BUSINESS LAW - OBLIGATIONS

1. A owes B P1M. A proposed to B that C will pay A's debt and he will be released from all
liabilities to him. B and C agreed to the proposal. Later, when B tried to collect from C, he found
out that he was insolvent.
a) A is no longer liable to B despite the insolvency of C unless said was of public
knowledge or known to him when he delegated the debt.
b) A is no longer liable to B even if he had knowledge of C's insolvency provided it is not of
public knowledge;
c) A is no longer liable to B because of the substitution of C in his place if he had no
knowledge of the insolvency despite it being of public knowledge;
d) A is still liable to B because he was the one who proposed to B that C shall substitute
him as debtor
2. Payment must be made in the following, except:
a) If there is a stipulation, then in the place designated
b) If there is no stipulation and the obligation is to give a determinate thing, wherever the
thing might be at the time the obligation was constituted
c) If there is no stipulation and the obligation is to give a generic thing, then at the domicile
of the obligee
d) If there is no stipulation and the obligation is to do, then at the domicile of the debtor
3. D owes C P1M. G is the guarantor. A stranger S paid C the debt of D without the knowledge
of the latter. In this case:
a) If G pays S, the former can demand reimbursement from D;
b) D has no obligation to reimburse S because he paid without the consent of D.
c) If D fails to pay S, the latter can compel G to pay him;
d) S cannot compel G to pay him;
4. Which of the following is not considered as quasi-contract?
a) Negotiorum gestio
b) Reimbursement due the person saved property during fire or storm without the
knowledge of the owner
c) When the third person, without the knowledge of the debtor, pays the debt
d) Solutio indebiti
5. B imports electric fans from China and specifically asks for 220 volt fans. The fans arrived
fully labelled 220 volts and sell them to the public as such. Later, it turned out that the fans has
been mislabelled by the manufacturer and were only good for 110 volts.
a) B is liable because the vendee did not enjoy legal and peaceful possession of the object
of sale.
b) B is liable to the vendee for any hidden defects in the thing sold, even though he was not
aware thereof.
c) B is not liable under the principle of let the buyer beware
d) B is not liable because he was in good faith, and this is shown by specifically asking for
220 volts

6. It presupposes not only that the obligor is able, ready and willing but more so, in the act of
performing his obligation.
a) Bill of exchange
b) Promissory note
c) Tender of payment
d) Obligation to sell
7. A bought biscuits from a grocery store and was hospitalized due to food poisoning as a result
of toxic substance contained in the biscuits sold to retailers by the Ace Foods Inc. A is now suing
the said producer corporation for damages. Decide:
a) Ace Foods Inc is not liable to A because the latter was negligent in eating the biscuit
despite the presence of harmful substance therein.
b) Ace Foods Inc. is liable for damages due to quasi-delicts due to its negligence in the
preparation of the biscuits thus causing damage to A.
c) A must claim damages from the grocery store and not from the producer since the
grocery was the one which sold the poisoned food to A.
d) A has no right to claim for damages from the producer because there was not contract
between them.
8. An action to impugn the acts of a debtor intended to defraud the creditor is
a) accion pauliana
b) accion redhibitoria
c) Accion subrogatoria
d) Accion reivindicatoria
9. The following are the elements of an obligation, except
a) Vinculum
b) Efficient cause
c) Active and passive subjects
d) Prescription
10. The right of the creditor that is enforceable against anybody is, what kind of right?
a) Moral
b) Personal
c) Natural
d) Real
11. A, B and C bound themselves to deliver to X a specific car worth P3M. Due to the fault of A,
the car was lost. In this case
a) X can claim damages from any one of the three for his proportionate part of liability
because the obligation is indivisible
b) Only A is liable for damages although B and C are liable for their respective shares in the
obligation
c) X can claim only from A the whole amount of damages other than the value of the car
d) Since it is solidary liabilities for damages, X can claim the same from any of the three

12. X by mistake delivered to A and B a sum of money which would have been delivered to C
and D. X now demands the return of the same from A and B. The liability of the latter for the
sum of money to which they are not entitled shall be:
a) X has no right to recover as he was negligent in the delivery of the money.
b) A and B shall be liable jointly
c) They are not liable for having received the money in good faith
d) A and B shall be liable solidarily
13. Specific performance may not be possible in this civil obligation
a) A, a painter, obliges himself to paint the portrait of B on January 8,2011
b) C, a farmer, obliges himself to give his only cow to D on February 14, 2011
c) E, a veterinarian, obliges himself to give one of his dogs to F on May 1, 2011
d) G, a registrar of deeds, obliges himself to effect registration of H's parcel of land on June
20, 2011
14. Indivisibility as distinguished from solidarity.
a) Refers to the prestation which constitutes the object of the obligation.
b) Refers to the legal tie or vinculum.
c) Plurality of subject is indivisible.
d) When the obligation is converted into one of indemnity for damages because of breach,
the character of the obligation remains.
15. Jun offered Zo a specific parcel of land at a specific price. Jun gave Zo 60 days within which
to accept. Zo agreed.
a) There can be no withdrawal because there is perfected option contract.
b) Jun may withdraw or increase the price within the 60 day period
c) Within 60 days, Jun cannot withdraw but may increase the price.
d) There cant be no withdrawal because the period is binding.
16. Which of the following is demand necessary to make the debtor in delay in the performance
of his obligation?
a) When the time of performance is of the essence
b) When demand would be useless
c) When the time of performance has been stipulated
d) When the law so provides
17. One of the following is a determinate thing. Which is it?
a) A ring with diamond embellishment
b) A horse
c) A Toyota car with engine no. 12345, body no. 34888 and plate no. JDS 111
d) A cow
18. Culpa aquiliana as distinguished from culpa contractual
a) Proof of the contract and of its breach is sufficient prima facie to warrant recovery
b) The source of liability is the defendant's negligent act or omission itself
c) Proof of due diligence in the selection and supervision of employees is not available as a
defense

d) The negligence of the defendant is merely an incident in the performance of the

obligation
19. A buyer ordered 5,000 apples from the seller at P20 per apple. The seller delivered 6,000
apples. What are the rights and obligations of the buyer?
a) He can accept all 6,000 apples and pay the seller at P20 per apple
b) He can keep the 6,000 apples without paying for the 1,000 excess since the seller
delivered them anyway
c) He can cancel the whole transaction since the seller violated the terms of their
agreement.
d) He can accept all 6,000 apples and pay a lesser price for the 1,000 excess apples
20. Which of the following is a civil obligation?
a) The obligation of a catholic church to hear mass every Sunday.
b) The obligation of a husband and wife to observe fidelity
c) A obliges himself to pay B P10,000 on October 30,2011.
d) C is a debtor of D for P20,000 due on September 30,1995.
21. It is the voluntary administration of the property of another without his consent.
a) Contract
b) Negotiorum Gestio
c) Solutio Indebiti
d) Quasi-delict
22. If the obligor binds himself to perform his obligation "as soon as he shall have obtained a
loan" from a certain bank. This obligation is
a) with a resolutory condition
b) With a term
c) with a period
d) With a suspensive condition
23. A lawful and voluntary act resulting to a benefit, except
a) Solutio indebiti
b) Quasi-contract
c) Quasi-delict
d) Negotiorum gestio
24. The debtor shall lose every right to make use of the period except:
a) When the debtor attempts to abscond
b) When he violates any undertaking in consideration of which the creditor agreed to the
period.
c) When after the obligation has been contracted he becomes insolvent, unless he gives a
guaranty or security for the debt.
d) When he does not furnish a guaranty or security for the debt.
25. Dacion en pago as distinguished from sale
a) There is no pre-existing obligation
b) There is a greater degree of freedom in fixing the price

c) The cause is the price

d) The object exists and is specific
26. If the obligation of the debtor is "I will pay you my debt after I have arrived from abroad." The
obligation is
a) Valid
b) Voidable
c) Unenforceable
d) Void
27. These are acts or omissions of diligence that cause damage to another, there being no
contractual relation between the parties.
a) Culpa criminal
b) Fraud
c) Culpa contractual
d) Quasi-delict
28. When the debtor binds himself to pay when his means permit him to do so is one:
a) With the condition to be fixed by court
b) With the period dependent upon the debtor's will
c) With the resolutory period upon the debtor's will
d) With a condition dependent upon the debtor's will.
29. An obligation subject to the happening of a future and certain event is
a) Obligation with a period
b) Resolutory conditional obligation
c) Suspensive conditional obligation
d) Conditional obligation
30. X has been missing for sometime leaving no one to manage his properties, A and B took
charge of the management thereof. However, due to the fault of A, the properties of X were
damaged. The liability therefore to X for damages shall be:
a) Only A shall be liable
b) Both shall be solidarily liable
c) Both shall be jointly liable
d) They are not liable since X is at fault for having abandoned his properties
31. The following pertains to facultative obligations, except:
a) Choice pertains only to the debtor
b) Comprehends only one object or prestation which is due
c) Not given
d) Fortuitous loss of all prestations will extinguish the obligation
32. A owes B a sum of money evidenced by a promissory note which was prescribed. X, without
the knowledge of A, paid B his debt. Later A reimbursed X for the payment of the latter to B
although he has n obligation to do so. After payment, A now wants to recover his payment to X
on the ground that he was not obliged to reimburse him. Which of the following is correct?

a) A can recover his reimbursement to X to prevent unjust enrichment on X's part at the
expense of A
b) A cannot recover because he has civil obligation to reimburse X for the latter paid his
debt to B
c) A cannot recover because it partakes of a natural obligation
d) A cannot recover since there was reimbursement by mistake
33. In which of the following instances does legal subrogation not apply?
a) When a creditor pays another creditor who is preferred, even without the debtor's
knowledge
b) When, even without the knowledge of the debtor, a person interested in the fulfilment of
the obligation pays, without prejudice to the effects of confusion as to the latter's share.
c) When a third person pays the creditor without the knowledge or against the will of the
debtor and yet entitled to beneficial reimbursement.
d) When the third person, not interested in the obligation, pays with the express or tacit
approval of the debtor
34. In dation in payment, the creditor becomes the owner of the property ceded as payment of
the debts.
In payment by cession, the creditors do not become the owners but are authorized to sell the
properties assigned to them.
a) True, true
b) True, false
c) False, true
d) False, false
35. The obligee has right to enforce the obligation against the obligor in a court of law
a) Natural obligation
b) Civil obligation
c) Social obligation
d) Moral obligation
36. Whenever in an obligation a period is designated, it is presumed to have been established
for the benefit of:
a) The debtor
b) Both the creditor and the debtor
c) The creditor
d) The third party
37. A, B and C are jointly liable to D in the amount of P9,000. D assigns the entire credit to A. In
this case
a) A becomes the new creditor and may demand from B and C P4,500 each
b) As share in the obligation is extinguished because of confusion
c) The obligation is extinguished because of confusion
d) B and C will not be liable to A

38. If one debt is P12,000 and the other is P6,000 and the debtor without making any
application of payment gives P3,000, how should said payment be applied, presuming that both
debts are of the same nature and burden?
a) The payment will be applied equally
b) The payment will be applied proportionately
c) The payment will be applied to the P6,000 debt
d) The payment will be applied to the P12,000 debt
39. The object or subject matter of the obligation
a) Prestation
b) Passive subject
c) Vinculum
d) Active subject
40. When the period is "on or before a date", the debtor has the benefit of the period. This
benefit is lost and the obligation becomes demandable when:
a) The debtor attempts to abscond.
b) The guarantee given by the debtor is not acceptable to the creditor.
c) After contracting the obligation, the creditor suspects the debtor of becoming insolvent.
d) Demand by the creditor could be useless.
41.
In tender of payment and consignation, the refusal without valid reason of the creditor to
accept the payment of the debtors will extinguish the obligation.
The third person who paid the obligation without the knowledge or against the will of the
debtors is still entitled to reimbursement from the debtors to the extent of the latter's benefit.
a) False, true
b) True, true
c) False, false
d) True, false
42. The following except one, are included in civil liability. The exception is
a) Starvation
b) Reparation
c) Restitution
d) Indemnification
43. N, R, and J solidary bound themselves to deliver to S a Honda motorcycle valued at
P60,000. The obligation was not fulfilled through the fault of J. Thereupon, S filed an action on
court against N and the court awarded P72,000 to S representing the value of the motorcycle
plus damages. Which of the following situation is valid?
a) N can refuse to pay the penalty because it should be charged against J, the guilty party.
b) A has to collect P24,000 each from N, R and J to satisfy the court's award of P72,000
c) If N pays S the P72,000, N can collect from R and J P24,000 each.
d) If S succeeds in collecting the P72,000 from N,N in turn can collect from R P20,000 and
from J P32,000.

44. A, B and C solidarily owe solidarily creditors X and Y P30,000. X remitted the entire
obligation in favor of A. The effect is:
a) A can recover from B and C their respective share of the debt.
b) A cannot recover from B and C because remission in his favour extends to the benefit of
B and C.
c) The obligations is not yet extinguished until Y is paid by X his share of the credit.
d) The obligation is not extinguished until A collects from B and C.
45. An obligation based on positive law and gives right to enforce its performance.
a) Legal obligation
b) Moral obligation
c) Natural obligation
d) Civil obligation
46. The officious manager or gestor is liable for any fortuitous event, except:
a) If he has undertaken risky operations which the owner was accustomed to embark upon.
b) If he fails to return the property or business after demand by the owner.
c) If he assumed the management in bad faith.
d) If he has preferred his own interest to that of the owner.
e) None of the above.

47.

Responsibility arising from negligence or culpa in the performance of an obligation is

demandable. Culpa aquiliana is that fault or negligence which results from breach of
contract.
In civil obligation, the fulfilment of the obligation depends solely on the conscience of
the person.
a)
b)
c)
d)

True, true
False, True
True, false
False, false

48. A sold to B the formers horse for P5,000. No date is fixed by the parties for the performance
of their respective obligations. The obligation of A is:
a) To deliver the horse within a reasonable time of two months from the contract date.
b) To deliver the horse upon the payment of B of P5,000.
c) To deliver the horse immediately as there is a perfected contract
d) To rescind the contract as there is not time fixed for the delivery and payment.
49. A owes B P1,000. A, knowing that the debt has prescribed, nevertheless, still pays B. Can A
recover what he voluntarily paid?
Yes, because B has no right to demand the payment effected by A
No, the payment extinguished the natural obligation

a)
b)
c)
d)

False, true
False, false
True, true
True, false

50.

In joint obligation, if one of the debtors is insolvent, the others shall not be liable for the
payment of his share.
A lender can recover the principal of a loan in a usurious contract even if the contract is
void as to the interest.
a)
b)
c)
d)

True, false
False, false
False, True
True, true

51. D1, D2, and D3, obliged themselves jointly to pay C P15,000. To secure the obligation D1
pledged his ring, D2 his T.V., D2 his refrigerator. On the date of maturity D1 paid C P10,000.
Which of the following statements is true?
a) D1 can redeem object 1 and object 2 because they are proportionate to the amount
paid.
b) D1 cannot redeem any of the thing pledged because the indivisibility of the contract of
pledge is not affected by the fact that the obligation is not solidary.
c) D1 can redeem object 1 because the obligation is joint.
d) D1 can redeem any of the object pledged.
52. A borrowed money from B payable on Dec. 10, 2011. If A failed to pay on due date, will A be
in delay?
a) No, because demand has not been made by B
b) Yes, because there stipulation as regards the due date
c) No, if A has the money to pay B
d) Yes, if the obligation is in writing
53. Demand is not needed to put the debtor in default, except:
a) When the parties so stipulate
b) When the time is of the essence
c) When demand would be useless.
d) When the fixing of the time is controlling motive for the establishment of the contract.
54. A and B are solidary debtors of C, D, E and F joint creditors in the amount of P20,000. How
much can C collect from A?
a) C could collect P2,500 from A
b) C could collect the whole P20,000 from A but will in turn give P5,000 each to D, E and F.
c) C could collect P5,000 from A
d) C could collect from A P10,000. C is then obliged to give P2,500 each to D, E and F.

55. Damages awarded to vindicate a right

a) Exemplary
b) Actual
c) Nominal
d) Liquidated
56. There is novation of the obligation if
1. The period for payment is shortened from 5 years to 3 years.
2. The period for payment is extended form 3 years to 5 years.
a) false;true
b) True; true
c) true;false
d) false;false
57. A, B and C executed a promissory note binding themselves to pay P9,000 to X,Y and Z. The
note is now due and demandable. Suppose that C is insolvent, can A and B be held liable for his
share in the obligation?
a) No, only either A and B but not both will be liable.
b) Yes, the debt shall be presumed to be divided into as many equal shares as there are
debtors.
c) Yes, but A and B will be liable proportionately.
d) No, debts are considered distinct from one another.
58. If the obligor binds himself to perform his obligation as soon as "he shall have obtained a
loan" from a certain bank, this obligation is:
a) Suspensive
b) With a term
c) Conditional
d) Resolutory
59. X, who has a savings deposit with Y bank in the sum of P 1M incurs a loan with the said
bank for P .8M which has become due. When X tried to withdraw his deposit, Y bank allowed P .
8M only to be withdrawn, claiming that compensation has extinguished its obligation under the
savings account to the noncurrent amount of Xs debt. X contends that compensation is
improper when one of the debts as here, arises from a contract of deposit. Assuming that the
promissory note of X evidencing the loan does not provide for compensation between the said
loan and the savings deposit, who is incorrect?
a) X is correct because compensation cannot take place when one of the debts arises from
a deposirum, in this case his deposit with Y
b) Y is correct to claim voluntary compensation between itself and X because the
promissory note does not prohibit compensation.
c) Y is correct because the deposit of X is in the nature of loan to the bank and ipso facto
therefore legal compensation is proper
d) Y will be correct only if compensation shall be declared by the courts after due hearing
or by judicial compensation.

60.

In an obligation subject to a suspensive period, if the object is improved by time, the

same inures to the benefit of the creditor.
Culpa aquiliana is that fault which results from breach of contracts.
a)
b)
c)
d)

False, True
True, true
True, false
False, false

61. D obliged himself to give a specific car to C on December 25, 2013, stipulating that D is
liable even if the thing is lost due to fortuitous event, and without the need of a demand. On the
due date, the car got lost due to fortuitous event. Which of the following is correct?
a) Obligation is totally extinguished.
b) C can require another person to deliver a car, expenses chargeable to D.
c) C can compel D to deliver another car.
d) Obligation remains to subsist, but converted into monetary consideration.
62. Damages predetermined beforehand
a) Actual
b) Liquidated
c) Moral
d) Temperate
63.

D oblige to give a specific car to C on Dec. 20, 2006. If on the date stated, D did not
comply with his obligation, the next day he is considered in default without the need of
a demand.
S sold to B a specific car for P10,000. Both parties promise to comply with their
obligation the day after tomorrow. If on the date stated S delivers the car to B, but B is
not ready to comply with his obligation, from thereon he is considered in default without
the need of a demand.
a)
b)
c)
d)

False, True
True, false
False, false
True, true

64. Damages predetermined beforehand

a) Actual
b) Liquidated
c) Moral
d) Temperate

65. When something is received when there is no right to demand it, and it was unduly delivered
thru mistake, the recipient has the duty to return it
a) Negotiorum gestio
b) Quasi-delict
c) Solutio indebiti
d) Quasi-contract
66. If a thing refers to a class, to a genus and cannot be pointed out with particularity.
a) Specific
b) Determinate
c) Generic
d) Indeterminable
67.

A solidary creditor cannot assign his rights without the consent of the others.
Payment made in good faith to any person in possession of the credit shall extinguish
the debtors obligation.
a)
b)
c)
d)

False, false
True, true
False, True
True, false

68. A, B and C borrowed P24, 000 from Y and Z and signed a promissory note dated January
30, 2011, and due within six months. How much can Y collect from A (debtors are solidary while
creditors are joint), on due date
a) 24,000
b) 4,000
c) 8,000
d) 12,000
69. There is quasi-contract with the obligation to reimburse the third person insofar as the
payment has been beneficial to the debtor.
There is legal subrogation and therefore in case the debtor fails to reimburse the third
person, the latter may go after the mortgage, guaranty or penalty.
a) Both are false statements.
b) Both are true.
c) First is true, second is false.
d) First is false, second is true.
70. Cornell obliged himself to give Jeff his motorcycle on January 20, 2014. There was no
delivery until January 30, 2014 when the garage of the motorcycle collapsed due to a strong
typhoon and the motorcycle was totally destroyed. Is Cornell still liable?
a) No, because there was no demand by Jeff to deliver the motorcycle and the specific
object was lost due to fortuitous event. The obligation is extinguished.

b) Yes, because the contract is perfected.

c) Yes, the obligation to deliver the motorcycle is changed to pay the equivalent value
because Cornell is in legal delay.
d) No, even if Cornell was already default, he could plead impossibility of performance.
71. A owes B P20,000 which became due and payable last June 23, 2013. On that date, A
offered B P10,000, the only money he then had, but B refused to accept the payment. A,
thereafter met C, B's 23 year old son, to whom he gave the P10,000 with the request that he
turn the money over to B. The money was stolen while C's possession. How much may B still
recover from A?
a) P15,000
b) P -0c) P10,000
d) P20,000
72. The kind of compensation which arises by way of proved counterclaim in a case is called:
a) Facultative compensation
b) Voluntary compensation
c) Judicial compensation
d) Legal compensation

73.

An obligation to pay P300,000 contracted by X, Y and Z in favor of A, B and C is a

divisible obligation.
In obligations with a penal clause, the penalty shall substitute for damages and the
payments of interest in case of noncompliance.
a)
b)
c)
d)

True, true
False, false
False, True
True, false

74.

Payment made to an incapacitated person is good only up to the extent that he was
benefited or up to the amount that he was able to keep.
In obligations arising from quasi-contracts, consent of the parties is not necessary.
a)
b)
c)
d)

False, True
True, true
True, false
False, false

75. The distinction between conventional subrogation and assignment is that in conventional
subrogation:
a) It is a mere cession of right
b) The debtor's consent is not necessary
c) An obligation is extinguished and another appears
d) The same obligation, without being extinguished, is transferred to another
76. The following are kinds of fruits of an obligations, except
a) Natural
b) Industrial
c) Civil
d) Penal
77. A ordered B, a 10 year old boy to climb a high and slippery mango tree with a promise to
give him part of the fruits. B was seriously injured when he fell while climbing the tree. Is A
liable?
No, because no person shall be responsible for fortuitous events.
Yes, because A was negligent in making the order without taking due care to avoid
reasonable foreseeable injury to B.
a) True, false
b) True, true
c) False, true
d) False, false

78. A, B and C owe W and Y P6000. A, B and C share in the debt at 2:3:5 while W and Y share
in the credit at 1:2. If there is active solidarity, how much can Y collect from B?
a) 4,000
b) 2,000
c) 6,000
d) 1,800
79. A fault or act or omission of care which causes damage to another, there being no preexisting contractual relations between the parties
a) Quasi-delict
b) Negotiorum gestio
c) Quasi-contract
d) Solutio indebiti
80. The consequential damages suffered by the injured person and those suffered by his family
or third person by reason of the act
a) Restitution
b) Starvation
c) Reparation
d) Indemnification

81. A is obliged to give B his only car on September 1, 2006. On the said sate, A did not deliver.
On September 2, 2006, an earthquake completely destroyed his car. Is A still liable?
a) No. The obligation is extinguished, even if the debtor is already in default because the
debtor can plead impossibility of performance.
b) No. Considering that no demand to deliver was made by B and the specific thing was
lost due to fortuitous event, the obligation is extinguished.
c) Yes. The creditor can instead demand for a substitute of equivalent value from the
debtor.
d) Yes. A is already in legal delay, thus the obligation to deliver the lost specific thing is
converted into monetary claim for damages.
82.

D issued a promissory note payable to the order of C with G as the guarantor. The same
note was validly negotiated by C to A, A to B, B to E, then lastly from E to G. The
merger taking place in the person of G extinguishes the principal obligation.
An obligation in money is a divisible obligation.
a)
b)
c)
d)

True, false
False, false
True, true
False, True

83. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for
fraud is void.
If the law or contract does not state the diligence which is to be observed in the
performance of an obligation, that which is expected of a father of a good family shall be
required.
a) True, true
b) False, false
c) False, true
d) True, false
84. The following, except one, are secondary modes of extinguishing obligations. Which is that
exception?
a) Prescription
b) Compromise
c) Death of both parties
d) Changing the object of the obligation with the consent of the parties
85. A, B and C owe W and Y P6000. A, B and C share in the debt at 2:3:5 while W and Y share
in the credit at 1:2. How much can W collect from A?
a) 1,000
b) 667
c) 400
d) 1,200

86.

D owes C P10,000 due on December 25. C owes D P6,000 due on December 25. Ds
obligation is guaranteed by G. On the date if D is insolvent G is liable to C for P10,000,
the latter (G) cannot setup compensation because he is not a principal debtor.
D owes C P10,000 payable on December 25. Later, D, through intimidation, was able to
make C sign a promissory note stating that C is indebted to D for the same amount. In
here, D cannot be acquired to pay P10,000 because he (D) can setup compensation
against C.
a)
b)
c)
d)

False, false
False, True
True, false
True, true

87. Impossible, unlawful, immoral conditions are not valid and not demandable except the
obligations which depend upon them.
Potestative condition to be void must both be suspensive and dependent on the debtor's
will.
a) Both are false.
b) First is true, second is false.
c) First is false, second is true.
d) Both statements are true.
88. Liability for damages arising from fraud is demandable and there can be a waiver of an
action for past fraud.
There can be a waiver of an action for future negligence but not fraud.
a) First is true, second is false
b) Second is true, first is false
c) Both are true
d) Both statements are false
89. Sometimes referred to as condition precedent
a) Resolutory condition
b) Casual condition
c) Suspensive condition
d) Potestative condition
90. I will give you this book provided that if I like to have it back, you will return the same to
me.
a) Combination of A and B.
b) The obligation is void, because the fulfillment depends upon the will of the debtor.
c) The obligation is void, because the fulfillment depends upon the will of the creditor.
d) The obligation is valid because the condition merely causes the loss of rights already
acquired.

91. Source of obligation which is a rule of conduct, just and obligatory, promulgated by
legitimate authorities for common good, benefit and observance.
a) Contracts
b) Law
c) Delict
d) Quasi-contracts
e) Quasi-delict
92. The court determines the amount of damage taking into consideration the price of the thing
and its sentimental value to the injured person
a) Restitution
b) Reparation
c) Indemnification
d) Starvation
93. A owes B P10,000 due on May 27,v 2011. A owes B P8,000 due on May 28, 2011. A obliged
himself to deliver to B a cow valued at P6,000 on May 30, 2011. On may 31, 2011, A paid B
P10,000. If A makes an application of payment,
a) The P10,000 may be applied to the first debt, or to the second debt or to the third debt
b) The P10,000 should be applied to the first debt only
c) The P10,000 should be applied to the second debt only
d) The P10,000 may be applied either to the first debt or to the second debt
94. Debtor's default in real obligation
a) Mora accipiendi
b) Mora solvendi ex-persona
c) Compensatio morae
d) Mora solvendi ex-re
95. Omission of the diligence which is required by the circumstances of person, place and time
a) Ignorance
b) Negligence
c) Insanity
d) Impotence
96. From the time the fruits have been delivered, the creditor shall acquire
a) Personal right
b) Moral right
c) Inchoate right
d) Real right
97. A and B promise to deliver a particular car valued at P100,000 to C on or before September
15,2000. September 15, 2000 came and upon demand by C from delivery from A and B, A was
willing to deliver but B refused to deliver. In the case at bar:
a) B shall be liable for P50,000 without damages and A shall be liable for P50,000
damages.
b) C can demand delivery of the car from A or B.

c) Both A and B shall be liable for P50,000 each with damages.

d) An action for specific performance will lie against both A and B.
98. The delivery and transmission of ownership of thing by the debtor to the creditor as an
accepted equivalent performance of an obligation is called:
a) Consignation
b) Remission
c) Dacion en pago
d) Payment by cession
99. Unless the law or the stipulation of the parties requires another standard of care, the
obligation to give a thing carries with it the obligation to take care of it with:
a) Diligence of a good father of a family
b) Diligence of a good family of a father
c) Extra-ordinary diligence
d) Degree of care agreed upon by the parties
100. In an obligation worded as follows: I promise to continue allowing X to stay in my condo
unit until he marries, the obligation is subject to:
a) Resolutory condition
b) Suspensive condition
c) Resolutory period
d) Suspensive period
101.

No person shall be responsible for events which could not be foreseen, or which, though
foreseen, were inevitable.
The condition not to do an impossible thing shall render the obligation demandable at
once.
a)
b)
c)
d)

False, false
True, false
False, True
True, true

102. A bound himself to sell to B his house and lot which was being rented by another person, if
B passes the CPA examination. Luckily for B, he passed the said examination. However, A sold
the said property to C after the agreement was entered into by A and B. Was the sale valid.
a) The same was not valid if the buyer was aware of the promise to sell of A to B
b) It was a valid sale because A was still the owner of the house and lot and at the time of
the sale but with resolutory condition
c) It was a valid sale if the buyer was in good faith and for value and without knowledge of
the promise to sell of A to B
d) The sale was not valid because the property was already sold by A to B although it was
subject to a suspensive condition

103. On August 1, 2016, A obliged himself to give his only dog to B if B will pass the October
2016 CPA Examination. If the CPA examination was held on October 10, 11, 17 and 18 and the
results were released on October 19, 2016 and B passed and took his oath on November 20,
2016, if A delivered the dog and the puppy on October 20, 2016, which of the following
statements is correct?
a) B can sell the dog and the puppy
b) A can recover the dog but not the puppy
c) A can recover the puppy but not the dog
d) B acquired real right over the dog and the puppy
104. The following are the requisites of an obligation, except
a) Demand
b) Efficient cause
c) Prestation
d) Passive and active subjects
105. Tort or culpa acquiliana is
a) Quasi-delict
b) Quasi-contract
c) Solutio indebiti
d) Negotiorum gestio
106. Damages awarded to set an example
a) Nominal
b) Liquidated
c) Exemplary
d) Moral
107. Elly is obliged to give Berry, either a ring worth P5,000; or bracelet worth P4,500; or a
watch worth P4,000. All the objects were lost due to Ellly's fault in the order stated.
a) Elly's obligation is to pay the value of the watch plus damages
b) Elly's obligation is extinguished
c) Berry's right is to demand the value of any of the objects plus damages
d) Elly's obligation is to pay the value of the ring plus damages
108. On September 21, 2013, Ping agreed to sell his only carabao to Sam and Sam agreed to
pay the price of P25,000 if Sam will pass the October 2013 CPA Examination. The list of
successful examinees was released on October 21, 2013 and Sam is one of those who passed
the examination. As a result,
a) Sam is entitled to the carabao beginning September 21, 2013 and to its fruits beginning
October 21, 2013
b) Ping is entitled to the P25,000 price plus interest beginning September 21, 2013
c) Sam is entitled to the carabao and its fruits beginning September 21, 2013
d) Ping shall deliver the fruits of the carabao and Sam shall pay the interest on the price
beginning September 21, 2013

109. Not a ground for damages:

a) Culpa
b) Dolo causante
c) Bad faith
d) Mora
110. If the creditor, to whom tender of payment has been made, refuses without just cause to
accept it, the debtor shall be released from responsibility by:
a) Assignment of property
b) Condonation
c) Adjudication or dacion en pago
d) Consignation of the thing or sum due
111. They give a right of action to compel their performance
a) Social obligation
b) Moral obligation
c) Civil obligation
d) Natural obligation
112.

The concurrence of two or more debtors and two or more creditors in the same
obligation is presumed to be a solidary obligation.
Prescription is the extinguishment of an obligation by the passage of time.
a)
b)
c)
d)

True, false
False, True
False, false
True, true

113. A is obliged to deliver his only car to B on November 20, 2011. If A dies and not delivered,
and on November 22, 2011, a typhoon destroys the car, which is correct?
a) A's obligation is converted into a monetary obligation
b) A is liable because he is in delay
c) A is not liable because the obligation is extinguished
d) A and B will divide the loss equally
114. Spontaneous products of the soil and the offspring and other products of animals
a) Civil
b) Industrial
c) Natural
d) Penal
115. The obligation is demandable on the date of the obligation and shall continue to be in force
up to the arrival of the day certain
a) Indefinite period
b) Suspensive period

c) Resolutory period
d) Legal period
116. A-1 and A-2 are solidary debtors of B-1, B-2 and B-3, joint creditors in the amount of
P90,000. How much can B-3 collect from A-2?
a) B-3 could collect P30,000 from A-2
b) B-3 could collect P90,000 from A-2 and give P30,000, each to B-1 and B-2
c) B-3 could collect P15,000 from A-2 and P13,000 from A-1.
d) B-3 could collect P45,000 from A-2 and give P13,000, each to B-1 and B-2
117. Where demand by the creditor shall be necessary in order that delay may exist
a) When the obligor requested for an extension of time
b) When demand would be useless
c) When time is of the essence of the contract
d) When the obligor has expressly acknowledged that he is in default
118.

Every person obliged to give something is also obliged to take care of it with the proper
diligence of a good father of a family.
Obligation for whose fulfilment a day certain has been fixed shall be demandable only
when that day comes. Obligation with resolutory period takes effect at once, but
terminates upon arrival of the day certain.
a)
b)
c)
d)

True, true
True, false
False, false
False, True

119. The loss or deterioration of the thing intended as a substitute through the negligence of the
obligor does not render him liable.
A person alternatively bound by different prestation shall completely perform one of
them.
a) False, true
b) True, true
c) false, false
d) True, false
120. The buyer has the right to the fruit of the thing from:
a) The time the thing is delivered
b) The time the obligation to deliver the thing arises
c) The time the contract is perfected
d) The time the fruits are delivered
121. When the obligation is extinguished because of the passage of time, this is:
a) Rescission
b) Fulfilment of resolutory condition

c) Arrival of resolutory condition

d) Prescription
122. A judicial relation known as Negotiorum Gestio takes place.
a) When a person voluntarily takes charge of anothers abandoned business or property
without the owners consent.
b) When a person is appointed by a court to take the property or business of another.
c) None of the above.
d) When something is received and there is no right to demand it and it was delivered
through mistake.
123. A bound himself to deliver a TV set, Sony with serial no. wem-35 to B which latter found in
the formers store and to repair the piano of B. A did none of this things. May A be compelled to
perform these obligations of his?
a) In both instances he cannot be compelled
b) As regards the TV set he can be, with the repair of the piano he cannot be compelled
c) In both instances he can be
d) As regards the piano he can be, but with respect to the TV set he cannot be compelled
124. Katie is a thief who is under obligation now to return the car to the owner of Tom. The car
was lost through an accidental fire. The obligation will
a) Be extinguished because an accidental fire is always a fortuitous event.
b) Not be extinguished because the obligation proceeds from a criminal offense hence
Katie will still have to pay the price of the car.
c) Be extinguished because not all persons can avail of the remedies provided by law
d) Be extinguished because the value of the car will be converted into the number of days
Katie will serve in prison.
125. Which of the following obligations is not subject to a period?
a) Payable when my means permits me to
b) Payable soonest
c) Payable little by little
d) Payable whenever I like it
126. In novation, which of the following is incorrect?
a) If the original obligation is subject to a suspensive condition, the new obligation is not
subject to the same condition unless stated
b) If the new obligation is void, original obligation shall subsist.
c) In expromission, the insolvency of the new debtor shall not revive the action of the
creditor against the original debtor.
d) While if the condition is resolutory, the new is also resolutory condition, unless otherwise
stated.
127.

If a person obliged to do something fails to do it, the same shall be executed at his cost
Those who in the performance of their obligations are guilty of fraud, negligence or delay
and those who in any manner contravene the tenor thereof, are liable for damages.

a)
b)
c)
d)

False, true
False, false
True, true
True, false

128. A is obliged to give his ring to B on October 30,2013. However, on August 1,2013, B
borrowed the ring of A with an agreement that B will return the ring on September 30,2013. On
September 30,2013, A demanded the return of the ring but B refused claiming compensation,
which of the following is correct?
a) Either A or B can claim compensation
b) A is entitled to claim compensation
c) A may oppose the compensation being claimed by B
d) B is entitled to claim compensation
129.

When the condition have for their purpose the extinguishment of an obligation to give,
the parties, upon the fulfilment of said conditions, shall return to each other what they
have received.
A person can assume an obligation in favour of another even without any contractual
relationship.
a)
b)
c)
d)

True, false
False, false
True, true
False, True

130.

Obligations arising from contracts have the force of law between the contracting parties
and should be complied with in good faith.
Just before the obligation became due and demandable, the debtor proposed to the
creditor that he would give him a specific car instead of paying P150,0000, and which
proposal was accepted by the creditor. Here, there is extinguishment of an obligation by
way of dacion en pago.
a)
b)
c)
d)

False, false
True, false
False, True
True, true

131.

Debtor obliges himself to pay Creditor P500,000 on or before December 31, 2013 on
demand. In this case the period is established for the benefit of the debtor.
In case an extraordinary inflation or deflation of the currency stipulated should

supervene, the value of the currency at the time of the maturity of the obligation shall be
the basis of payment.
a)
b)
c)
d)

False, True
False, false
True, true
True, false

132. X and Y are solidary debtors of A, B, C and D, joint creditors to the amount of P8,000. How
much can A collect from X?
a) A could recover P2,000 only from X.
b) A could recover P8,000 from X. A, in turn does not have to give to B, C and D P2,000
each.
c) A could recover P4,000 only from X.
d) A could recover P8,000 from X. A, in turn has to give to B, C and D P2,000 each.
133. A, B, and C executed a promissory note in favor of D, E, and F in the amount of P
9,000.00. The obligation is mixed solidarity can one of the creditors demand payment of the
whole debt from anyone of the debtors?
a) No, because despite solidarity, a debtors is liable only for his share.
b) Yes, provided all of them demand from all of the debtors.
c) No, because the debts are distinct and separate from one another.
d) Yes, because it is as if there is only one obligation.
134.

When the debtor binds himself to pay when his means permit him to do so, the
obligation shall be deemed to be conditional.
D obliged himself to give C P1,000,000 if the latter would not kill X, a third person. In
this case, both the condition as well as the obligation is void.
a)
b)
c)
d)

True, true
False, false
True, false
False, True

135. A owes B P10,000. C pays B P5,000. Now B and C are the creditors of A to the amount of
P5,000 each. Suppose A has only P5,000. Which is correct?
a) C should be preferred
b) A may choose whom to pay
c) B should be preferred
d) B and C should divide the P5,000 equally
136. S owns an oil painting. Being in need of money, S sold the painting to B for P1,000. After
the sale S discovered that the painting was valuable and worth P5,000.
a) S may annul the contract on ground of error

b) S may rescind the contract on ground of lesion or inadequacy cause.

c) B is entitle to the benefit of the contract because it is valid and binding.
d) S may annul the contract on ground of fraud
137. A possessor of a thing not as an owner, becomes the possessor as owner
a) Traditio constitutom possessorium
b) Traditio simbolica
c) Traditio brevi-manu
d) Traditio longa-manu
138. D obliged himself to give C 100 cavans of rice on December 25, 2013. On said date, D
failed to make delivery, despite repeated demands from C.
a) D can rescind the contract because the object is indeterminate
b) C may ask a third person to deliver 100 cavans of rice to him, the value recoverable from
D plus damages
c) C can compel D to deliver 100 cavans of rice plus damages
d) C has no remedy under the law
139. There is delivery by mere consent or the pointing out of the object
a) Traditio brevi-manu
b) Traditio simbolica
c) Ttraditio constitutom possessorium
d) Traditio longa-manu
140. On August 1, 2010, A obliged himself to give his only dog to B if B will pass the October
2010 CPA Examination. If the CPA examination was held on October 10, 11, 17 and 18 and the
results were released on October 19, 2010 and B passed and took his oath on November 20,
2010, if the dog gave birth to a puppy on October 18, 2010, which of the following statements is
correct?
a) B is entitled to the puppy because the condition has been fulfilled and such shall retroact
to the day of constitution of the obligation
b) B may demand from A the value of the puppy and damages if A refuses to give the
puppy
c) A shall pay damages to B if A shall appropriate the puppy
d) A is entitled to the puppy because in unilateral obligations, the debtor shall appropriate
the fruits.
141. A passenger on a truck was hurt but in a criminal case against the driver, said driver was
acquitted. The victim now sues the owner of the truck for culpa contractual. May the suit still
prosper?
a) Yes, provided he can prove the negligence of the driver
b) Yes, it is sufficient for him to prove the existence of the contract of carriage and the
injuries suffered
c) No, this will constitute double jeopardy
d) No, the acquittal means that the guilt of the accused was not proven by proof beyond
reasonable doubt

142.