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Obligations and Contracts: Multiple Choice Questions and Answers, Quizzes of Business Finance

Law on Obligation and Contract Reviewer

Typology: Quizzes

2019/2020

Available from 11/07/2022

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1. Which of the following is not legal subrogation none of them
2. X borrowed money from a bank secured by a mortgage on the land of Y, his
close friend. When the loan matured, Y offered to pay the bank but it refused
since Y was not the borrower. Is the bank’s action correct? no, since Y, the
owner of the collateral, has an interest in the payment of the obligation
3. When a third person of his own accord and even without the knowledge of the
original debtor assumes the obligation with the consent of the creditor
expromission
4. Which of the conclusion is correct D who is indebted to C in the amount of
P100,000 conveys to C the ownership of his jeep with an agreed appraisal
value of P150,000. C is now obligated to pay D P50,000.
5. A owes B P200,000.00 demandable and due on September 10, 2017. B on the
other hand, owes A P200,000.00 demandable and due on or before September
30, 2017. If B claims compensation on September 16, 2017, can A rightfully
oppose? no, B who was giving the benefit of the term, may claim compensation
because he could then choose to pay his debt on September 10, 2017 which is
actually on or before September 30, 2017
6. Upon the proposal of a third person, a new debtor substituted the original debtor
without the latter’s consent. The creditor accepted the substitution. Later,
however, the new debtor became insolvent and defaulted in his obligation. What
is the effect of the new debtor’s default upon the original debtor the original
debtor is freed from liability since novation took place and this relieved him of
his obligation
7. When the obligation consists in the delivery of a generic thing whose quality and
circumstances have not been agreed upon: the purpose and other
circumstances shall be taken into consideration in determining the quality of
the object to be delivered.
8. A thing is lost in the following cases. Which is the exception when the
object diminishes its value
9. The following statements pertain to either payment by cession or dacion
en pago: I. The debtor is insolvent. II. Ownership of the thing/s is
transferred to the creditor/s. III. Plurality of creditors is required. IV.
Obligations are totally extinguished as a rule. Which of the following is
correct?statements II and IV pertain to dacion en pago
10. A bought B’s property through C, an agent empowered with a special
power of attorney (SPA) to sell the same. When A was ready to pay as
scheduled, B called, directing A to pay directly to him. On learning of this,
C, B’s agent, told A to pay through him as his SPA provided and to
protect his commission. Faced with two claimants, A consigned the
payment in court. B protested, contending that the consignation is
ineffective since no tender of payment was made to him. Is he correct? no,
since consignation without tender of payment is allowed in the face of conflicting
claims on the plaintiff.
11. On December 25, 2018, C, the owner of a sarisari store, purchased
several bags of “Yummy” candy worth P1,000.00 from D, an authorized
dealer of the product. C tendered her payment to D consisting of 200
pieces of P5.00 coins. In this case: D cannot refuse to accept the payment
because what C was offering as payment is legal tender
12. B borrowed from ABC Bank P2,000,000 payable at the end of 5 years.
Before maturity, an extraordinary deflation supervened causing the value
of the debt to rise to P5,000,000 on the date of maturity. On due date, B
must pay ABC Bank P800,000
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1. Which of the following is not legal subrogation none of them

2. X borrowed money from a bank secured by a mortgage on the land of Y, his

close friend. When the loan matured, Y offered to pay the bank but it refused

since Y was not the borrower. Is the bank’s action correct? no, since Y, the

owner of the collateral, has an interest in the payment of the obligation

3. When a third person of his own accord and even without the knowledge of the

original debtor assumes the obligation with the consent of the creditor

expromission

4. Which of the conclusion is correct D who is indebted to C in the amount of

P100,000 conveys to C the ownership of his jeep with an agreed appraisal

value of P150,000. C is now obligated to pay D P50,000.

5. A owes B P200,000.00 demandable and due on September 10, 2017. B on the

other hand, owes A P200,000.00 demandable and due on or before September

30, 2017. If B claims compensation on September 16, 2017, can A rightfully

oppose? no, B who was giving the benefit of the term, may claim compensation

because he could then choose to pay his debt on September 10, 2017 which is

actually “on or before September 30, 2017

6. Upon the proposal of a third person, a new debtor substituted the original debtor

without the latter’s consent. The creditor accepted the substitution. Later,

however, the new debtor became insolvent and defaulted in his obligation. What

is the effect of the new debtor’s default upon the original debtor the original

debtor is freed from liability since novation took place and this relieved him of

his obligation

7. When the obligation consists in the delivery of a generic thing whose quality and

circumstances have not been agreed upon: the purpose and other

circumstances shall be taken into consideration in determining the quality of

the object to be delivered.

  1. A thing is lost in the following cases. Which is the exception when the object diminishes its value
  2. The following statements pertain to either payment by cession or dacion

en pago: I. The debtor is insolvent. II. Ownership of the thing/s is transferred to the creditor/s. III. Plurality of creditors is required. IV. Obligations are totally extinguished as a rule. Which of the following is correct?statements II and IV pertain to dacion en pago

  1. A bought B’s property through C, an agent empowered with a special

power of attorney (SPA) to sell the same. When A was ready to pay as scheduled, B called, directing A to pay directly to him. On learning of this, C, B’s agent, told A to pay through him as his SPA provided and to protect his commission. Faced with two claimants, A consigned the payment in court. B protested, contending that the consignation is ineffective since no tender of payment was made to him. Is he correct? no, since consignation without tender of payment is allowed in the face of conflicting claims on the plaintiff.

  1. On December 25, 2018, C, the owner of a sarisari store, purchased

several bags of “Yummy” candy worth P1,000.00 from D, an authorized dealer of the product. C tendered her payment to D consisting of 200 pieces of P5.00 coins. In this case: D cannot refuse to accept the payment because what C was offering as payment is legal tender

  1. B borrowed from ABC Bank P2,000,000 payable at the end of 5 years. Before maturity, an extraordinary deflation supervened causing the value of the debt to rise to P5,000,000 on the date of maturity. On due date, B must pay ABC Bank P800,

13. The delivery of a private document evidencing a credit, made voluntarily

by the creditor to the debtor even before the debt is paid, extinguishes

the obligation by implied remission

14. Statement I: The nullity of the principal obligation carries with it that of the

penal clause. Statement II: Payment means not only the delivery of

money but also the performance, in any other manner, of an obligation.

15. Which of the following is correct Both statements are true

16. Which of the following is not an element of Compensation there is

controversy or adverse claim over any debts to be compensated.

17. Which of the following is not really a special payment application for

payment

18. Payment by third person is presumed for the benefit of the creditor in the

following cases, except determination

19. A owes B P100,000. With consent of both, C pays B P50,000. Now B and

C are the creditors of A to the amount of P50,000 each. Suppose A has

only P50,000. Which is correct? B should be preferred

20. Personal novation substitution of debtor

subrogation of a third person in the place of the creditor

21. D owes C P150,000 payable on January 5, 2018. To fulfill the obligation,

D with the consent of C, delivers his only car on January 4, 2018 worth

140,000 at around 8:00 pm to C’s residence. C accepted the car but the

same was destroyed by lightning after one hour upon delivery. In this

case D still owes C the amount of P10,000.

22. Three of the following are requisites of payment in cession. Which is the

exception?one debtor and one creditor

23. T is a lessee of X. Under the lease contract, T must pay the monthly

rental of P25,000 to X at the latter’s office within the first 5 days of the

month. On the sixth month of the lease, T went to X’s office to pay the

rental but he was told by G, an employee of X, that the latter was

confined at the hospital. G told T that he could entrust payment to him. H,

a son of X, who happened to be around, however, demanded that T must

pay to him claiming that as X’s son, he was the one authorized to receive

the payment. Given where you do not know to whom you will give your

payment, which of the following modes of payment would you avail

yourself of if you were T consignation

24. To which of these modes of special payment is the law on sales

applicable? dacion en pago

25. Change of persons or objects novation

26. Which of the following is not a ground for the extinguishment of an

obligation? death of creditor

Quiz 4

27. A, B and C are jointly and severally liable to D amounting to P900,000. D

allows C an extension of two years within which to pay his portion of the

indebtedness. In this case:D can compel A or B or C to pay him P600,

28. Which is not considered as quasi contract? when the third person, with the

knowledge of the debtor, pays the debt

tenable? no, as in tort actions, the proper defense is due diligence in the selection and supervision of the employee by the employer.

  1. A, B and C solidarily owe X P300,000. X remitted C’s share. A, therefore,

paid later only P200,000. Assuming that B is insolvent: A can recover reimbursement from C amounting to P50,000.

  1. D borrowed from C P100,000 with a penalty of 20% if not paid on time.

On due date, D was able to pay C the borrowed amount. How much should D pay C P100,000 only

  1. Delay or default on the part of the obligor is known as mora solvendi
  2. D borrowed from C P1,000,000 mortgaging in favor of the latter his house

and lot. Said obligation is due December 15, 2018. On July 20, 2017, the house was hit by a lightning and was destroyed. In this case C can validly demand payment from D on July 20, 2017 unless D gives another collateral equally satisfactory.

  1. The following are either joint or solidary liability: I. Liability of the principal and the agent when the former allowed the agent to act as though he had full powers. II. Liability of two or more persons who have appointed an agent for a common transaction or undertaking. III. Liability of two or more bailees to whom a thing is loaned in the same contract. IV. The responsibility of two or more agents who are appointed simultaneously by the principal. V. Responsibility of two or more officious managers the liability under I, II, III, and V are solidary
  2. This is adjudicated in order that a right of the plaintiff, which has been

violated or invaded by the defendant, may be vindicated or recognized: nominal damages

  1. The debtor shall lose the right to make use of the period in the following

cases, except when he does not furnish any guaranty or security to the creditor

  1. On May 1, 2018, D executed a written undertaking obliging himself to deliver 100 sacks of rice to C on May 31, 2018. On May 28, 2018, C demanded the delivery of 100 sacks of rice from D but D did not comply. The following day, a fire of undetermined origin destroyed D’s warehouse together with about 500 sacks of rice stored therein and from which D intended to get 100 sacks of rice for delivery to C D’s obligation to deliver 100 sacks of rice to C is not extinguished because he can get 100 sacks of rice from other sources.
  2. A owed B P1 million due on October 1, 2018 but failed to pay her on due date. B sent a demand letter to A giving her 5 days from receipt within which to pay. Two days after receipt of the letter, A personally offered to pay B in manager’s check but the latter refused to accept the same. The 5 days lapsed. May A’s obligation be considered extinguished? no, since tender of payment even in cash, if refused, will not discharge obligation without proper consignation in court
  3. A borrowed P1 million from a bank, secured by a mortgage on his land. Without his consent, his friend B paid the whole loan. Since A benefited from the payment, can B compel the bank to subrogate him in its right as mortgagee of A’s land? no, since B paid for A’s loan without his approval Quiz 3
  1. When there is concurrence of two or more creditors of two or more

debtors in the one and the same obligation, the obligation is Either Joint or Solidary

  1. Each of the obligors is liable for the entire obligation and each of the

creditors is entitled to demand entire compliance with the prestation from any of the debtors Solidary obligation

  1. Alex and Bob are solidary debtors of Cathy and Debbie, solidary creditors

to the amount of P2,000.00. If Cathy waives the whole obligation in favor of Alex, what is the legal consequence? The obligation is extinguished without prejudice to Debbie collecting her share from Cathy while Alex has no right to collect from Bob.

  1. Assuming in preceding question, that when the obligation matured,

Debbie extends for one year Bob’s obligation to pay his portion of the obligation, choose the legal effect of the extensions Alex and Bob should only pay half of the obligation

  1. What is the effect of breach of joint indivisible obligation by one of the

obligors?It is converted to indemnity for damages

  1. An obligation where the prestation or object cannot be performed by parts

without affecting or destroying its essence or substance Indivisible

  1. An example of indivisible obligation: To give a definite thing
  2. The following statements pertaining to solidary obligation are correct,

except A solidary creditor can assign his rights without the consent of the others

  1. The following are the effects of novation, compensation, confusion or

remission made by any of the solidary creditors of with any of the solidary debtors, except In case of remission, the co-debtor can recover anything from the other debtor

  1. The following statements concerning the payment of solidary obligations

are correct, except When one of the solidary debtors cannot, because of his insolvency, reimburse his share to the debtor paying the obligation, such shall be borne alone by paying debtor and the other co-debtors shall not share in the loss

  1. Which of the following statements is incorrect? The remission of the whole obligation, obtained by one the solidary debtors, entitle him to reimbursement from his co-debtors
  2. The following are the defenses that may be availed of by the solidary debtor in actions filed by the creditor, except Defenses personal to other debtors for the whole obligation
  3. The following statements pertaining to divisible and indivisible obligations

are correct, except Divisibility or indivisibility of the obligation refers to the object or thing and not to the performance of the obligation

  1. suspensive period and resolutory period are also known as: Ex die and in diem, respectively
  2. Whenever in an obligation a period is designated, to whose benefit the

period is presumed to have been established? Both creditor and debtor

  1. If there is no stipulation as to whose benefit the period is established,

which of the following statements is incorrect? The term is for the benefit of the debtor

  1. In case there is stipulation as to whose benefit the period is established,

which of the following statements is incorrect? If it is for the benefit of the debtor only, he cannot pay validly at any time before the period expires

  1. As a general rule, the court is not allowed to fix the period of an obligation. The following are the exceptional instances wherein the court may fix the
  1. Obligation derived from this source of obligations is not presumed and

must be expressly provided by the Civil Code or special laws in order to be demandable law or ex lege

  1. In an obligation with a penal clause, the penalty takes the place of: indemnity for damages and payment of interests in case of non-compliance
  2. An obligation characterized by the quality of immediate demandability pure
  3. Tender of payment is defined as the act of offering the thing or amount due
  4. An obligation where only one of the parties is bound to fulfill a prestation unilateral
  5. Obligations arising from this source of obligations have the force of law

between the contracting parties and should be complied with in good faith: contract;

  1. A past event unknown to the parties may be considered a condition: when it is future knowledge or proof of past event
  2. The delivery of a private document evidencing a credit, made voluntarily by the creditor to the debtor even before the debt is paid, extinguishes the obligation by: implied remission
  3. It is an act or omission which causes damage to another, there being fault

or negligence and there being no pre-existing contractual relations between the parties: quasi-delict

  1. Each of the obligors is liable for the entire obligation and each of the

creditors is entitled to demand entire compliance with prestation from any of the debtors: solidary obligation

  1. Obligations governed primarily by the agreement of the parties those arising from contracts
  2. An obligation where the prestation or object cannot be performed by parts

without affecting or destroying its essence or substance: indivisible

  1. Effect of payment by cession on the entire obligation the debtor is released from his obligation only up to the net proceeds of the sale the property assigned.
  2. Alternative and facultative obligations are kinds of distributive obligation

100.Which is not considered as quasi contract? when the third person with the knowledge of the debtor pays the debt

101.An obligation of spouses to render mutual support arises from: law

102.Generally, tender of payment alone without consignation cannot

discharge the obligation, however, in which of the following instances that consignation alone extinguishes an obligation? All

103.The standard of diligence required in an obligation to give

something:diligence of a good father of a family

104.The debtor shall lose the right to make use of the period in the following

cases, except when he becomes insolvent and gives guaranty or security for the debt 105.an event that is both future and uncertain upon which the existence or

extinguishment of an obligation is made to depend condition

106.A owes B P100,000. With consent of both, C pays B P50,000. Now B and

C are the creditors of A to the amount of P50,000 each. Suppose A has only P50,000. Which is correct?B should be preferred 107.Quasi-delicts, as distinguished from crimes include all acts in which any kind of fault or negligence intervenes

108.The concept of obligation, in its passive aspect or as defined by the Civil

code in Article 1156, is correlative (reciprocally related or corresponding) to the concept ofright

109.Delay or default on the part of the obligor is known as mora solvendi

110.Effect of fulfillment of a resolutory condition in an obligation to give: return to status quo before the constitution of obligation 111.In case of material damage or injury, the liability of a convicted person

includes all of the above.

112.If a creditor’s right of action to collect based on a written contract has

prescribed after 10 years from the time the action has accrued, the civil obligation of the debtor is converted into natural obligation 113.Mario binds himself to give a car to his sister if she becomes a certified

public accountant before year 2015, the obligation is subject to positive condition 114.A, B and C solidarily owe X P300,000. X remitted C’s share. A, therefore,

paid later only P200,000. Assuming that B is insolvent A can recover reimbursement from C amounting to P50,

115.The following are requisites of application of payments, except the debtor must be insolvent

116.A source of obligation where it is not the act or omission which gives rise to the obligation, but the want of care required from the circumstances quasi-delict 117.The definition of obligation emphasizes the obligation of the obligor or

debtor and implies the correlative right of the obligee or creditor to demand the performance of the act or conduct

118.Obligations arising from the same cause where each party is a debtor

and a creditor of the other reciprocal

119.A period or term, as distinguished from a condition always refers to the future and is sure to happen or arrive 120.What is the effect of breach of joint indivisible obligation by one of the

obligors? it is converted to indemnity for damages

121.If the debtor promises to pay a previous loan of P10,000.00 to the

creditor on or before November 2017 provided that he (debtor) is in Manila, the obligation is: subject to potestative condition and valid 122.All rights acquired by virtue of an obligation are transmissible, what is the

exception? All

123.On December 25, 2018, C, the owner of a sarisari store, purchased

several bags of “Yummy” candy worth P1,000.00 from D, an authorized dealer of the product. C tendered her payment to D consisting of 1000 pieces of P0.25 coins. In this case: the tender made by C was invalid because the tendered amount is not legal automatically extinguished

124.The following are primary classes of obligations, except real and personal 125.Which of the following is not a ground for the extinguishment of an

obligation? death of creditor

126.This is adjudicated in order that the right of the plaintiff which has been

violated or invaded by the defendant may be vindicated or recognize nominal damages

149.As a general rule, every person criminally liable for a felony is: also civilly liable

  1. On May 1, 2018, D executed a written undertaking obliging himself to

deliver 100 sacks of rice to C on May 31, 2018. On May 28, 2018, C demanded the delivery of 100 sacks of rice from D but D did not comply. The following day, a fire of undetermined origin destroyed D’s warehouse together with about 500 sacks of rice stored therein and from which D intended to get 100 sacks of rice for delivery to C D’s obligation to deliver 100 sacks of rice to C is not extinguished because he can get 100 sacks of rice from other source 151.A definition of an obligation all of the abov

152.The following are essential elements of a valid object or prestation,

except none of the above

153.A creditor’s right to the fruits of the object from the time the obligation to deliver arises: personal right or jus in personam

154.An obligation with period or term, as distinguished from a conditional

obligation refers to an interval of time which is future and certain;

155.A source of obligation, which is a legal fiction of legal relation resulting

from lawful, unilateral and voluntary act where there is no existing contract: quasi-contract;

156.A owed B P1 million due on October 1, 2018 but failed to pay her on due

date. B sent a demand letter to A giving her 5 days from receipt within which to pay. Two days after receipt of the letter, A personally offered to pay B in manager’s check but the latter refused to accept the same. The 5 days lapsed. May A’s obligation be considered extinguished? no, since tender of payment even in cash, if refused, will not discharge obligation without proper consignation in court 157.A, B and C are jointly and severally liable to D amounting to P900,000. D

allows C an extension of two years within which to pay his portion of the indebtedness. In this case: D can compel A or B or C to pay him P600,

158.It is an extra-contractual obligation where an officious manager voluntarily takes over an abandoned or neglected property or business without authority of the owner negotiorum gestio

159.Payment by third person is presumed for the benefit of the creditor in the

following cases, except determination

160.An instance where the debtor shall lose every right to make use of the period all of the above

161.D owes C P150,000 payable on January 5, 2018. To fulfill the obligation,

D with the consent of C, delivers his only car on January 4, 2018 worth 140,000 at around 8:00pm to C’s residence. C accepted the car but the same was destroyed by lightning after one hour upon delivery. In this case: D still owes C the amount of P10,

162.Which of the following is not an element of Compensation? there is controversy or adverse claim over any debts to be compensated 163.When will loss of the thing due extinguish an obligation? in obligations to deliver determinate things, the debtor is without fault before he has incurred delay

164.In alternative obligations, what is the remedy of the debtor if through the

fault of the creditor he (debtor) cannot make a choice according to the terms of the obligation? the debtor may rescind the contract with damages;