ObliCon Compre1

Lyceum of the Philippines University
College of Business Administration
Accountancy and Management Accounting Department
OBLIGATIONS AND CONTRACTS
COMPREHENSIVE EXAMINATION 1
Instructions: Choose the letter which corresponds to the best answer. If none is applicable, choose E.
For Numbers 1 – 5, the following data are given to you for evaluation:
On January 1, 20xx, Mr. Bulbasaur was employed as a professional driver of Ivysaur Transit Bus
owned by Mr. Venusaur. On January 6, in the course of his work, Mr. Bulbasaur hit a concrete post
causing serious injury to passenger Ms. Charmander and pedestrian Mr. Charmeleon. The victims sued
Mr. Bulbasaur and Mr. Venusaur for damages. Mr. Charizard was a witness to this incident.
Caught in the heavy traffic flow, was the car of Ms. Squirtle, wife, who was about to deliver a
child. Her parents, Mr. and Mrs. Blastoise were the ones who brought her to the hospital. Mr. Wartortle
is the husband of Ms. Squirtle.
In a street nearby, Caterpie obliged himself to deliver to Metapod the following:

A. 2008 Sing-It Yamaha Organ
B. Malagona passenger jeepney with engine No. 69 and chasis No. 88.
On the same day, Butterfree was looking for food and a place to rest. He found a tree nearby
and wanted to eat its fruits. Butterfree ordered Weedle, a 10-year-old boy, to climb the high and
slippery mango tree with a promise to give him part of the fruits. Weedle was seriously injured when he
fell while climbing the tree.
Just around the corner of the incident, Kakuna obtained a loan from Beedrill bank. The loan was
embodied in several promissory notes. As security, Kakuna the borrower executed a chattel mortgage
on his standing crops. Said crops were however subsequently destroyed by typhoon “Pidgey” the next
month.
1. Based on the data above, which of the following statements is correct?
A. The guilt of driver Mr. Bulbasaur must be established beyond reasonable doubt to make Mr.
Venusaur the owner liable.
B. The liability of Mr. Venusaur shall cease if the driver is acquitted in the criminal case.
C. The conviction of Mr. Bulbasaur in a criminal case makes the owner liable for damages arising
from criminal act.
D. Mr. Venusaur is not liable if he can prove that he exercised diligence of a good father of a family
in the selection and supervision of his employees.
2. Upon successful labor of Ms. Squirtle, who should pay the expenses for medical attendance?
I. Mr. Wartortle, husband, because it is his duty to support his wife and support includes medical
attendance.
II. Mr. and Mrs. Blastoise, parents, because they were the persons who brought the wife to the hospital.
A. Both statements are correct.

B. Both statements are incorrect.
C. Only the first is correct.
D. Only the second is correct.
3. Based on the data above, evaluate the following statements.
I. In case Caterpie failed to deliver a 2008 Yamaha Organ, the court may compel Caterpie to deliver a
2008 Yamaha Organ plus damages.
II. In case Caterpie failed to deliver the jeepney, the court may compel Caterpie to deliver the jeepney
plus damages.
A. True, true B. True, false C. False, true D. False, false
4. Based on the data above, is Butterfree liable?
I. No, because no person shall be responsible for fortuitous events and this includes the case of Weedle.
II. Yes, because Butterfree was negligent in making the order without taking due care to avoid a
reasonable foreseeable injury to Weedle.
5. Is Kakuna still liable for the loan despite the destruction of the crops by a fortuitous event?
I. Yes, the obligation of Kakuna was to deliver a generic thing – money.

II. No, the obligation was to deliver determinate things – the standing crops.
6. If one party was mistaken and the other acted fraudulently or inequitably in such a way that the
instrument does not show their true intention:
I. The former may ask for reformation.

II. The latter may ask for reformation.
III. Either the former or the latter may ask for reformation.
IV. The former may ask for annulment.
A. One of the statements is correct.
B. Two of the statements are correct.
C. Three of the statements are correct.
D. All of the statements are correct.
7. The process of intentionally deceiving others by producing the appearance of a contract that really
does not exist.
A. Absolute B. Relative C. Fraud D. Misrepresentation

Simulation Simulation
8. Pidgeotto is obliged to give Pidgeot either objects No. 1 or No. 2 or No. 3 at Pidgeot’s option. Before
Pidgeot communicated his choice to Pidgeotto, object No. 1 had been destroyed thru Pidgeotto’s fault
and object No. 2 had been destroyed by a fortuitous event. Pidgeot may?
A. Demand object No. 3 only as it is still available.

B. Demand the price of object No. 1 only plus damages because it was destroyed by Pidgeotto’s
fault.
C. Demand the value of object No. 2 as the right of choice belongs to Pidgeot.
D. Demand either object No. 3 or the price of object No. 1 plus damages.
9. Rattata owns a house rented by Raticate. Rattata sold the house to Spearow where Spearow agreed to
pay the balance of the purchase price as soon as Raticate leaves the premises. It was further agreed that
Spearow will take care of seeing to it that Raticate vacates the house. Which of the following is correct?
A. The contract is void because it is potestative on the part of C.

B. The contract is void because the consent of Raticate was not obtained.
C. The contract is valid because the condition is mixed.
D. The contract is valid if Raticate is willing to vacate the premises.
10. Compensation cannot take place except:
A. When one debt arises from the obligations of a deposit.

B. When one debt arises from the obligations of a bailee in commodatum.
C. When one debt arises because of a claim for support due to gratuitous title.
D. When one debt arises from a bank deposit.
On January 11, 20xx, Fearow borrowed P100,000 from Ekans. The loan was secured by a mortgage
of Fearow’s land in favor of Ekans. Without the knowledge of Fearow, Arbok paid Ekans the sum of
P100,000 for Fearow’s debt.
In a nearby café, Pikachu sold a half-interest in his specific car to Raichu. It was agreed that the
price to be paid by Raichu would be used in installing a new engine on the car. On February 14, the car
was destroyed by a fortuitous event.
In a dark alley outside the café, Sandshrew is in need of sustenance for his family. He commits the
crime of theft on one of the parked cars when no one was looking. On January 31, after being exposed of
his actions, he is asked to return the car to its owner Sandslash.
After hearing the news about the stolen car in the television, Ms. Nidoran remembered that she
is obliged to give Ms. Nidorina her specific car on December 31, 20xx. Time passed and it was December
31 yet there was no delivery by her. On January 4 the following year, the garage of the car collapsed due
to heavy rains and strong winds of Typhoon “Nidoqueen” and the car was totally destroyed.
Mr. Nidoran on the other hand deposited with Mr. Nidorino 100 cavans of palay valued at
P10,000. Mr. Nidoran however is indebted to Mr. Nidorino for P10,000, which is already due. When Mr.
Nidoran is subsequently withdrawing the palay, Mr. Nidorino refuses to deliver, claiming compensation.
11. As a result of Arbok’s transaction with Ekans,
A. Arbok may foreclose the mortgage on Fearow’s land if Fearow cannot pay.
B. Arbok cannot claim reimbursement from Fearow inasmuch as the payment was made without
the knowledge of Fearow.
C. Arbok can recover the amount from Ekans in case Fearow refuses to reimburse Arbok.
D. The obligation of Fearow to Ekans was extinguished but Fearow should reimburse Arbok the
amount of P100,000 because he was benefited by the payment.
12. Is Raichu’s obligation to pay the price extinguished?
I. Yes, there is no more use of installing a new engine since the car has already been destroyed by a
fortuitous event.
II. No, Raichu must still pay because his obligation to pay is generic.
13. If before the car is delivered to Sandslash it is destroyed by a fortuitous event, is Sandshrew’s liability
extinguished? If Sandshrew had previously asked the owner to accept the car, but the owner without
any justifiable reason, refuses to accept the car, and it is destroyed by a fortuitous event. Is Sandshrew’s
liability extinguished?
A. Yes, yes B. No, yes C. Yes, no D. No, no
14. Based on the data above, is Ms. Nidoran still liable?
A. No, even if Ms. Nidoran was in default, she could plead impossibility of performance.
B. Yes, because the contract is perfected.
C. No, because there was no demand by Ms. Nidorina to deliver the car.
D. Yes, the obligation to deliver the car is changed to pay the equivalent value because Ms. Nidorina
is in legal delay.
15. Based on the data above, is Mr. Nidorino correct?
A. Yes, both obligations are due.

B. Yes, considering that the value of the palay is equal to the amount of Mr. Nidoran’s obligation.
C. No, because there was no stipulation allowing compensation.
D. No, because Mr. Nidorino’s obligation arose from a contract of deposit.
On January 21, 20xx, Nidoking owes Clefairy two debts both of which are already due. The first
debt is secured by a mortgage, the second is not. Nidoking tells Clefairy that the payment he is now
making should be applied to the second debt instead of the first.
Clefable, Clefairy’s older sister, has a P10,000 savings deposit with Vulpix Bank. One day,
Clefable borrowed P2,000 from the bank. On maturity of the loan, without seeking permission from
Clefable, Vulpix Bank subtracted the P2,000 from Clefable’s account.
Ninetails, one of Vulpix Bank’s managers, asked Jigglypuff to keep P10,000 for him. Later,
Ninetails borrowed P4,000 from Jigglypuff. When Ninetails asked for the return of his money, Jigglypuff
gives him only P6,000 alleging partial compensation.
Wigglytuff, Jigglypuff’s older sister, owes Zubat P10,000. Golbat in behalf of Wigglytuff, pays
Zubat P10,000 against the consent of Wigglytuff, although Golbat had previously told Wigglytuff that he
(Golbat) did not intend to be reimbursed. Nevertheless, Zubat accepted the payment by Golbat in behalf
of Wigglytuff.
Oddish owes Gloom P10,000, guaranteed by Vileplume. Gloom assign her credit to Paras, her
boyfriend. Paras assigns the credit to Parasect, his brother. Parasect assigns the credit to Oddish, his
girlfriend.
Venonat, Vileplume’s cousin, owes Venomoth P10,000 guranteed by Diglett her boyfriend.
Venomoth assigns her credit to Dugtrio. Dugtrio assigns his credit to Meowth. Meowth assigns his credit
to Diglett, his best friend who is also the guarantor.
Persian, Meowth’s older brother, has two creditors, Psyduck and Golduck. Psyduck is a
mortgage creditor for P20,000, and Golduck is an ordinary creditor for P10,000. Golduck paid Persian’s
debt of P20,000 to Psyduck.
16. Based on the data above, which is correct?
A. Clefairy may refuse such application on the ground that the first debt is more burdensome to the
debtor.
B. Clefairy may refuse such application because the payment shall be applied proportionately.
C. Clefairy cannot refuse the application because the preference of the debtor must be followed.
D. Clefairy cannot refuse the application if the first debt is “older” than the second.
17. Is the action of Vulpix Bank proper? Is Jigglypuff’s action correct?
A. Yes, yes B. No, yes C. Yes, no D. No, no
I. Wigglytuff’s obligation towards Zubat is extinguished.

II. Golbat may still recover from Wigglytuff because Wigglytuff did not consent to what the law deems a
donation on the part of Golbat in favor of Wigglytuff.
I. Oddish’s obligation is extinguished and Vileplume is released from her obligation as guarantor.
II. Venonat’s obligation is extinguished and Diglett is released from his obligation as guarantor.
I. If Golduck’s payment is with Persian’s knowledge, Golduck will be subrogated in the rights of Psyduck.
II. If Golduck’s payment is without Persian’s knowledge, Golduck will not be subrogated in the rights of
Psyduck.
21. Mankey and Primeape are jointly liable to deliver a particular car valued at P200,000 to Growlithe on
July 1, 20xx. Evaluate the foregoing statements.
I. The prestation is indivisible making the liability of Mankey and Primeape solidary.
II. If on July 1, 20xx Mankey is willing to deliver the car but Primeape is not, Growlithe may enforce the
obligation against Mankey.
III. Mankey is liable for a proportionate part of the obligation and will be liable also for damages if
Primeape is not ready to comply with his obligation, even if Mankey is willing to deliver the car.
IV. The liability of Mankey and Primeape is joint and that damages may be assessed only against the
debtor who violated the obligation.
22. Arcanine is the owner of shares of stock of Poliwag Bank amounting to P100,000. Later, Arcanine
borrowed money from the bank amounting to P90,000 with interest thereon at 6% per annum. The debt
was to be paid in installments. One of the conditions of the debt contract is that in case of the debtor’s
default in the payment of any of the installments as they become due, the entire amount of the unpaid
balance thereof will become due and payable on demand. The defendant Arcanine defaulted in the
payment of several installments and plaintiff Poliwag Bank brought this action to recover the unpaid
balances. Arcanine pleaded compensation. Which is correct?
A. Arcanine is allowed to avail of compensation.

B. There can be no compensation because Arcanine and Poliwag Bank are not debtors and creditors
of each other.
C. Compensation is allowed only up to P90,000 plus interest.
D. Compensaton is allowed only up to P90,000 without interest.
23. Poliwhirl, Poliwrath and Abra obliged themselves solidarily to give Kadabra a specific car valued at
P240,000. On due date, Kadabra demanded delivery but the debtors failed to deliver. The next day,
while Poliwhirl was still in possession of the car, it was lost due to a fortuitous event. The right of
Kadabra is:
A. To proceed against any of the debtors for the value of the car plus damages.
B. To proceed against Poliwhirl only because the car was lost while in his possession.
C. None because the obligation id extinguished due to a fortuitous event.
D. To proceed against Poliwrath and Abra because they were not in possession of the car when it
was lost due to a fortuitous event.
24. The transfer to a third person of all the rights appertaining to the creditor including the right to
proceed against guarantors, or possession of mortgages, subject to any legal provision or modification
that may be agreed upon.
A. Novation B. Delegacion C. Expromission D. Subrogation
25. Evaluate the following statements.
I. Whoever pays for another may demand from the debtor what he has paid, except that if he paid
without the knowledge or against the will of the debtor he cannot recover anything.
II. The debtor of a thing cannot compel the creditor to receive a different one, although the latter may
be of the same value as, or more valuable than that which is due.
On January 26, 20xx, Alakazam is obliged to give Machop, at Alakazam’s option either object
No.1, object No.2 or object No.3.
26. If all objects were lost thru Alakazam’s fault, which is correct?
A. The value of the first thing lost plus damages must be given to Machop.
B. The value of the last thing lost plus damages must be given to Machop.
C. The value of any of the things lost plus damages must be given to Machop.
D. The obligation is extinguished.
I. If objects No.1 and 2 were destroyed by a fortuitous event and later object No.3 is destroyed by
Alakazam’s fault, Alakazam would still be liable.
II. If objects No.1 and 2 were destroyed by Alakazam’s fault and later object No.3 is lost by a fortuitous
event, Alakazam would still be liable.
28. Machoke, Machamp and Bellsprout are solidary debtors of Weepinbell for P3,000. Weepinbell
remitted Bellsprout’s share since she is a relative. Machoke therefore paid later only P2,000. Machoke
can recover reimbursement, if Machamp is insolvent, from Bellsprout in the amount of:
A. P1,000 B. P1,500 C. P500 D. P0
29. Victreebel, Tentacool and Tentacruel are solidary debtors of Geodude in the amount of P1,000.
Geodude condoned the whole obligation when Victreebel offered to pay. Victreebel can demand
reimbursement from Tentacool in the amount of:
A. P1,000 B. P500 C. P333 D. P0
30. Graveler, Golem and Ponyta are solidary debtors of Rapidash in the amount of P3,000. Ponyta was
incapacitated to give his consent as he was Rapidash’s minor brother. If Rapidash sues Golem, how
much will Golem be liable for?
A. P3,000 B. P2,000 C. P1,000 D. P0

31. Slowpoke forced Slowbro to sign a promissory note where Slowbro promises to pay Slowpoke
P100,000. The correct amount should be P60,000. Which is correct?
A. The contract is rescissible because there is lesion.

B. The contract is unenforceable.
C. Slowpoke cannot demand payment from Slowbro because the contract is voidable.
D. The contract is valid.
32. The principle that contracting parties may establish such stipulations, clauses, terms and conditions
as they deem convenient, provided they are not contrary to law, moral, public policy and public order,
refer to the principle of:
A. Liberty of contract B. Relativity of C. Consensuality of D. Mutuality of

contract contract contract
33. If mistake, fraud, accident or inequitable conduct has prevented a meeting of the minds of the
parties to a contract, the proper remedy is:
A. Ratify the contract

B. Ask for specific performance
C. Annulment of the contract
D. Reformation of the contract
34. Magneton is the guardian of Magnemite, a minor. Magnemite sold his land in writing to Farfetch’d
valued at P1,000,000 for P700,000. The sale is:
A. Rescissible B. Voidable C. Unenforceable D. Void
35. The mortgagor will execute an instrument to transfer the ownership over the property mortgaged to
the mortgagee if the debt is not paid at maturity is:
A. Void B. Voidable C. Valid D. Unenforceable
Doduo, Dodrio and Seel (solidary debtors) borrowed P24,000 from Dewgong and Grimer. They
signed a promissory note dated January 30, 20xx, and the note is due within six months.
Muk was appointed as guardian of Shellder, the latter being 17 years old. Later, without
authority from Muk, Shellder sold Muk’s watch in writing to Cloyster valued at P100,000 for P70,000. He
suffered a lesion by more than ¼ of the value of the thing sold.
Gastly obliged himself to pay Haunter the amount of P30,000 30 days after January 31, 20xx plus
a penalty of P3,000 if he fails to pay the obligation on due date. After demand for payment by Haunter,
Gastly offered to pay on June 30, 20xx.
Gengar and Onix executed a contract on January 12, 20xx where Gengar agreed to sell and Onix
agreed to buy Gengar’s only fighting cock. The agreement provides that the delivery of the cock is to be
made on June 24, 20xx at which time Onix would pay the agreed price of P2,000. On June 9, 20xx,
Gengar sold the same fighting cock to Drowzee. Onix asks for your advice, assuming there is no delivery
yet of the cock to Drowzee.
Hypno offered to sell his watch to Krabby for P1,000. Krabby offered to buy the watch for P800
but it was rejected by Hypno. When Krabby turned to go away, Hypno called him and said he is now
willing to sell the watch for P800.
36. How much can Dewgong collect from Doduo on due date?
A. P12,000 B. P4,000 C. P8,000 D. P24,000
37. The contract by Shellder to Cloyster is:
A. Rescissible B. Voidable C. Unenforceable D. Void
38. Haunter can demand from Gastly:
A. P30,000 plus P3,000 plus legal interest

B. P30,000 plus legal interest
C. P30,000 plus P3,000
D. P30,000 plus P3,000 plus legal interest plus damages
I. Onix may sue for damages, on June 9, 20xx without the need of demanding delivery because it is
useless, the object was sold to a third person acting in good faith.
II. Onix may sue for damages after the arrival of the stipulated period, that is June 24, 20xx because the
right of Onix to sue will only accrue on June 24, 20xx.
A. True, true B. False, false C. True, false D. False, true
40. May Krabby refuse to buy the said watch?
A. No, because Krabby’s offer of P800 was accepted by Hypno
B. No, there is a meeting of the minds between the parties or the subject matter and the cause of
the contract
C. Yes, because Krabby made a counter offer which was rejected by Hypno
D. Yes, because the agreement is under the Statute of Frauds
Kingler offered to sell his house and lot to Voltorb for P2,000,000, who was interested in buying
the same. In his letter, Kingler stated that he was giving Voltorb a period of one month within which to
raise the amount. One week before the expiration of the one month period, Kingler told Voltob that he
is no longer willing to sell the property unless the price is increased to P3,000,000.
Electrode, Voltorb’s big brother, after hearing the incident leased his property to Exeggcute.
Part of the premises was subleased by Exeggcute to Exeggutor, his older brother. Exeggcute violated the
conditions of the lease, so Electrode wanted to rescind the lease contract.
Ms. Cubone, an employee, embezzled a sum of money from her employer, Mr. Hitmonlee. In
order that she would not be prosecuted, her husband Mr. Marowak, signed a promissory note to pay
the amount embezzled, with interest to the victim, Mr. Hitmonlee.
In a contract of sale of Hitmonchan Hardware Store (Construction Materials) it was stipulated

that the seller shall not open or have any interest directly or indirectly in any hardware store either in
his own name or in the name of another or have connection with or be employed in any hardware store
for a period of one year or within three kilometers from Barangay Lickitung.
Koffing insured his residential house for P5,000,000 on January 1, 20xx. On June 30, 20xx
Weezing burned the insured property because of jealousy that Koffing is making moves on his girlfriend
Rhyhorn. Rhydon, Rhyhorn’s big brother quelled the fight between the boys Koffing and Weezing.
41. May Voltorb compel Kingler to accept the P2,000,000 first offered?
A. Yes, because this is an obligation with a period and a period is deemed for the benefit of both
parties.
B. Yes, because the period is deemed for the benefit of Voltorb as it was Kingler who voluntarily
offered the period to Voltorb.
C. No, because the promise to sell had no cause or consideration distinct from the selling price.
D. No, because the increase in the price is 50% and is deemed unconscionable.
I. Electrode can rescind the lease contract provided he respects the sublease.
II. Electrode cannot rescind the lease contract as the sublease would naturally be affected.
III. Electrode may rescind the lease contract and is not bound to respect the sublease.
IV. Exeggcute may object to the cancellation of the contract because he is not a party to the violation.

I. The husband, Mr. Marowak is liable because the note was executed by him voluntarily.
II. The recovery shall be limited only to the amount embezzled without any interest.
III. The employer, Mr. Hitmonlee may recover from the husband, Mr. Marowak and may still prosecute
the employee, Ms. Cubone.
IV. No recovery can be made on the note because the consideration is illicit.

44. Are the stipulations/ restrictions upon the seller Hitmonchan Hardware Store valid?
A. No, the agreement is contrary to public policy as the seller is deprived of a means of livelihood.
B. No, the stipulations are in restraint of trade.
C. Yes, the restrictions imposed are only on a limited scale.
D. Yes, as long as the agreement is made in writing.
I. Koffing can proceed against the insurer and collect the P5,000,000 policy.
II. The insurer shall be subrogated to the rights of Koffing after payment to Koffing.
III. After the payment, the insurer shall have the right to proceed against Weezing.
IV. Koffing should proceed against Weezing, the guilty party and not against the insurer.

Chansey bought a house and lot in Tangela Subdivision subject to the condition that it shall be
used for residential purposes only. The condition was annotated on the certificate of title. Ten years
later, Chansey sold the property to Kangaskhan who converted the same into Horsea Restaurant. The
owner of Tangela Subdivision demanded the closure of Horsea Restaurant but Kangaskhan refused on
the ground that the lot became commercial because of its proximity to some stores and Seadra
Shopping Center in an adjoining subdivision. Furthermore, the lot has been reclassified into commercial
by an ordinance passed by the Goldeen City Council.
Seaking sold to Staryu his cow for P5,000. No date is fixed by the parties for the performance of
their respective obligations. Sometime later, Starmie, minor, visited with her family his Grandpa
Seaking’s farm. Starmie then met Mr. Mime and entered a contract without the consent of her parents.
In said contract, Starmie was supposed to pay to Mr. Mime the sum of P10,000. Mr. Mime did not know
of Starmie’s minority and when Starmie voluntarily paid Mr. Mime the money, Mr. Mime accepted the
sum. Out of this amount, Mr. Mime spent P8,000 for his needs. Soon after, the parents of Starmie, Mr.
Syther and Ms. Jynx, learned of the transaction and brought an action in court to recover the P10,000
paid to Mr. Mime.
Electabuzz sold his land to Magmar. The sale was made orally. Magmar paid the agreed price.
Magmar wanted to have the sale registered but he needs a public instrument. Pinsir, Electabuzz’s
nephew, lost in gambling and as payment executed a promissory note in favor of winner, Tauros. Later,
Tauros assigned the note to Magikarp.
I. Kangaskhan cannot convert the lot into a commercial lot because of the restriction on the certificate
of title.
II. The stipulation between the owner of Tangela Subdivision and Chansey is valid and shall bind
Kangaskhan.
III. Kangaskhan should first ask for the cancellation of the annotation on his certificate of title prohibiting
the use of the lot for purposes other than residential.
IV. The stipulation that the lot shall be used exclusively for residential purposes became ineffective
because of the conversion of the land into commercial by ordinance as a valid exercise of the police
power of the state.

47. The obligation of Seaking is:
A. To deliver the cow immediately as there is a perfected contract.

B. To deliver the cow within the reasonable time from the perfection of the contract.
C. To deliver the cow upon the payment of Staryu of P5,000
D. To rescind the contract as there is no time fixed for the delivery and payment
48. How much can Mr. Scyther and Ms. Jynx, parents of the minor, Starmie recover from Mr. Mime?
A. Nothing B. P10,000 C. P8,000 D. P2,000
I. Magmar may sue Electabuzz for the return of his money as no one shall be unjustly enriched at the
expense of another.
II. Magmar cannot demand the return of the purchase price because the sale is unenforceable.
III. Magmar may compel Electabuzz to execute the public instrument because the sale is valid.
IV. Magmar may only occupy and use the land as buyer in good faith.
50. May Magikarp successfully recover from Pinsir?
A. Yes, if Magikarp is not aware that it is in payment of a gambling debt.

B. No, because Tauros cannot recover, so also cannot the assignee.
C. Yes, because Tauros can recover, so also the assignee can.
D. No, because promissory notes can only be negotiated but not assigned.
Gyarados shipped his cargo in Lapras’s vessel. Lapras and Ditto entered into a contract for Ditto
to unload the cargo from the ship’s hold. In the lifting operations, Gyarados’s cargo was damaged.
Uncle Gyarados was enraged because of what happened to his cargo. Thankfully his cute and
favorite niece heard of what happened and visited him. After staying a week with Uncle Gyarados,
Eevee obtained from Vaporeon a loan for P1,500 with interest at 10% per annum, the payment of which
loan was secured by Jolteon. After the maturity of the loan, Flareon a friend and suitor of Eevee, went to
Vaporeon and paid the latter, without the knowledge of Eevee, P1,400 for said loan and thereupon
Vaporeon signed and delivered to Flareon a receipt of his tenor “Received from Flareon P1,400 in full
payment of Eevee’s obligation in my favor. Sgd. Vaporeon.”
Omastar, the father of Omanyte, was indebted to Porygon in the amount of P1,000,000.
Omastar died without paying the indebtedness. Omanyte inherited from Omastar properties worth only
P400,000. Omanyte paid Porygon the amount of P1,000,000 one month after Omastar’s death.
One of the stipulations contained in the contracts between Kabuto Company and its employees
is that the company shall pay a bonus to any employee of Kabuto Company who shall continue their
employment for at least two consecutive years unless he quits or is discharged before the expiration of
the period of two years. Kabutops, an employee of Kabuto Company was discharged one week before
the completion of the two year period.
51. Which of the following statements is correct?
A. Gyarados may go against Ditto and sue Ditto for damages.

B. Gyarados may go against either Lapras or Ditto and sue for damages.
C. Gyarados may go against both Lapras and Ditto and sue for damages.
D. Gyarados may go against Lapras and sue for damages.
52. Which of the following statements is correct?
A. Flareon may recover from Eevee the amount of the obligation, that is P1,500, because Eevee was
benefited up to P1,500.
B. Flareon may recover from Eevee P1,500 plus interest.
C. Flareon may recover from Eevee P1,400 plus interest.
D. Flareon may recover from Eevee P1,400 without interest.
53. In case Eevee has nothing with which to pay, Flareon may exact from the guarantor, Jolteon:
A. P1,500 B. P1,400 C. P1,400 plus D. Nothing

interest
54. Can Omanyte ask for the refund of what he paid to Porygon?
A. Yes but only up to P600,000.

B. Yes but only up to P400,000.
C. No because the obligation of the father is also the obligation of the heirs under the principle of
relativity of contracts.
D. No because the heir voluntarily paid the debt of the decedent.
I. If Kabutops is discharged with just cause, he is nevertheless entitled to the bonus because when the
company voluntarily impedes the performance of the condition, it will be deemed performed.
II. If Kabutops is discharged without just cause, he is entitled to the bonus because when the debtor
voluntarily prevents the performance of the condition, it is deemed fulfilled.
Aerodactyl delivered her bracelet for Snorlax for Snorlax’s necklace. No written agreement was
signed by the parties. Articuno, Zapdos and Moltres (Aerodactyl’s triplets) are jointly liable to Dratini in
the amount of P9,000. Dratini assigns the entire credit to Articuno.
Dragonair, Dratini’s older brother, owes their oldest brother Dragonite P10,000 due on May 27,
20xx. Dragonair owes Dragonite P8,000 due on May 28, 20xx. Dragonair obliged himself to deliver to
Dragonite his dog valued at P6,000 on May 30, 20xx. On May 31, 20xx, Dragonair paid Dragonite
P10,000.
Mewtwo is indebted to Mew for P100,000. For the purpose of defrauding Mew, Mewtwo sold
his only parcel of land to Ash valued at P100,000. Ash has no knowledge of the intention of Mewtwo.
56. Which of the following is an appropriate description of the contract between Aerodactyl and
Snorlax?
A. Onerous and B. Onerous and C. Bilateral and D. Aleatory and

bilateral innominate innominate nominate
57. In the case of Articuno, Zapdos and Moltres:
I. The obligation is extinguished because of confusion.

II. Zapdos and Moltres will not be liable to Articuno.
III. Articuno becomes the new creditor and may demand from Zapdos and Moltres P4,500 each.
IV. Articuno’s share in the obligation is extinguished because of merger.

58. If Dragonair makes an application of payment:
A. The P10,000 should be applied to the first debt only.

B. The P10,000 should be applied to the second debt only.
C. The P10,000 may be applied either to the first debt or to the second debt.
D. The P10,000 may be applied to the first debt, or to the second debt or to the third debt.
I. The contract between Mewtwo and Ash is binding.

II. The contract is voidable because Mewtwo acted in bad faith.
III. The contract between Mewtwo and Ash is rescissible.
IV. The right of Mew is to rescind the contract because it was intended to defraud him.

60. In order that fraud may make a contract voidable:
A. It may be incidental but both parties should not be in pari delicto.

B. It may be serious and the parties must be in pari delicto.
C. It may be incidental but should have been employed by both contracting parties.
D. It should be serious and should have not been employed by both contracting parties.
61.The buyer has the right to the fruits of the thing from:
A. Time contract of sale is perfected C. Time of delivery
B. Time fruits are delivered D. Time of obligation to deliver it arises
62.Rose obliges herself to give Jack 1 dozen of eggs on January 15, 2003. When the date arrived, Rose
failed to deliver despite repeated demands from Jack. Jack’s remedy is:
A. Rescind the contract.
B. Compel Rose to pay the amount of the eggs.
C. Compel Rose to deliver the eggs plus damages.
D. Ask a 3rd person to deliver the eggs to him but chargeable to Rose.
63. Christine obliged herself to give to Conrad her BMW car on October 10, 2003 but she failed to
deliver on that date. On the following day, a lightning completely destroyed the car.
a. Conrad can demand for a substitute.
b. Christene is not liable even if she is in default.
c. Christene is still liable for she is in default already.
d. Christene is no longer liable there being no demand, there is no delay and the thing is lost
due to fortuitous event.
64. A obliged himself to deliver to B his dog, his cow, his carabao, his elephant or his crocodile and
gave B the right of choice. The first two were lost due to fortuitous event and the last three were
lost due to A’s fault.
a. A may rescind the contract plus damages.
b. Creditor, B may convert to cash any of them plus damages.
c. Creditor, B may convert to cash any of the last three plus damages.
d. Debtor A may convert to cash the value of the last one lost plus damages.
65. 1st Statement: Mr. X waived in advance his right to sue Mr. A, if A will cause him injury due to A’s
negligence. The waiver is void.
nd
2 Statement: Dolo incidente or fraud in the celebration of contacts is a ground to annul the
obligation.
A. B. C. D.
st
1 Statement True True False False
2nd Statement True False True False
66. A obliged himself to deliver to B his 7650 Nokia cellphone or as a substitute he may deliver his
cute kitten. After substitution was made, the former was lost due to A’s fault. A. Obligation was
extinguished.
a. A is liable and must pay damages.
b. The loss has no effect to the obligation.
c. A will simply deliver his cute kitten plus damages for the loss of the cellphone.
67. Debtor’s A, B, C and D are liable to creditors E, F, G and H in the amount of P200,000. Assuming
passive solidarity exists among A, B, C and D, how much can E and F collect from A?
a. P 50,000 C. P150,000
b. P100,000 D. P200,000
68. Debtor’s A, B, C and D are liable to creditors E, F, G and H in the amount of P200,000. If the
obligation is joint, how much can E and F collect from A?
a. P12,500 C. P 50,000
b. P25,000 D. P200,000
69. Debtors A, B, C, D and E are liable to creditors F, G, H I & J in the amount of P50,000. How much
can F, G & H collect form A & B (total amount)?
a. P 6,000 C. P15,000
b. P12,000 D. P18,000
70. Based on the above problem if active solidarity exists how much can F & G collect from A & B?
a. P 6,000 C. P15,000
b. P12,000 D. P20,000
71. After many years of shopping in the Metro Manila area, housewife HW has developed the sound
habit of making cash purchases only, none on credit. In one shopping trip to Mega Mall, she got
the shock of her shopping life for the first time, a store’s smart salesgirl refused to accept her
coins in payment for a purchase worth not more than one hundred pesos. HW was paying seventy
pesos in 25-centavo coins and twenty five pesos in 10-centavo coins. Strange as it may seem, the
salesgirl told HW that her coins were not “legal tender”. Do you agree with the salesgirl in respect
for the 10-centavo coins and 25 centavo-coins the legal tender is up to P50.00 only?
1st Statement: No , because for the 10-centavo coins and 25-centavo coins the legal tender is up to
P50.00 only.
2nd Statement: All coins issued by the Central Bank in any amount are considered legal tender.
A. B. C. D.
st
72. Which statement is correct about extinguishment of obligation? A. Condonation is generally

gratuitous.
B. Prescription is a primary mode of extinguishing an obligation.
C. Confusion or merger rights may occur in the person of a guarantor.
D. Agency wherein novation is effected must be in writing and thru a Special Power of Attorney.
73. When the debtor abandons and assigns all his properties in favor of his creditors for the latter to
sell and satisfy their credits, this is:
a. Application of payment C. Expromission
b. Dacio en pago D. Payment by cession
74. A owes B – P10,000. Without the consent of A, B agreed with C’s proposal (C is suitor of A) to
answer for A’s obligation for which A vehemently objected to but could not do anything. The
following week all of C’s properties were destroyed by fire, hence he could no longer pay the
P10,000 obligation.
a. B cannot collect at all. C. A’s obligation is not revived.
b. A must answer for ½ of the obligation. D. A’s obligation is revived.
75. Neither an essential or accidental element of a contract
A. Cause or consideration C. Penal cause in a contract

B. Consent D. Warranty against eviction
76. Which is the most defective contract among the following?

a. A & B, both minors entered into a contract of sale involving chocolate worth P400.
b. Contract of partnership wherein a car worth P1M is contributed but not reduced in a
public instrument.
c. A contract of sale wherein one party sold to the other his hereditary rights under the pain
of being raped.
d. A compromise between Senator Lacson and Pre. GMA to hide the evidence against Jose
Pidal, to achieve peace and reconciliation for the country.
77. The following, except one, are void or inexistent contracts. A. Those which are
outside the commerce of man.
B. Those which contemplate a very difficult service.
C. Those which are absolutely simulated for fictitious.
D. Those whose cause or object did not exist at the time of transaction.
78. 1st Statement: The defense that a contract is unenforceable is subject to prescription. 2nd Statement:
In solution indebiti the contract violated is the premature payment of the obligation.
A. B. C. D.
st
Aerodactyl delivered her bracelet for Snorlax for Snorlax’s necklace. No written agreement was
signed by the parties. Articuno, Zapdos and Moltres (Aerodactyl’s triplets) are jointly liable to Dratini in
the amount of P9,000. Dratini assigns the entire credit to Articuno.
Dragonair, Dratini’s older brother, owes their oldest brother Dragonite P10,000 due on May 27,
20xx. Dragonair owes Dragonite P8,000 due on May 28, 20xx. Dragonair obliged himself to deliver to
Dragonite his dog valued at P6,000 on May 30, 20xx. On May 31, 20xx, Dragonair paid Dragonite
P10,000.
Mewtwo is indebted to Mew for P100,000. For the purpose of defrauding Mew, Mewtwo sold
his only parcel of land to Ash valued at P100,000. Ash has no knowledge of the intention of Mewtwo.
79. Which of the following is an appropriate description of the contract between Aerodactyl and
Snorlax?
A. Onerous and B. Onerous and C. Bilateral and D. Aleatory and

bilateral innominate innominate nominate
80. In the case of Articuno, Zapdos and Moltres:
I. The obligation is extinguished because of confusion.

II. Zapdos and Moltres will not be liable to Articuno.
III. Articuno becomes the new creditor and may demand from Zapdos and Moltres P4,500 each.
IV. Articuno’s share in the obligation is extinguished because of merger.

81. If Dragonair makes an application of payment:
A. The P10,000 should be applied to the first debt only.

B. The P10,000 should be applied to the second debt only.
C. The P10,000 may be applied either to the first debt or to the second debt.
D. The P10,000 may be applied to the first debt, or to the second debt or to the third debt.
I. The contract between Mewtwo and Ash is binding.

II. The contract is voidable because Mewtwo acted in bad faith.
III. The contract between Mewtwo and Ash is rescissible.
IV. The right of Mew is to rescind the contract because it was intended to defraud him.

83. In order that fraud may make a contract voidable:
A. It may be incidental but both parties should not be in pari delicto.

B. It may be serious and the parties must be in pari delicto.
C. It may be incidental but should have been employed by both contracting parties.
D. It should be serious and should have not been employed by both contracting parties.
84.The buyer has the right to the fruits of the thing from:
A. Time contract of sale is perfected C. Time of delivery
B. Time fruits are delivered D. Time of obligation to deliver it arises
85. The buyer acquires a real right to the fruits of the thing sold.
a. From the time the obligation to deliver the thing arises
b. From the perfection of the contract of sale
c. From the delivery thereof
d. From payment of the price
86. D is indebted to C in the amount of P200,000 and delivers to C his diamond ring by way of pledge.
If D sells the same diamond ring to T, when will T acquire ownership of the same?
a. From the time the sale is perfected between D and T
b. From the time T pays the price to D
c. From the time C consents to the sale between D and T
d. From the time T obtains actual possession of the diamond ring
87. A, B and C borrowed “en solidum” from X, Y and Z, P900,000 payable on December 15, 2008. On
August 19, 2007, A paid X the whole amount of P900,000. If co-debtor B reimburses A on July 20,
2009, how much should he pay him?
a. Nothing, because the premature payment extinguished his liability for reimbursement
b. P300,000 only because the payment of A is unauthorized
c. P300,000 with interest from August 19, 2007 to July 20, 2009
d. P300,000 with interest from December 15, 2008 to July 20, 2009
88. Which of these is not a special form of payment?
a. Application of payment d. Tender of payment & consignation
b. Dacion en pago
c. Cession en pago
89. A purchased on installment from B a house and lot. After a year of installment payment, A died.
B refuses to accept the monthly installment being tendered by his heirs contending that upon the
death of their father with whom he has a contract, the contract automatically terminated or
cancelled. B is:
a. Wrong for right acquired in virtue of an obligation is transmissible
b. Wrong for the right to continue the payment is personal only to A
c. Correct for the contract is between him and A only
d. Correct because the parties did not agree on the transmissibility of
the right
90. A) Dindo insured his only house with Sunog Agad Insurance Co. Dindo’s house was hit by a
lightning and was totally burned. The insurance co. is not liable because the loss of the house was
due to fortuitous event.
B) The condition not to do an impossible thing shall be considered as not having been agreed upon.
a. Only A is false
b. Only A is true
c. Both are true
d. Both are false
91. Lyceum of the Philippines University
92. College of Business Administration
93. Accountancy and Management Accounting Department
94. OBLIGATIONS AND CONTRACTS
95. COMPREHENSIVE EXAMINATION
96. ANSWER KEY
1 C 41 C 81 C
2 C 42 A 82 A
3 A 43 A 83 D
4 C 44 C 84 A
5 B 45 C 85 C
6 A 46 A 86 C
7 A 47 C 87 D
8 D 48 D 88 A
9 C 49 A 89 A
10 D 50 B 90 B
11 D 51 D
12 C 52 D
13 B 53 D
14 C 54 D
15 D 55 C
16 C 56 A
17 C 57 A
18 A 58 C
19 B 59 A
20 B 60 D
21 A 61 A
22 B 62 D
23 A 63 D
24 D 64 C
25 C 65 D
26 B 66 C
27 B 67 B
28 C 68 B
29 D 69 B
30 B 70 D
31 D 71 D
32 A 72 D
33 C 73 D
34 B 74 C
35 C 75 D
36 A 76 D
37 C 77 B
38 B 78 D
39 D 79 A
40 C 80 A

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Lyceum of the Philippines University

College of Business Administration

Accountancy and Management Accounting Department

OBLIGATIONS AND CONTRACTS

In a street nearby, Caterpie obliged himself to deliver to Metapod the following:

1. Based on the data above, which of the following statements is correct?

A. Both statements are correct.

3. Based on the data above, evaluate the following statements.

A. True, true B. True, false C. False, true D. False, false

4. Based on the data above, is Butterfree liable?

A. True, true B. True, false C. False, true D. False, false

I. Yes, the obligation of Kakuna was to deliver a generic thing – money.

A. True, true B. True, false C. False, true D. False, false

I. The former may ask for reformation.

A. Absolute B. Relative C. Fraud D. Misrepresentation

A. Demand object No. 3 only as it is still available.

A. The contract is void because it is potestative on the part of C.

10. Compensation cannot take place except:

A. When one debt arises from the obligations of a deposit.

11. As a result of Arbok’s transaction with Ekans,

12. Is Raichu’s obligation to pay the price extinguished?

A. True, true B. True, false C. False, true D. False, false

A. Yes, yes B. No, yes C. Yes, no D. No, no

14. Based on the data above, is Ms. Nidoran still liable?

15. Based on the data above, is Mr. Nidorino correct?

A. Yes, both obligations are due.

16. Based on the data above, which is correct?

17. Is the action of Vulpix Bank proper? Is Jigglypuff’s action correct?

A. Yes, yes B. No, yes C. Yes, no D. No, no

18. Based on the data above, evaluate the following statements.

I. Wigglytuff’s obligation towards Zubat is extinguished.

A. True, true B. True, false C. False, true D. False, false

19. Based on the data above, evaluate the following statements.

A. True, true B. True, false C. False, true D. False, false

20. Based on the data above, evaluate the following statements.

A. True, true B. True, false C. False, true D. False, false

A. Arcanine is allowed to avail of compensation.

A. Novation B. Delegacion C. Expromission D. Subrogation

25. Evaluate the following statements.

27. Based on the data above, evaluate the following statements.

A. True, true B. True, false C. False, true D. False, false

A. P1,000 B. P1,500 C. P500 D. P0

A. P1,000 B. P500 C. P333 D. P0

A. P3,000 B. P2,000 C. P1,000 D. P0

A. The contract is rescissible because there is lesion.

A. Liberty of contract B. Relativity of C. Consensuality of D. Mutuality of

A. Ratify the contract

A. Rescissible B. Voidable C. Unenforceable D. Void

A. Void B. Voidable C. Valid D. Unenforceable

A. P12,000 B. P4,000 C. P8,000 D. P24,000

37. The contract by Shellder to Cloyster is:

A. Rescissible B. Voidable C. Unenforceable D. Void

38. Haunter can demand from Gastly:

A. P30,000 plus P3,000 plus legal interest

39. Based on the data above, evaluate the following statements.

A. True, true B. False, false C. True, false D. False, true

40. May Krabby refuse to buy the said watch?

A. No, because Krabby’s offer of P800 was accepted by Hypno

In a contract of sale of Hitmonchan Hardware Store (Construction Materials) it was stipulated

42. Based on the data above, evaluate the following statements.

A. One of the statements is correct.

A. One of the statements is correct.

45. Based on the data above, evaluate the following statements.