DE LA SALLE LIPA

College of Business, Economics, Accountancy and Management

Accountancy Department
Second Semester A.Y. 2012-2013
Accounting Review 2
Quiz III Contract of Sales
Name:____________________________________________________________________Date:___________________________
_
Section:__________________________________________________________________Score:___________________________
Direction: Read and solve the following problems. Write the letter of your best answer on the space provided before
each number. Erasures are not allowed and considered wrong.
___1. A buyer ordered 5,000 apples from the seller at Php 20 per apple. The seller delivers 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 accept all 6,000 apples and pay a lesser price for the 1,000 excess apples.
c. He can keep the 6,000 apples without paying for the 1,000 excess since the seller delivered them anyway.
d. He can cancel the whole transaction since the seller violated the terms of their agreement.
___2. X sold to Y 100 sacks of rice that Y was to pick up from Xs rice mill on a particular date. Y did not however appear on the
agreed date to take delivery of the rice. After one week, X automatically rescinded the sale without notarial notice to Y. Is the
rescission valid?
a. Yes, automatic rescission is allowed since having the character of movables and consumables, rice can easily
deteriorate.
b. No, the buyer is entitled to a customary 30-day extension of his obligation to take delivery of the goods.
c. No, since there was no express agreement regarding automatic rescission.
d. No, the seller should first determine that Y was not justified in failing to appear.
___3. X bough a land from Y, paying him cash. Since they were friends, they did not execute any document of sale. After 7
years, the heirs of X asked Y to execute a deed of absolute sale to formalize the verbal sale to their father. Unwilling to do so,
Xs heirs filed an action for specific performance against Y. Will their action prosper?
a. No, after more than 6 years, the action to enforce the verbal agreement has already elapsed.
b. No, since the sale cannot under the Statute of Frauds be enforced.
c. Yes, since X bough the land and paid Y for it.
d. Yes, after full payment, the action became imprescriptible.
___4. A warranty in a contract of sale, whether or not mentioned in it is known as
a. Warranty on quality
b. Warranty against hidden defects c. Warranty against eviction
d. Warranty in merchantability
___5. In a true pacto de retro sale, the title and ownership of the property sold are immediately vested in the vendee de retro

subject only to the resolutory condition of repurchase by the vendor a retro within the stipulated period. This is known as
a. Equitable mortgage
b. Conventional redemption
c. Legal redemption
d. Equity of redemption
___6. Which of the following statements is not correct?
a. The vendor is bound to deliver the thing sold and its accessions and accessories in the condition in which they were
upon the perfection of the contract.
b. All the fruits of the thing sold shall pertain to the vendor from the day on which the thing is to be delivered.
c. The vendor shall not be bound to deliver the thing sold if the vendee has not paid him the price, or if no period for the
payment has been fixed in the contract.
d. The vendor is bound to transfer the ownership and deliver, as well as warrant the thing which is the object of the sale.
___7. As a rule, which of the following contracts of sale is void?
a. Between two insane persons
c. Between husband and wife
b. Between brother and sister
d. Between pupil and teacher
___8. A and B co-owners of a one hectare rural land. A sold his share to Y. C, an adjoining land owner is interested in buying
he share which A sold to Y. Which of the following is correct?
a. B can redeem what A sold to Y if Y already owns a rural land.
b. B can redeem what A sold to Y even If Y does not own any rural land.
c. As adjoining land-owner C has a superior right to redeem what A sold to Y.
d. C can redeem what A sold to Y whether or not Y already owns a rural land.
___9. A sells to B her car for P300,000 on a sale or return within 10 days after delivery. On the 5 th days after delivery, the car
was lost through fortuitous event. Who bear the loss?
a. A under the principle of res perit domino.
c. Both A and B jointly.
b. B and he must pay the price.
d. No one because the loss was due to fortuitous event.
___10. J is the sole owner of one hectare of land. In need of money, she sold of the land without specifying which portion she
is selling to H. In this case, the sale is
a. Void, because co-ownership is discouraged by law
b. Void, because the part is not determinate
c. Valid, only if H has paid the purchase price

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d. Valid as the sole owner of a thing may sell an undivided interest therein
___11. E owns a piece of land and sells it to S with a right of repurchase within 4 years from the date of sale. If S sells the
property to T. Which of the following is not correct?
a. The sale is valid because things subject to resolutory condition may be the object of a contract of sale
b. E can still exercise her right of redemption against T
c. The sale is void because it is conditional sale
d. T acquires the property but subject to the right of conventional redemption
___12. In which of the following cases will delivery transfers ownership over the thing sold?
a. In case of express reservation by the seller until certain conditions have been fulfilled, particularly the full payment of
the purchase price.
b. In case of implied reservation of title as when goods are delivered to the order of the seller or his agent.
c. In sale or approval, or on trial or on satisfaction.
d. In sale or return within seven days.
___13. A owns a piece of land and sells it to B with a right of repurchase within one year from the date of sale. Can B sell the
land he purchased from A, to C, a third party?
a. Yes provided the sale is with the consent of A.
b. No, B is not yet the absolute owner of the land.
c. Yes, but A can still redeem the land from C.
d. No, third parties that acquire real property are bound by prior contracts affecting such property even if the third
person is not a party thereto.
___14. When goods are delivered to the buyer on sale or return for a period of seven days, ownership of the goods passes to
the buyer
a. Upon perfection of the contract
c. Upon expiration of seven days
b. Upon delivery of the goods
d. Upon acceptance by the buyer of the offer of the seller
___15. In case of foreclosure of the personal property mortgaged, where such thing was previously sold to the buyer on an
installment basis and the proceeds of the sale at public auction is less than the principal obligation, can the seller recover the
deficiency from the buyer?
I. No, the seller is not entitled to recover the deficiency from the buyer.
II. Yes, if there is stipulation to that effect in the contract of sale with mortgage.
a. True, True
b. True, False
c. False, True
d. False, False
___16. I. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who
may have first taken possession thereof in good faith.
II. The vendor is responsible to the vendee for any hidden fault or defects in the thing sold, even though he was not
aware thereof.
a. True, True
b. True, False
c. False, True
d. False, False
___17. A, B and C are co-owners of a parcel of land, A sold his 1/3 share on Sept. 1,2011, B his 1/3 share on Sept. 12,2011 and
C his 1/3 share on Sept. 25,2011, all to D and with the right of repurchase. Which of the following is correct? A may redeem
a. The entire property from D if he is required by D to do so.
b. The entire property even if D allows him to redeem 1/3 share only.
c. His 1/3 share even if D requires him to redeem the whole property.
d. His 1/3 share if D allows him to do so.
___18. A owns a parcel of land, which he sells to B with a 3-year redemption period. After the second year, A dies, leaving his
children, C, D and E as his heirs. Which of the following is not correct?
a. As A can repurchase the whole thing, so any among C, D and E may repurchase the whole thing.
b. C can redeem his 1/3 share, D his 1/3 share and E his 1/3 share if B does not require all of them or any one of them
to redeem the whole property.
c. B may demand that all the co-heirs to come to an agreement upon the repurchase of the whole thing sold.
d. B cannot be compelled to consent to a partial redemption.
___19. Which of the following may not be the object of a contract of sale?
a. Thing having a potential existence
c. Future inheritance
b. The sale of hope or expectance
d. Things subject to a resolutory condition
___20. This shall take place when the vendor reserves the right to repurchase the thing sold.
a. Policitacion
c. Equitable mortgage
b. Conventional redemption
d. Legal redemption
___21. A sold his piano to B for P200,000 payable in installment. A chattel mortgage was constituted on the piano. B defaulted in
two installment payments. A demanded payment of the unpaid obligation amounting to P120,000 and a writ of attachment was
issued and the piano was sold for P100,000. Can A still recover the deficiency?
I. No, the foreclosure of the piano extinguished Bs obligation.
II. Yes, only if it is stipulated that in case of foreclosure the buyer will pay any deficiency.
a. True, True
b. True, False
c. False, True
d. False, False

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___22. A and B entered into a contract to sell in private writing involving a specific parcel of land for P2M. B paid 50% of the
purchase price, the balance payable in 3 years. A delivered the land to B. What is the effect of the delivery of the land to B?
a. B is the owner because there was delivery already.
b. Bs ownership before it is converted into real ownership must compel A to execute a deed of sale in a public
instrument.
c. The partial payment made B the owner of the land.
d. A is still the owner because the price is not yet totally paid.
___23. Where it is stipulated that the repurchase of the property sold could be made at any time, the repurchase shall be
exercised
a. Within 4 years from the date of contract
b. Within 10 years from the date of the contract
c. After 5 years after the date of the contract
d. Within 6 years from the date of the contract
___24. A seller sold to a buyer a brand new car at a price of P500,000. At the time of sale, the buyer has only P200,000 cash
and his old car with a fair market value of P300,000 which he offered as payment of the purchase price which was accepted by
the seller. What is the nature of the contract?
a. Barter
b. Exchange
c. Sales
d. Partly sales and partly barter
___25. If the thing sold had any hidden fault or defect at the time of the sale and should thereafter be lost by a fortuitous event
but the seller is not aware of the defect, how much can the vendee recover from the vendor, if the selling price on date of sale is
P100,000 and value on date of loss is P60,000?
a. P100,000
b. P60,000
c. P40,000
d. P0
___26. using the same data in number 25, except that the loss is through the he fault of the vendee, how much can the vendee
recover from the vendor?
a. P100,000
b. P60,000
c. P40,000
d. P0
___27. A sold to B his dog with the agreement that delivery shall be after one week from sale and the payment of the price after
two weeks from delivery. If the dog shall produce the offspring, it shall belong to
a. If produced before the sale, it shall pertain to the seller.
b. If the puppy shall exist before the actual delivery, it shall pertain still to the seller.
c. The fruits that shall exist after delivery will only be the ones to pertain to the seller.
d. The fruits after the sale but before the delivery shall pertain to the buyer if so stipulated by the parties to the sale.
___28. I. A contract of sale of vain hope or expectancy is voidable at the option of the buyer and the action for annulment
brought within the prescriptive period provided by law.
II. The sale of a mere hope or expectancy is deemed subject to the condition that the thing will come into existence.
a. False, False
b. True, True
c. True, False
d. False, True
___29. S sold to B his land on January 10,2001. On January 15, an absolute deed of sale was executed and notarized. On
January 20, the sale was registered with the Registry of Deeds. On January 25, B took actual possession of the land by building
a fence thereon. When did B acquire ownership of the land?
a. January 10
b. January 15
c. January 20
d. January 25
___30. S sold to B his car with the agreement to deliver the same one week after the sale on January 10,2001. In this case
a. S may demand within reasonable time from the sale the payment of the price from B.
b. S can demand payment only after he has delivered the car to B.
c. B may demand delivery of the car even before the expiration of the one week period agreed upon once he pays the
price.
d. Payment and delivery shall take place only after one week from sale.
___31. I. The seller must be the owner of the property he sells but his ownership need not exist on perfection but upon delivery
of the thing.
II. A contract of sale may be absolute; conditional, either suspensive or resolutory; or subject to a contingency; or
undivided interest in property, either present or future except future inheritance.
a. False, False
b. True, True
c. True, False
d. False, True
___32. I. B ordered from S a pair of shoes of the kind and style of which S has gone out of stock. It is a contract for a piece of
work.
II. C ordered from S a pair of shoes specially made for C because of the size of his feet. It is a contract for sale.
a. False, False
b. True, True
c. False, True
d. True, False
___33. Which of the following is not a constructive delivery in sale?
a. Tradition longa manu
c. Thing is placed in the control and possession of buyer
b. Traditio constitum possessorium
d. Traditio symbolica
___34. S sold to B his dog without knowledge that the animal was suffering from a disease at the time of the sale. Is the seller
liable for breach of warranty against redhibitory defect of animal?
a. No because the seller was in good faith when he sold the animals
b. Yes if he were aware of the hidden default or defect
c. No because animals unlike things easily can contract some illness
d. Yes and good faith is not a defense to avoid liability

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___35. S sold to B a thing without knowledge that the thing suffered from a hidden defect. The parties agreed on the waiver of
the warranty by the buyer. Is the seller still liable for breach of warranty?
a. No because of the valid waiver of warranty.
b. No but he must return the price to the buyer without damages.
c. Yes because the waiver refers only to liability for damages.
d. Yes if the seller was in bad faith at the time the waiver was made.
___36. S sold to B a thing with waiver of warranty against eviction. Eviction took place subsequently. Is S still liable for breach of
warranty against eviction?
a. No if it were waiver intencionada.
b. No if it were waiver consciente.
c. Yes even if it was waiver intencionada.
d. No provided the seller was in good faith in entering into the contract of waiver of warranty against eviction.
___37. B bought from S a second hand motor vehicle which upon inspection by B had some mechanical troubles. After the sale,
the car broke down due to engine trouble requiring an overhaul of the engine. Is S liable for breach of warranty against hidden
defect?
a. No because the defect was not hidden but apparent upon inspection by B it being a second hand car.
b. Yes, because there was no waiver of warranty against hidden defect.
c. Yes because the seller was in bad faith.
d. No because it was the fault of the buyer in buying a used car.
___38. In which of the following is sale not presumed equitable mortgage?
a. The price of the sale is usually adequate.
b. The vendor remains in possession of the thing sold.
c. The vendor allows the extension of time to repurchase the thing sold.
d. The purchaser retains for himself a part of the purchase price.
___39. S sold to B a car on installment wherein the latter mortgaged the same car as security for the price. Failing to pay the
installments, the mortgage on the car was foreclosed. Is B still liable for any deficiency if the seller fails to recover in the
foreclosure sale?
a. Yes, because it is only in case of pledge is the debtor not liable for any deficiency.
b. Yes if so stipulated upon the parties.
c. No unless agreed upon by the parties.
d. No notwithstanding any stipulation to the contrary.
For numbers 40-48, indicate the status of the contract of sale as:
a. Valid
b. Rescissible
c. Voidable
d. Unenforceable
e. Void
___40. A sold Bs car in his (As) name to C without any authority from B.
___41. A sold Bs car in the name of B without authority from C.
___42. A sold Bs car with authority to sell but sold it in As name.
___43. A sold his land to B verbally.
___44. A, as agent of P with oral authority, sold Ps land in a public instrument in the name of P.
___45. With written authority from his principal, the agent sold verbally the land of the principal.
___46. Without authority from B, A sold the formers land in Bs name.
___47. Without authority from B, A sold the formers house in Bs name.
___48. A, with oral from P, sold the latters house in writing.
___49. A form of delivery which takes place after the seller of the property continues in possession of said property no longer as
owner but as a mere possessor.
a. Traditio constitutum possessorium
c. Traditio brevi-manu
b. Traditio clavis
d. Quasi-traditio
___50. Dacion en pago as distinguished from sale:
a. The object is always existing and specific.
c. There is no pre-existing obligation.
b. There is greater freedom in fixing the price.
d. The cause is the price.
___51. S sold to B his car. There was no fixed date for the performance of their respective obligations. The obligation of S as
vendor is:
a. To wait for the buyer to pay the price before he delivers.
b. To deliver the immediately since the sale has been perfected.
c. To deliver the car after the buyer demands delivery.
d. Rescind the contract for time of performance not fixed.
___52. Three of he following are option money statements pertain to option money. Which is the exception?
a. Given when the contract of sale is perfected.
b. Given when there is no contract of sale, but as a consideration.
c. Given as to bind the offeror in a unilateral promise to buy or sell.
d. Given as a consideration distinct from the price.

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___53. A sold a parcel of land to B. Thereafter, A sold the same land to C who immediately took possession of the land in good
faith. In this case, the proper remedy of B is:
a. Ask for the annulment of the sale of C.
b. File an action in court against C to recover the land.
c. Institute an action for damages against A for breach of contract.
d. File an action for rescission of the sale to C due to the damage suffered by him.
___54. A sold his land to B who began to possess it. Later, C, a stranger, sold the same land to D who in good faith registered
the sale and thus obtained the title in his name. The owner is:
a. D is the owner for he was the first to register in good faith.
b. A remains to be the owner because C had no authority to sell.
c. A is still the owner because B did not register the sale.
d. B is the owner because the owner is his seller and he has taken possession of the land.
___55. A sold to B in a private instrument a parcel of land for P5,000. B now wants A to place the contract in a public instrument
so that B could register the sale with the Registry of Deeds and secure the Transfer Certificate of Title in his name. Decide.
a. A may not be forced or compelled to execute the public instrument since the sale is unenforceable being in private
instrument only.
b. A cannot be required to place the contract in a notarized deed of sale because the contract is void not being in public
instrument.
c. A can be required to execute the public instrument only if B has paid the purchase price.
d. A has the obligation to execute the public instrument because the contract of sale is enforceable.
___56. A bought a car from B who is an insane man, later A sold the same car to C who was in good faith having no knowledge
of the voidable character of the sale. In this case, after delivery:
a. C could acquire title to the thing because his seller A had no ownership to transfer to him because B was insane
person who was not able to give consent to the sale which is void.
b. C cannot acquire title to the thing despite his hood faith because the sale by B to A could be annulled since it is
voidable sale.
c. C acquires good title to the thing as an innocent purchaser for value. His sellers title only voidable which has not
been voided at the time of sale.
d. C acquires title to the thing but the same may be rescinded after the annulment of the sale between A and B.
___57. A bought a pair of shoes from a shoe store and repair shop. It was later discovered, however, that the shoes did not
belong to the store but to a customer who had left the same for repair. Did A acquire good title to the shoes?
a. No because it was sold by the store which is not the owner thereof.
b. No because it is the fault of A in not exercising diligence in buying the shoes as to its real ownership.
c. Yes because it was bought from a store in good faith for value.
d. Yes because the owner of the shoes was precluded from setting up the want of authority of the store in selling the
shoes.
___58. In case of doubt, a sale with a right of repurchase or without a right of repurchased shall be construed as an equitable
mortgage if certain criteria are met. The seller therefore:
a. May ask for the reformation of the instrument.
b. May ask for the annulment of the contract.
c. May ask the court for the declaration of nullity of the contract.
d. Shall be bound to perform his obligation as seller.
___59. On March 1,2006 S sold and delivered to B a television set for P10,000 on sale or return giving B up to March 16,2006
within which to return the television set. On March 16, 2006, the television set was burned through the fault of B. Based on the
foregoing, which of the following statements is incorrect?
a. S does not have to replace the tv set.
b. S must bear the loss since the time for the return of the television set had not yet expired.
c. The ownership of the television set was transferred to B upon delivery to him.
d. B must bear the loss of the television set.
___60. T stole a ring belonging to O. Subsequently, the ring was offered for sale at a public auction where X, who was not aware
that the ring was stolen, bought it. A few weeks later, O saw the ring and recognized it as his. Based on the foregoing
information, which of the following statements is correct?
a. O may recover the ring from X without reimbursing X since O was unlawfully deprived of the ring.
b. O may recover the ring from X but he has to reimburse X since X acquired title to the ring.
c. O may no longer recover the ring even if he is willing tor reimburse X.
d. X did not acquire title to the ring since the auctioneer had no valid title thereto.

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