers contained in five (5) pages. Read
each question very carefully. Answer legibly, clearly, and concisely. Do not repeat the question.
For Part 1 encircle the letter of the correct answer. For part 2 explain or state briefly the rule or
reason for your answer, a mere "Yes" or "No" answer without any corresponding discussion will
not be given any credit.

Education is the most powerful weapon which you can use to change the world.
- Nelson Mandela
GOOD LUCK AND GOD BLESS!!!

ATTY. RAMBO F. QUICO

Instructor, Law 1
2015 Final Examination
WARNING: NOT FOR SALE OR UNAUTHORIZED USE
PART 1
(1) Can future inheritance be the subject of a contract of sale? (2 points)
(A) No, since it will put the predecessor at the risk of harm from a tempted buyer,
contrary to public policy.
(B) Yes, since the death of the decedent is certain to occur.
(C) No, since the seller owns no inheritance while his predecessor lives.
(D) Yes, but on the condition that the amount of the inheritance can only be ascertained
after the obligations of the estate have been paid.
(2) X and Y were to marry in 3 months. Meantime, to express his affection, X donated a house
and lot to Y, which donation X wrote in a letter to Y. Y wrote back, accepting the donation and
took possession of the property. Before the wedding, however, Y suddenly died of heart attack.
Can Ys heirs get the property? (2 points)
(A) No, since the marriage did not take place.
(B) Yes, since all the requisites of a donation of an immovable are present.
(C) No, since the donation and its acceptance are not in a public instrument.
(D) Yes, since X freely donated the property to Y who became its owner.
(3) When bilateral contracts are vitiated with vices of consent, they are rendered (2 points)

(A) rescissible.
(B) void.
(C) unenforceable.
(D) voidable.
(4) Contracts take effect only between the parties or their assigns and heirs, except where the
rights and obligations arising from the contract are not transmissible by their nature, by
stipulation, or by provision of law. In the latter case, the assigns or the heirs are not bound by the
contracts. This is known as the principle of (2 points)
(A) Relativity of contracts.
(B) Freedom to stipulate.
(C) Mutuality of contracts.
(D) Obligatory force of contracts.
(5) Lino entered into a contract to sell with Ramon, undertaking to convey to the latter one of the
five lots he owns, without specifying which lot it was, for the price of P1 million. Later, the
parties could not agree which of five lots he owned Lino undertook to sell to Ramon. What is the
standing of the contract? (2 points)
(A) Unenforceable.
(B) Voidable.
(C) Rescissible.
(D) Void.
(6) X, who was abroad, phoned his brother, Y, authorizing him to sell Xs parcel of land in Pasay.
X sent the title to Y by courier service. Acting for his brother, Y executed a notarized deed of
absolute sale of the land to Z after receiving payment. What is the status of the sale? (2 points)
(A) Valid, since a notarized deed of absolute sale covered the transaction and full
payment was made.
(B) Void, since X should have authorized agent Y in writing to sell the land.
(C) Valid, since Y was truly his brother Xs agent and entrusted with the title needed to
effect the sale.
(D) Valid, since the buyer could file an action to compel X to execute a deed of sale.
(7) The husband assumed sole administration of the familys mango plantation since his wife
worked abroad. Subsequently, without his wifes knowledge, the husband entered into an
antichretic transaction with a company, giving it possession and management of the plantation
with power to harvest and sell the fruits and to apply the proceeds to the payment of a loan he
got. What is the standing of the contract? (2 points)
(A) It is void in the absence of the wifes consent.
(B) It is void absent an authorization from the court.

(C) The transaction is void and can neither be ratified by the wife nor authorized by the
court.
(D) It is considered a continuing offer by the parties, perfected only upon the wifes
acceptance or the courts authorization.
(8) The presence of a vice of consent vitiates the consent of a party in a contract and this renders
the contract (2 points)
(A) Rescissible.
(B) Unenforceable.
(C) Voidable.
(D) Void.
(9) ___________ is the conformity or concurrence of wills (offer and acceptance) and with
respect to contracts, it is the agreement of the will of one contracting party with that of another or
others, upon the object and terms of the contract. (2 points)
(A) Consent
(B) Cause
(C) Object
(D) Meeting of the minds
(10) ____________ is the manifestation by the offeree of his assent to the terms of the offer. (2
points)
(A) Acceptance
(B) Offer
(C) Meeting of the minds
(D) Consent
(11) _____________ is one giving a person for a consideration a certain period within which to
accept the offer of the offerer. It is separate and distinct from the contract which will be perfected
upon the acceptance of the offer. (2 points)
(A) Option contract
(B) Option period
(C) Option money
(D) Option
(12) _____________ is that which arises from an ignorance of some provisions 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. (2 points)
(A) Mistake of law
(B) Mistake of Fact
(C) Mistake

(D) Fraud
(13) ______________ is any property or right, not in existence or capable of determination at the
time of the contract, that a person may inherit in the future, such person having only an
expectancy of a purely hereditary right. (2 points)
(A) Future inheritance
(B) Expectant right
(C) Future things
(D) Transmissible right
(14) _______________ when the thing or service in the very nature of things cannot exist or be
performed. (2 points)
(A) Physical impossibility
(B) Legal impossibility
(C) Relative impossibility
(D) Absolute impossibility
(15) _______________ is the essential or more proximate purpose which the contracting parties
have in view at the time of entering into the contract. (2 points)
(A) Cause
(B) Object
(C) Meeting of the minds
(D) Consent
(16) ______________ is the purely personal or private reason which a party has in entering into
a contract. (2 points)
(A) Motive
(B) Cause
(C) Consent
(D) Purpose
(17) ______________ refers to the manner in which a contract is executed or manifested. (2
points)
(A) Form of a contract
(B) Informal Contract
(C) Reformation of contract
(D) Interpretation of contract
(18) _____________ is that remedy allowed by law by means of which a written instrument is
amended or rectified so as to express or conform to the real agreement or intention of the parties
when by reason of mistake, fraud, inequitable conduct, or accident, the instrument fails to
express such agreement or intention. (2 points)
(A) Reformation

(B) Rescission
(C) Annulment
(D) Interpretation of contract
(19) _______________ is mistake of fact that is common to both parties of the instrument which
causes the failure of the instrument to express their true intention. (2 points)
(A) Mutual mistake
(B) Mistake of fact
(C) Mistake of law
(D) Common mistake
(20) _______________ is the determination of the meaning of the terms or words used by the
parties in their written contract. (2 points)
(A) Interpretation of contract
(B) Reformation of contract
(C) Form of contract
(D) None of the above
(21) ________________ are those validly agreed upon because all the essential elements exist
and, therefore, legally effective, but in the cases established by law, the remedy of rescission is
granted in the interest of equity. (2 points)
(A) Rescissible contract
(B) Voidable contract
(C) Unenforceable Contract
(D) Void contract
(22) _________________ are those which possess all the essential requisites of a valid contract
but one of the parties is incapable of giving consent, or consent is vitiated by mistake, violence,
intimidation, undue influence, or fraud. (2 points)
(A) Voidable contract
(B) Rescissible contract
(C) Unenforceable Contract
(D) Void contract
(23) __________________ means that one voluntarily adopts some defective or unauthorized act
or contract which, without his subsequent approval or consent, would not be binding on him. (2
points)
(A) Ratification
(B) Rectification
(C) Rescission
(D) None of the above

(24) __________________ are those that cannot be enforced in court or sued upon by reason of
certain defects provided by law until and unless they are ratified according to law. (2 points)
(A) Unenforceable Contract
(B) Voidable contract
(C) Rescissible contract
(D) Void contract
(25) ________________ are those which, because of certain defects, generally produce no effect
at all. (2 points)
(A) Void contract
(B) Voidable contract
(C) Rescissible contract
(D) Unenforceable Contract
PART 2
(26) In a contract containing an option period, when is the offerer not allowed to withdraw his
offer even before acceptance by the offeree? (5 points)
(27) S sold his house to B believing that B was C. Can S legally withdraw from the contract on
the ground of mistake? (5 points)
(28) S has several pigs. Under a contract of sale, S binds himself to deliver a pig to B for P 3,000
if the pig has a weight of at least 30 kilos. State the binding effect of the sale. (5 points)
(29) S sold his fishing boat to B who intends to use the boat for smuggling. Is the contract of sale
illegal? (5 points)
(30) S sold to B a specific parcel of land for P 500,000. B failed to pay. Has S the right to have
the sale declared void by the court on the ground of absence of cause for non-payment of the
price? (5 points)
(31) F, guardian of M (minor), sold to B a property of M with a market value of P50,000 for
only P 37,000, or a difference of more than (P 12,500) of the value. If rescission of the sale is
demanded, what possible defense under the law can B present to avoid rescission? (5 points)
(32) S, a minor, sold a property to B. Later, the sale is annulled on the ground of the minority of
S. Is S bound to return the price received by him? (5 points)
(33) D (debtor) owes C (creditor) P 10,000. T (third person) orally promised to assume the
obligation of D. Can the promise of T be proved by the testimony of a witness who was present
when T made the same? (5 points)
(34) In consideration of P 10,000 given by X to Y, the latter agreed to burn the house of Z. Later,
X told Y to forget the agreement and to return the money. Y refused. Is X entitled to recover from
Y? (5 points)
(35) W (woman) agreed to stay in the house of M (man) as the latters live-in partner for one
year in consideration of the latters promise to pay her P 100,000 after said period. W complied
with her part of the agreement but M reneged on his promise. Is W entitled to recover from M?
(5 points)

-NOTHING FOLLOWS-