Deck 6: Contractual and Partnership Issues

Question 1

Which of the following contracts is not unenforceable?

A)An oral agreement to pay for the debt, default or miscarriage of another.
B)An oral sale of land.
C)An oral sale of movables with a value of ₱500.
D)An oral agreement to lend ₱50,000.

Answer 1

An oral agreement to lend ₱50,000.

Question 2

No. 1 - A contract of sale is a mode of acquiring ownership. No. 2 - Every delivery transfers ownership.

A)Both are false.
B)Both are true.
C)No. 1 is true. No. 2 is false.
D)No. 1 is false. No. 2 is true.

Answer 2

Both are false.

Question 3

Mr. X pledged his gold watch to Mr. Y as security for a loan. The loan was not paid.

A)Mr. Y may appropriate the ring as his own if there is a stipulation to that effect.
B)Mr. Y must sell the ring to someone else even in a private sale.
C)Mr. Y may recover the deficiency from Mr. X if after the auction sale, a deficiency exists.
D)Mr. Y cannot recover the deficiency after the auction sale.

Answer 3

Mr. Y cannot recover the deficiency after the auction sale.

Question 4

The benefit of "exclusion" is available in a contract of

A)guarantee
B)suretyship
C)pledge
D)antichresis

Question 5

Mr. Seller and Mr. Buyer orally agreed on the following:
(i) the land to be sold has an area of 10,000 sq. meters
(ii) price is ₱5 million
(iii) Mr. Seller shall prepare the deed of sale.With fraudulent intent, Mr. Seller knowing the inadequacies of Mr.
Buyer with respect to numbers wrote 1,000 sq. meters instead of 10,000 sq. meters. The sale is

A)void
B)voidable but the contract may be reformed
C)valid but the instrument may be reformed
D)valid but the contract may be reformed

Question 6

Mr. X promised to deliver a specified dog named "Auger" to Mr. Y on April 29, 2005.On the due date, no dog was delivered. Which is not correct?

A)If the dog died on April 30 without anyone's fault, Mr. X shall be liable to Mr. Y by reason of delay.
B)Mr Y shall bear the loss because of res perit domino.
C)Mr. Y shall bear the loss because of genus nunquan perit.
D)Mr X shall bear the loss because of genus nunquan perit.

Question 7

No. 1 - The mortgagor in a real estate mortgage may sell the property mortgaged despite a prohibition to that EFFECT. No. 2 - If there is a balance after the foreclosure sale in a chattel mortgage arising he deficiency cannot be recovered.

A)Both are true.
B)Both are false.
C)No. 1 is false. No. 2 is true.
D)No. 1 is true. No. 2 is false.

Question 8

No. 1 - The laws governing deposits govern the relationship between a bank depositor and a bank. No. 2 - A creditor may be compelled to receive a certified check in payment of a loan.

A)Both are false.
B)Both are true.
C)No. 1 is true. No. 2 is false.
D)No. 1 is false. No. 2 is true.

Question 9

.Mr. X lost heavily in a private gambling with Mr. Y. He still owes Mr. Y ₱250,000 representing losses. Which is not true?

A)The wife of Mr. X may file a suit to recover the losses if Mr. X refuses to file the suit.
B)Mr. Y has the obligation to return the losses of Mr. X.
C)Mr. X is estopped from recovering his losses.
D)Mr. Y cannot collect the unpaid losses of Mr. X.

Question 10

Mr. X, without the authority of Mr. Y, owner of a car, sold the same car in the name of Mr. Y to Mr. Z. The contract between Mr. X and Mr. Z is

A)void because of the absence of consent from the owner, Mr. Y.
B)valid because all of the essential requisites of a contract are present.
C)unenforceable because Mr. X had no authority but he sold the car in the name of Mr. Y, the owner.
D)rescissible because the contract caused lesion to Mr. Z.

Question 11

Mr. MO executed a real estate mortgage over his land in favor of Mr. ME as security for a substantial loan he obtained from the latter. The mortgage agreement provided for a "first refusal clause", i.e., Mr. MO, is obligated to offer the property first to Mr. ME in case he decides to sell the property mortgaged. Which of the following statements expresses a correct legal principle?

A)As long as the mortgage exists, Mr. MO has no right to sell his property to anyone.
B)Mr. MO may sell the property mortgaged with the consent of Mr. ME.
C)A violation of the "right of first refusal clause" will make the contract entered into by Mr. MO with anyone, void abs initio.
D)A violation of the 'right of first refusal clause" will make the contract entered into by Mr. ME rescissible

Question 12

Which of the following contracts are void?

A)An oral sale of a parcel of land.
B)A sale of land by an agent in a public instrument where his authority from the principal is oral.
C)A donation of a wrist watch worth ₱4,500.
D)A relatively simulated contract.

Question 13

Which of the following expresses a correct principle of law?

A)Failure to disclose facts when there is a duty to reveal them, does not constitute fraud.
B)Violence or intimidation does not render a contract annullable if employed not by a contracting party but by a third person.
C)A threat to enforce one's claim through competent authority, if the claim is legal or just, does not vitiate consent.
D)Simulation of a contract always results in a void contract.

Question 14

.Mr. X orally offered to sell his two-hectare rice land to Mr. Y for ₱10 million. The offer was orally accepted. By agreement, the land was to be delivered (through execution of a notarized deed of sale) and the price was to be paid exactly one-month from their oral agreement.

A)If Mr. X refuses to deliver the land on the agreed date despite payment by Mr. Y, the latter may not successfully sue Mr. X because the contract is oral.
B)If Mr. X refuses to deliver the land, Mr. Y may successfully sue for fulfillment of the obligation even if he has not tendered payment of the purchase price.
C)The contract between the parties is rescissible.
D)The contract between the parties is subject to ratification by the parties.

Question 15

Which of the contracts below are rescissible?

A)Those entered into by guardians whenever the wards whom they represent suffer lesion by more than one third of the value of the object subject matter thereof.
B)Those entered into by guardians in the above when the lesion suffered is one fourth of the value of the property.
C)Those undertaken in fraud of creditors even if the latter has other means to collect the debt.
D)Those where the contract is absolutely simulated.

Question 16

Which of the following reflects a correct legal principle?

A)A, B, and C, are co-owners of a three-hectare orchard. If A decides to sell his share to B, C has a right of redemption.
B)A and B are adjoining owners of a rural land. Each land has an area of half a hectare. If B sells his land to D who does not own any rural land, C has a right of redemption.
C)If the right to repurchase is not exercised within the period agreed upon, a judicial order is necessary to consolidate ownership on the buyer.
D)A contract of sale is not a mode of acquiring ownership.

Question 17

Mr. S sold his land to Mr. B with a right to repurchase within ten years from the date of sale. Despite the lapse of the period of redemption, no such redemption was made.

A)Ownership of the land was consolidated on Mr. by virtue of the failure to redeem by Mr. S.
B)Ownership of the land will be consolidated only upon the registration of the sale with the registry of deeds.
C)Ownership of the land will be consolidated only upon a judicial order.
D)Ownership will be consolidated only with the consent of Mr. S.

Question 18

Mr. S sold a banana plantation to Mr. B for ₱3 million although its market value is ₱20 million. It was agreed that Mr. S shall remain in possession as lessee of the land and shall be responsible for the real estate taxes.

A)The contract gives rise to an action for rescission.
B)The contract gives rise to an action for annulment.
C)The contract is a sale.
D)The contract is presumed to be an equitable mortgage.

Question 19

A and B are capitalist partners, with C as an industrial partner. A and B contributed ₱15, 000.00 each to the capital of the partnership. A contractual liability of ₱40, 000.00 was incurred by the partnership in favor of X. If the capital assets have been exhausted to pay X, leaving a contractual liability of ₱10, 000.00, X can recover the amount from:

A)A and B only
B)A, B and C
C)A, B and C and C can recover for reimbursement from A and B
D)No reimbursement may be recovered by C.

Question 20

A, B and C are partners engaged in a retail business. Their contribution is ₱20, 000.00 each. D is admitted as a new partner with a contribution of ₱8, 000.00. At the time of his admission, the partnership has an outstanding obligation to E in the amount of ₱80, 000.00. In this case:

A)D is not liable to E for this obligation and his ₱8,000 contribution shall remain with the partnership
B)D is liable to E for this obligation so that after the assets of the partnership amounting to ₱68, 000.00 will be exhausted leaving a balance of ₱12, 000.00, only A, B and C shall be liable jointly or pro rata, out of their separate property.
C)D is liable to E for this obligation so that after the assets of the partnership will be exhausted, leaving a balance of ₱12,000.00, all the partners shall be liable jointly or pro rata, including D, out of their separate property.
D)D will be liable only if he knew of the liability of ₱80,000 at the time he joined the partnership.

Question 21

Mr. Ayco offered to sell his land to Mr. Cruz for ₱300,000. Mr. Cruz accepted the offer and paid Mr. Ayco the purchase price. Mr. Ayco delivered the owner's duplicate of the Transfer Certificate of title of the land. Mr. Cruz wants to register the land in his name but the Register of Deeds asks Mr. Cruz for the Deed of Sale. What can Mr. Cruz do?

A)He may occupy and use the land as a buyer in good faith.
B)He cannot compel Mr. Ayco to return the payment because the contract is unenforceable.
C)He may compel Mr. Ayco to execute the Deed of Sale because the contract is val

Question 22

Andrea wrote Bernardo a letter offering to sell a piece of land. Andrea gave Bernardo two months within which to pay the price of ₱500,000. After 50 days Andrea informed Bernardo that she is increasing the price of the land to ₱700, 000. Can Bernardo compel Andrea to accept the ₱500,000 first offered and execute the deed of sale?

A)No, because Bernardo did not signify his acceptance of the offer of ₱500,000
B)Yes, because the period of 2 months has not yet expired.
C)Yes, because Andrea is already estopped by her signed letter.
D)Yes, because there was actual meeting of minds of the parties.

Question 23

Antonio sold a piece of land to Renato binding himself not to sell the same to another person. On the following day, Antonio sold the land to Carlos who immediately took possession in good faith. In the case at bar, the proper remedy of Renato is to:

A)Institute an action for the annulment of the sale to Carlos.
B)Institute an action for the recovery of the land.
C)Institute an action for damages against Antonio.
D)Institute an action for a declaration of nullity of the sale to Carlos.

Question 24

Mr. Reyes has a tax liability of ₱100, 000. In order to evade the payment of the tax liability, he executed a deed of sale of his only parcel of land valued for ₱100, 000.00 in favor of his brother, Pablo. The deed of sale stated a purchase price of ₱20, 000.00 but the BIR has evidence that said price had never been paid.

A)The BIR may not levy upon the land because the sale is valid.
B)The BIR, without having the sale annulled may levy upon the land of (Mr.Reyes pursuant to the Tax Code.
C)The BIR should first have the sale annulled before it may levy upon the land pursuant.
D)The BIR should first have the sale rescinded for lesion to the government.

Question 25

Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. Which of the following constitutes an offer?

A)an definite offer made through an agent
B)business advertisement of things for sale
C)advertisements for bidders
D)a declaration of an intent to sell.