MCQs – CONTRACTS c.

may be terminated by mere agreement of the parties;

Academic Year 2018-2019 (Second Semester) d. in case of breach, the remedy is an action for damages.
7. Those which exist as part of the contract even if the parties do not provide for
1. A concept of a contract: them because the law creates them:
a. a juridical convention manifested in legal form, expressed or implied; a consent, subject matter (object) and cause or consideration;
b. agreement of wills where the law has only a suppletory effect; b. natural elements;
c. a legal transaction to create, modify, or terminate a legal tie between the c. accidental elements;
parties; d. none of the above.
d. all of the above; 8. Those elements which may be present or absent, depending upon the agreement
2. It tends only to assure and pave the way for the celebration of a contract in the of the parties:
future; until the contract is actually made, the rights and obligations are not yet a. essential elements;
determined: b. natural elements;
a. perfect promise; c. accidental elements;
b. policitacion; d. terms and conditions.
c. pact; 9. This contract belongs to a class of contracts according to cause or equivalence of
d. stipulation. the value of prestation:
3. A stage of a contract where there is meeting of minds: a. onerous;
a. preparation; b. consensual;
b. birth; c. real;
c. consummation; d. formal or solemn;
d. generation. e. commutative.
4. What is an auto contract? 10. A contract where one of the parties gives something or renders service to
a. a contract where two distinct persons enter into it; another in consideration of a previous or past deeds of the other:
b. a contract where one person contracts with himself in different capacities; a. onerous;
c. one where a party has already a prepared form of a contract containing the b. lucrative;
stipulations he desires and then asks the other party to agree to them; c. remunerative;
d. one which gives rise to an obligation for only one of the parties. d. aleatory.
5. It is a contract where the prestations are to be complied with at some future time: 11. A characteristic of a contract, which states that its validity and performance
a. institutional; cannot be left to the will of only one of the parties:
b. executory; a. autonomy;
c. executed; b. relativity;
d. synalagmatic. c. mutuality;
6. A juridical convention (such as marriage, adoption and succession) as d. obligatory force.
distinguished from a contract: 12. Freedom to contract is one of the liberties guaranteed by the Constitution and it
a. is governed primarily by the agreement of the parties; provides that contracting parties may establish such stipulations, clauses, terms and
b. once celebrated, the result is the status; conditions as they may deem convenient, however, which of the following
stipulations is void?
 2

a. a penalty may be imposed in case of default; b. is against public good;

b. an employee is prohibited to engage in similar business competitive with c. contravenes some established interests of society;
the employer’s business within a certain time; d. tends clearly to undermine the security of individual rights;
c. the vendor may rescind the sale upon failure of the vendee to pay any e. all of the above.
subsequent installment; 18. A stipulation that is against public policy:
d. promise to pay in consideration of testifying in court. a. a retainer contract between a judge and a company for the judge to render legal
13. The constitutional guarantee of non-impairment of obligations is applicable to services;
this source of obligation: b. a partnership agreement whereby one will contribute his personal connections
a. law; to public officials;
b. contract; c. confession of judgment;
c. quasi-contract; d. all of the above.
d. delict; 19. Digong, an employee of Barack, entered into an agreement with the latter that
e. quasi-delict. he would not engage in the same business directly competing with that of his
14. Which of the following is not prohibited by law? employer within five (5) years from the date of his resignation from Barack’s
a. pactum commissorium; company. Is the agreement valid?
b. pactum leonina; a. Yes, the restriction is reasonable;
c. pactum de non alienondo; b. Yes, the party may impose any restriction for the good of any of the parties;
d. pacto de retro sale. c. No, it constitutes undue restraint of trade or profession;
15. An instance where the contract or stipulation is against morals: d. No. it is against public order.
a. a debtor agrees to work as “kasambahay” for her creditor without pay until the 20. A stipulation or contract that is contrary to good customs:
debtor could find the money with which to pay the debt; a. a contract of trial marriage;
b. a student was required to refund scholarship expenses as a consequence of b. a stipulation waiving future fraud;
transferring to another school; c. a stipulation to suppress evidence;
c. a promise of marriage based on a carnal consideration; d. an open ended loan with 3% interest per month.
d. all of the above; 21. This rule is expressed in a maxim “the law will not aid either party to an illegal
e. none of the above. contract:”
16. A limitation on the right to contract which pertains to public safety of the a. rule of in pari delicto;
people: b. the principle of pactum commissorium;
a. law; c. rule of res inter alios acta;
b. morals; d. rule on consensuality.
c. good customs; 22. Contracts which are governed by stipulations of the parties, by the Civil Code,
d. public order; by the rules applicable to the most analogous contracts, and by the customs of the
e. public policy. place:
17. In order to declare a contract void as against public policy, its consideration or a. nominate contracts;
thing to be done: b. innominate contracts;
a. has a tendency to injure the public; c. onerous;
 3

d. gratuitous. contract?
23. The rule that an assignee or an heir shall be bound by the terms of a contract (in a. one of the contracting parties is allowed to determine the validity of the
the same manner as the contracting party) is not absolute. The rule is not applicable contract;
when: b. one of the contracting parties is allowed to determine the performance of the
a. there is a stipulation pour autrui or beneficial stipulation; contract;
b. the rights and obligations arising from the contract are not transmissible by its c. a third person is authorized to determine the fulfillment of the contract;
nature; d. a third person is authorized to determine the validity of the contract.
c. there is intermeddling or interference; 28. Contracts are perfected by mere consent of the parties. However, which of the
d. all of the above; following contracts cannot be perfected even if there is concurrence of wills as to
e. none of the above. the object and cause?
24. An exception to the rule of relativity: a. deposit;
a. pledge of a personal property; b. pledge;
b. unrecorded mortgage of a building; c. loan;
c. a contract in fraud of creditors; d. contract of carriage;
d. an oral contract of lease for more than a year. e. all of the above;
25. Which of the following is not a requisite of stipulation pour autrui? f. none of the above.
a. the stipulation is only part of the contract; 29. It is the giving of one’s conformity to the terms of the contract freely,
b. the benefit or favor conferred is just an incidental benefit or interest; intelligently and voluntarily:
c. the third person must have communicated his acceptance before revocation of a. offer;
the contract; b. acceptance;
d. neither of the contracting parties is the legal representative of the third person. c. consent;
26. Ms. Katibog, a very popular celebrity, was under an exclusive contract with d. invitation.
ABS XNN. Mr. Maliksi, president of GME 77, fell in love with Ms. Katibog and 30. Consent is manifested by:
induced the latter to break the contract with ABS XNN by giving her a house and a. meeting of the offer and the acceptance upon the object;
lot for every season completed aside from doubling her salary. ABS XNN (plaintiff) b. meeting of the minds of the contracting parties;
sued GME 77, Ms. Katibog and Mr. Maliksi (defendants) for damages. Which c. meeting of the offer and the acceptance upon the thing and the cause of
legal effect is correct as a consequence of the act of Mr. Maliksi? the contract;
a. Mr. Maliksi and Ms. Katibog are liable for damages for tort committed against d. acceptance of the consideration and object.
ABS XNN; 31. A valid consent:
b. Mr. Maliksi is not liable for damages as the contract between Ms. Katibog and a. reluctant consent;
ABS XNN was a restriction of her freedom to contract; b. consent given against better judgment;
c. Mr. Maliksi is not liable for damages as the contract between Ms. Katibog and c. consent against his wish and desires;
ABS XNN was a restraint of trade; d. all are freely given;
d. Mr. Maliksi and Ms. Katibog are liable for damages for breach of contract. e. all are not valid.
27. Which of the following stipulations is allowed under the principle of mutuality 32. Sido emailed Boyong stating “Re: My house and lot at 12 Richlife Street,
of Barangay Pahirap, Calapan City, I’m in a position and willing to entertain your

purchase of the property under the following conditions: a) Purchase price of
P10,000,000.00 cash; b) all taxes and expenses to be shouldered by the buyer; and
c) turnover of the property after the transfer of the title.” Boyong immediately
replied and accepted the proposition. Is there a perfected contract of sale?
a. Yes, the offer is definite and duly accepted by Boyong;
b. Yes, all the elements of a contract are present;
c. No, the offer is not definite as Sido still has to deliberate on the transaction;
d. No, the offer is not certain and the acceptance is not absolute.
33. A business advertisements of things for sale are considered:
a. definite offer;
b. mere invitations to make an offer;
c. invitation to make a bid;
d. accepted once paid.
34. “For sale: Toyota Vios: Model 2009; Color Blue; Plate Number ZBC 219; Price
P300,000.00 cash only and non-negotiable. If interested, please contact the
registered owner Mr. Zoren Xavier at 0917-2501472.” What is the effect of the
advertisement?
a. it constitutes a definite offer;
b. it is a mere invitation to make a proposal;
c. it is not a definite offer;
d. it is a mere invitation to make a counter-offer.
35. It is a preparatory contract to the principal contract should the parties finally
consummate their transaction which is under negotiation:
a. a contract with earnest money;
b. an option contract;
c. unilateral promise to buy or sell;
d. an agreement with stipulation on down payment.
36. In an option founded on a consideration regarding offers to buy or sell:
a. the owner parts with his right to sell his property for a limited period;
b. it is a mere offer which is not binding;
c. the offer may still be withdrawn even if the offeree has already accepted it;
d. the promisor is not bound by his promise and may, accordingly withdraw it.
37. Disqualification to contract, as distinguished from incapacity to contract:
a. restrains the very right itself;
b. based on subjective circumstances of certain persons;
c. the resulting contract is voidable;
4
d. the party may still enter into contract through others.
38. In this case, contracts entered into by minors are valid:
a. bank deposits;
b. purchase of necessaries;
c. estoppels;
d. all answers are correct.
39. Mistake of fact, as distinguished from mistake of law:
a. vitiates consent;
b. is an erroneous conclusion regarding the interpretation of the legal effects of a
certain act;
c. generally does not render the contract voidable;
d. the principle that ignorance of the law excuses no one is applicable.
40. Mistake or error that vitiates consent:
a. when mutual error of the parties as to the legal effect of an agreement frustrates
their real purpose or intent;
b. when mistake refers to the object of the contract or to a condition which
principally moved one or both parties to enter into a contract;
c. ignorance of fact;
d. all of the above;
e. answer not found.
41. Angus sold his specific boer goat to Alfredo for P5,000.00, both parties
believing that she was barren. Before delivery, it was discovered that the boer goat
was with a kid. May Angus refuse to sell his boer goat to Alfredo?
a. No, the contract is already perfected;
b. Yes, the contract is voidable due to mutual mistake of the parties;
c. Yes, the contract is unenforceable due to lack of cause;
d. Yes, the contract is not in a public document.
42. Which of the following classes of vices is considered as vice of declaration?
a. intimidation, violence or undue influence;
b. mistake or error;
c. fraud;
d. simulation of contract.
43. Which of the following errors or mistakes will vitiate consent?
a. error as to personal motive;
b. error as to the true boundaries of a parcel of land offered for sale;
c. error in the identity of a particular singer whose performance may be done by
 5

other singers; d. all of the above.

d. error coupled with negligence or knowledge of the doubt, contingency or risk. 49. Use of insidious words and machinations by one of the contracting parties to
44. The following are required in order to vitiate consent through intimidation, induce the other party to enter into a contract, which, without them, he would not
except: have agreed to:
a. one of the contracting parties is compelled to give his consent by a reasonable a. dolo causante;
and well-grounded fear of an evil; b. dolo incidente;
b. the force employed to wrest consent must be serious and irresistible; c. fraud in the performance;
c. the evil must be imminent and grave; d. all of the above.
d. it must be the determining cause for the party upon whom it is employed in 50. Usual exaggerations in trade not in themselves fraudulent because the other
entering into the contract. party has the opportunity to know the facts:
45. If Kobe signs a contract of sale because Lebron is pointing a gun at him, the a. intolerable fraud;
said contract is: b. dealer’s talk;
a. void due lack of consent; c. broker’s talk;
b. voidable due to violence; d. caveat emptor.
c. voidable due to intimidation; 51. It is the act of deliberately deceiving others, the parties pretending by their
d. rescissible because of undue influence. agreement the appearance of a contract which is either non-existent or concealed:
46. Mr. Bird signed a compromise agreement with the Alpha Bank because the a. casual fraud;
latter threatened to foreclose his properties used as collaterals for his loans and to b. insidious machinations;
refuse him any further credit facilities, can Mr. Bird question the compromise c. simulation of contract;
agreement? d. incidental deceit.
a. Yes, the agreement is void for lack of consent; 52. In a relatively simulated (disimulado) or disguised contract, the parties are
b. Yes, the agreement is voidable because the bank employed intimidation; bound to the true or real agreement, except:
c. No, the agreement is valid because the bank’s claim is legal and just; a. when the contract prejudices a third person;
d. Yes, the agreement is unenforceable due to bank’s lack of authority to b. when the purpose of the contract is contrary to law, morals, good customs,
foreclose the properties. public order, or public policy;
47. Undue influence means: c. a and b;
a. solicitation and argument; d. none of the above.
b. importunity or persuasion of another against his better judgment; 53. Which of the following may not be the object of contracts?
c. appeals to affection which made the party enter into contract against his wishes a. future things;
and desires; b. transmissible rights;
d. subjugating the mind of a contracting party as to destroy his free agency; c. future inheritance;
e. all of the above. d. contingent right;
48. Which of the following is a ground for annulment of a contract? e. services.
a. dolo causante; 54. What is the legal effect of relative impossibility of an object of the obligation?
b. dolo incidente; a. the contract is void;
c. fraud in the performance; b. the contract is valid;
 6

c. the contract is unenforceable; 61. The following must appear in a public instrument, except:
d. the contract voidable. a. sale or conveyance of real right;
55. The reason why a party entered into a contract: b. cession or repudiation of hereditary rights;
a. cause or consideration; c. power to administer property;
b. juridical tie; d. contracts where the amount involved is P500.00.
c. object; 62. It is a remedy in equity by means of which a written instrument is made or
d. motive; construed so as to express or confirm the real intention of the parties when some
56. The following are classes of contracts according to cause, except: error or mistake is committed:
a. onerous contracts; a. annulment;
b. contracts of adhesion; b. resolution;
c. remuneratory contracts; c. reformation;
d. contracts of pure beneficence. d. rescission proper.
57. Contracts without cause or with unlawful cause produce no effect whatsoever, 63. If two parties agree upon a mortgage or pledge or real or personal property, but
which of the following is a requisite of a good cause? the instrument states that the property is sold absolutely or with a right of
a. the cause must be existing at the time of the perfection of the contract; repurchase, what is the remedy of the injured party?
b. the motive must be shown at the time of the execution of the contract; a. action for rescission;
c. the cause must be expressed; b. action for annulment;
d. the cause must be the exact equivalent of the other party’s prestation. c. action for declaration of nullity;
58. Effect of a statement of false cause in a contract: d. action for reformation.
a. the contract is void; 64. In what instance reformation is proper?
b. the statement is deemed not written; a. simple donations inter vivos wherein no condition is imposed;
c. the contract is voidable; b. unilateral mistake of one party and concealment on the part of the other;
d. the obligation created by the statement is extinguished. c. wills;
59. An owner of land worth P1Million sold it for only P20.00, is the contract valid? d. when the real agreement is void.
a. no, the price is shockingly inadequate; 65. When it is absolutely impossible to settle doubts by the rules of interpretation
b. yes, where the cause is the mere liberality of the owner; under the Civil Code, and the doubts refer to incidental circumstances of a
c. no, because of a false cause; gratuitous contract, what shall prevail?
d. all are correct. a. greatest reciprocity of interests;
60. As a general rule, lesion or inadequacy of cause shall not invalidate a contract, b. least transmission of rights;
except: c. literal meaning of stipulation;
a. when the lesion is more than 25% of the value of the thing which is the d. usage or custom of the place.
object of the contract; 66. Contracts validly entered into by contracting parties, but for having caused
b. in cases specified by law; economic damage or lesion to one of the parties or to a third person or for having
c. when there has been fraud, mistake or undue influence; entered into in fraud of creditors, or without the knowledge and approval of the
d. all of the above; judicial authority having custodia legis over the property involved:
e. none of the above. a. rescissible;
 7

b. voidable; b. statute of frauds;

c. unenforceable; c. deadman’s statute;
d. void; d. none of the above.
e. inexistent. 72. The following contracts exist and are valid but cannot be enforced in court if
67. Which of the following is rescissible? not evidenced by writing or secondary evidence of their contents, except:
a. a contract of sale of real property of a ward with lesion of more than 25% a. a contract entered into in the name of another person by one who has no
without court approval; authority or legal representation, or who has acted beyond his power;
b. a contract for repair of a car belonging to the ward with lesion of more than b. an agreement that by its terms is not to be performed within a year from the
25% with court approval; making thereof;
c. a contract of lease for six months of a building owned by the ward with lesion c. a special promise to answer for the debt, default, or miscarriage of another;
of more than 25% without court approval; d. an agreement made in consideration of marriage, other than a mutual promise
d. all of the above. to marry;
68. A defective contract where the origin of the defect is the incapacity of both e. a representation as to the credit of a third person.
contracting parties: 73. Which of the following is correct?
a. rescissible; a. the statute of fraud applies only to executory contracts;
b. voidable; b. contracts infringing the Statute of Frauds are void;
c. unenforceable; c. the defense of the Statute of Frauds cannot be waived;
d. void; d. a contract violating the Statute of Frauds can be assailed by third persons.
e. inexistent. 74. A characteristic of a void or inexistent contract:
69. It is the validation of a transaction otherwise without validity or partly valid: a. generally, it produces no civil effects;
a. ratification; b. it is susceptible to ratification;
b. confirmation; c. action or defense for the declaration of its inexistence or absolute nullity
c. acknowledgment; can be waived or may prescribe;
d. all of the above; f. it can give rise to another contract.
e. none of the above. 75. Which of the following contracts is valid?
70. A defective contract where the origin of the defect is the absence of any of the a. contracts whose object is outside the commerce of men;
essential requisites of a contract: b. contracts which contemplate an impossible service;
a. rescissible; c. contracts whose causes or objects are future things and did not exist at the time
b. voidable; of the transactions;
c. unenforceable; d. contracts where the intention of the parties relative to the principal object of the
d. void; contract cannot be ascertained.
e. inexistent.
71. The rule which requires that certain agreements or some note or memorandum
thereof, shall be in writing and subscribed by the party charged or by his agent, True or false:
otherwise, such agreements shall be unenforceable:
a. statute of limitations;
 8

a. A third person may determine the performance of an obligation whose s. Payments made by an insolvent person of a debt not yet due and demandable
decision shall be binding upon the contracting parties even if not made known to are rescissible.
any of the parties. t. An action for rescission in rescissible contract is a subsidiary remedy.
b. In case the obligation is transmissible, the heir is liable beyond the value of u. Ratification of a voidable contract does not require the conformity of the
the property he received from the decedent. contracting party who has no right to bring the action for annulment.
c. A mere incidental benefit or interest of a person is sufficient to create a v. Unenforceable contracts can be assailed by third persons.
stipulation pour autrui. w. Void contracts can be ratified.
d. A counter-offer is equivalent an acceptance. x. The defense of illegality of contracts is available to third persons even
e. Acceptance made by letter or telegram binds the offeror from the time it though their interests are not directly affected.
came to his knowledge. y. A contract which is the direct result of a previous illegal contract, is also
f. The object of every contract must be determinate as to its kind or void and inexistent.
determinable without need of a new agreement. z. When one of the parties has brought an action to enforce the instrument, he
g. Mutual error as to the legal effect of an agreement may vitiate consent. cannot subsequently ask for its reformation.
h. A person judicially declared insane may still enter into a valid contract aa. A contract to make a woman borrower a concubine for a certain period of
during his lucid interval; time in case of non-payment of loan is void for it is against good customs.
i. Contract entered into during the state of drunkenness or state of a hypnotic bb. Where one of the parties to an illegal contract is incapable of giving consent,
spell is unenforceable. the contract is voidable and the incapacitated person may recover what he has
j. Mistake as to the identity or qualifications of one of the parties will vitiate given.
consent only when such identity or qualifications have been the principal cause of cc. If an agent is authorized to make an offer on behalf of the principal, the
the contract. authority excludes the authority to receive acceptance of such offer.
k. Reverential fear or the “fear of displeasing persons to whom obedience and dd. A real estate mortgage to secure a loan which appeared in a public document
respect are due” vitiates consent. as pacto de retro sale is valid.
l. Bad bargain coupled with inadequacy of price annuls the contract.
m. Failure to disclose facts constitutes fraud when there is a duty to reveal
them.
n. An expression of opinion by an expert which is relied upon by the other
party does not signify fraud.
o. Misrepresentation by a third person vitiates consent when such
misrepresentation creates substantial mistake and the same is mutual.
p. Misrepresentation made in good faith vitiates consent when there is
substantial error.
q. Failure to state the cause in the contract renders the contract void.
r. Contracts entered into by guardians whenever the wards whom they
represent suffer lesion by more than 20% of the value of the things which are the
object are voidable.
9
10
11
12
13