A entered into a contract whereby he obligated himself to pay B on or before September in the form of Australian currency. When the obligation became due and demandable, A delivered to B Australian currency. Is A correct?
A)B can refuse to accept the payment because the currency being offered is not legal tender in the Philippines.
B)A is correct in offering Australian currency because of the contract.
C)A is not correct because the stipulation to pay in Australian currency is void because it is contrary to law.
D)A is not correct because the stipulation to pay in the form of another currency is void because it is contrary to public policy. (RA 8183)

Question

Quizplus · Accepted Answer

A is correct in offering Australian currency because the parties agreed upon this form of payment in their contract. Contracts are binding as to the terms and conditions agreed upon by the parties, as long as these terms do not violate law, morals, good customs, public order, or public policy.

A Entered into a Contract Whereby He Obligated Himself to Pay