MCQs – CONTRACTS

School Year 2016-17 (Second Semester)

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

15. An instance where the contract or stipulation is against morals:
a. a debtor agrees to work as “kasambahay” for her creditor without pay until the
debtor could find the money with which to pay the debt;
b. a student was required to refund scholarship expenses as a consequence of
transferring to another school;
c. a promise of marriage based on a carnal consideration;
d. all of the above;
e. none of the above.
16. A limitation on the right to contract which pertains to public safety of the people:
a. law;
b. morals;
c. good customs;
d. public order;
e. public policy.
17. In order to declare a contract void as against public policy, its consideration or thing
to be done:
a. has a tendency to injure the public;
b. is against public good;
c. contravenes some established interests of society;
d. tends clearly to undermine the security of individual rights;
e. all of the above.
18. A stipulation that is against public policy:
a. a retainer contract between a judge and a company for the judge to render legal
services;
b. a partnership agreement whereby one will contribute his personal connections
to public officials;
c. confession of judgment;
d. all of the above.
19. This rule is expressed in a maxim “the law will not aid either party to an illegal
contract:”
a. rule of pari delicto;
b. the principle of pactum commissorium;
c. rule of res inter alios acta;
d. rule on consensuality.
20. Contracts which are governed by stipulations of the parties, by the Civil Code, by the
rules applicable to the most analogous contracts, and by the customs of the place:
a. nominate contracts;
b. innominate contracts;
c. onerous;
d. gratuitous.
21. The rule that an assignee or an heir shall be bound by the terms of a contract (in the
same manner as the contracting party) is not absolute. The rule is not applicable when:
a. there is a stipulation pour autrui or beneficial stipulation;
b. the rights and obligations arising from the contract are not transmissible by its
nature;
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c. there is intermeddling or interference;

d. all of the above;
e. none of the above.
22. An exception to the rule of relativity:
a. pledge of a personal property;
b. unrecorded mortgage of a building;
c. a contract in fraud of creditors;
d. a contract of lease for more than a year.
23. Which of the following is not a requisite of stipulation pour autrui?
a. the stipulation is only part of the contract;
b. the benefit or favor conferred is just an incidental benefit or interest;
c. the third person must have communicated his acceptance before revocation of
the contract;
d. neither of the contracting parties is the legal representative of the third person.
24. Ms. Katibog, a very popular celebrity, was under an exclusive contract with ABS
XNN. Mr. Maliksi, president of GME 77, fell in love with Ms. Katibog and induced the
latter to break the contract with ABS XNN by giving her a house and lot for every season
completed aside from doubling her salary. ABS XNN sued GME 77 for damages. Which
is the following legal effect is correct as a consequence of the act of Mr. Maliksi?
a. Mr. Maliksi and Ms. Katibog are liable for damages for tort committed against
ABS XNN;
b. Mr. Maliksi is not liable for damages as the contract between Ms. Katibog and
ABS XNN was a restriction of her freedom to contract;
c. Mr. Maliksi is not liable for damages as the contract between Ms. Katibog and
ABS XNN was a restraint of trade;
d. Mr. Maliksi and Ms. Katibog are liable for damages for breach of contract.
25. Which of the following stipulations is allowed under the principle of mutuality of
contract?
a. one of the contracting parties is allowed to determine the validity of the
contract;
b. one of the contracting parties is allowed to determine the performance of the
contract;
c. a third person is authorized to determine the fulfillment of the contract;
d. a third person is authorized to determine the validity of the contract.
26. Contracts are perfected by mere consent of the parties. However, which of the
following contracts cannot be perfected even if there is concurrence of wills as to the
object and cause?
a. deposit;
b. pledge;
c. loan;
d. contract of carriage;
e. all of the above;
f. none of the above.
27. It is the giving of one’s conformity to the terms of the contract freely, intelligently and
voluntarily:
a. offer;
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b. acceptance;
c. consent;
d. invitation.
28. Consent is manifested by:
a. meeting of the offer and the acceptance upon the object;
b. meeting of the minds of the contracting parties;
c. meeting of the offer and the acceptance upon the thing and the consideration of
the contract;
d. acceptance of the consideration.
29. A valid consent:
a. reluctant consent;
b. consent given against better judgment;
c. consent against his wish and desires;
d. all are freely given;
e. all are not valid.
30. A business advertisements of things for sale are considered:
a. definite offer;
b. mere invitations to make an offer;
c. invitation to make a bid;
d. accepted once paid.
31. “For sale: Toyota Vios: Model 2009; Color Blue; Plate Number ZBC 219; Price
P300,000.00 cash only and non-negotiable. If interested, please contact the registered
owner Mr. Zoren Xavier at 0917-2501472.” What is the effect of the advertisement?
a. it constitutes a definite offer;
b. it is a mere invitation to make a proposal;
c. it is not a definite offer;
d. it is a mere invitation to make a counter-offer.
32. It is a preparatory contract to the principal contract should the parties finally
consummate their transaction which is under negotiation:
a. a contract with earnest money;
b. an option contract;
c. unilateral promise to buy or sell;
d. an agreement with stipulation on down payment.
33. In an option founded on a consideration regarding offers to buy or sell:
a. the owner parts with his right to sell his property for a limited period;
b. it is a mere offer which is not binding;
c. the offer may still be withdrawn even if the offeree has already accepted it;
d. the promisor is not bound by his promise and may, accordingly withdraw it.
34. Disqualification to contract, as distinguished from incapacity to contract:
a. restrains the very right itself;
b. based on subjective circumstances of certain persons;
c. the resulting contract is voidable;
d. the party may still enter into contract through others.
35. Mistake of fact, as distinguished from mistake of law:
a. vitiates consent;
b. is an erroneous conclusion regarding the interpretation of the legal effects of a
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certain act;
c. generally does not render the contract voidable;
d. the principle that ignorance of the law excuses no one is applicable.
36. Mistake or error that vitiates consent:
a. when mutual error of the parties as to the legal effect of an agreement frustrates
their real purpose or intent;
b. when mistake refers to the object of the contract or to a condition which
principally moved one or both parties to enter into a contract;
c. ignorance of fact;
d. all of the above;
e. none of the above.
37. Which of the following classes of vices is considered as vice of declaration?
a. intimidation, violence or undue influence;
b. mistake or error;
c. fraud;
d. simulation of contract.
38. Which of the following errors or mistakes will vitiate consent?
a. error as to personal motive;
b. error as to the true boundaries of a parcel of land offered for sale;
c. error in the identity of a particular singer whose performance may be done by
other singers;
d. error coupled with negligence or knowledge of the doubt, contingency or risk.
39. The following are required in order to vitiate consent through intimidation, except:
a. one of the contracting parties is compelled to give his consent by a reasonable
and well-grounded fear of an evil;
b. the force employed to wrest consent must be serious and irresistible;
c. the evil must be imminent and grave;
d. it must be the determining cause for the party upon whom it is employed in
entering into the contract.
40. If Kobe signs a contract of sale because Lebron is pointing a gun at him, the said
contract is:
a. void due lack of consent;
b. voidable due to violence;
c. voidable due to intimidation;
d. rescissible because of undue influence.
41. Mr. Bird signed a compromise agreement with the Alpha Bank because the latter
threatened to foreclose his properties used as collaterals for his loans and to refuse him
any further credit facilities, can Mr. Bird question the compromise agreement?
a. Yes, the agreement is void for lack of consent;
b. Yes, the agreement is voidable because the bank employed intimidation;
c. No, the agreement is valid because the bank’s claim is legal and just;
d. Yes, the agreement is unenforceable due to bank’s lack of authority to
foreclose the properties.
42. Undue influence means:
a. solicitation and argument;
b. importunity or persuasion of another against his better judgment;
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c. appeals to affection which made the party enter into contract against his wishes
and desires;
d. subjugating the mind of a contracting party as to destroy his free agency;
e. all of the above.
43. Which of the following is a ground for annulment of a contract?
a. dolo causante;
b. dolo incidente;
c. fraud in the performance;
d. all of the above.
44. Use of insidious words and machinations by one of the contracting parties to induce
the other party to enter into a contract, which, without them, he would not have agreed to:
a. dolo causante;
b. dolo incidente;
c. fraud in the performance;
d. all of the above.
45. Usual exaggerations in trade not in themselves fraudulent because the other party has
the opportunity to know the facts:
a. intolerable fraud;
b. dealer’s talk;
c. broker’s talk;
d. caveat emptor.
46. It is the act of deliberately deceiving others, the parties pretending by their agreement
the appearance of a contract which is either non-existent or concealed:
a. casual fraud;
b. insidious machinations;
c. simulation of contract;
d. incidental deceit.
47. In a relatively simulated (disimulado) or disguised contract, the parties are bound to
the true or real agreement, except:
a. when the contract prejudices a third person;
b. when the purpose of the contract is contrary to law, morals, good customs,
public order, or public policy;
c. a and b;
d. none of the above.
48. Which of the following may not be the object of contracts?
a. future things;
b. transmissible rights;
c. future inheritance;
d. contingent right;
e. services.
49. What is the legal effect of relative impossibility of an object of the obligation?
a. the contract is void;
b. the contract is valid;
c. the contract is unenforceable;
d. the contract voidable.
50. The reason why a party entered into a contract:
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a. cause or consideration;
b. juridical tie;
c. object;
d. motive;
51. The following are classes of contracts according to cause, except:
a. onerous contracts;
b. contracts of adhesion;
c. remuneratory contracts;
d. contracts of pure beneficence.
52. Contracts without cause or with unlawful cause produce no effect whatsoever, which
of the following is a requisite of a good cause?
a. the cause must be existing at the time of the perfection of the contract;
b. the motive must be shown at the time of the execution of the contract;
c. the cause must be expressed;
d. the cause must be the exact equivalent of the other party’s prestation.
53. Effect of a statement of false cause in a contract:
a. the contract is void;
b. the statement is deemed not written;
c. the contract is voidable;
d. the obligation created by the statement is extinguished.
54. An owner of land worth P1Million sold it for only P20.00, is the contract valid?
a. no, the price is shockingly inadequate;
b. yes, where the cause is the mere liberality of the owner;
c. no, because of a false cause;
d. all are correct.
55. As a general rule, lesion or inadequacy of cause shall not invalidate a contract, except:
a. when the lesion is more than 25% of the value of the thing which is the
object of the contract;
b. in cases specified by law;
c. when there has been fraud, mistake or undue influence;
d. all of the above;
e. none of the above.
56. The following must appear in a public instrument, except:
a. sale or conveyance of real right;
b. cession or repudiation of hereditary rights;
c. power to administer property;
d. contracts where the amount involved is P500.00.
57. It is a remedy in equity by means of which a written instrument is made or construed
so as to express or confirm the real intention of the parties when some error or mistake is
committed:
a. annulment;
b. resolution;
c. reformation;
d. rescission proper.
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58. If two parties agree upon a mortgage or pledge or real or personal property, but the
instrument states that the property is sold absolutely or with a right of repurchase, what is
the remedy of the injured party?
a. action for rescission;
b. action for annulment;
c. action for declaration of nullity;
d. action for reformation.
59. In what instance reformation is proper?
a. simple donations inter vivos wherein no condition is imposed;
b. unilateral mistake of one party and concealment on the part of the other;
c. wills;
d. when the real agreement is void.
60. When it is absolutely impossible to settle doubts by the rules of interpretation under
the Civil Code, and the doubts refer to incidental circumstances of a gratuitous contract,
what shall prevail?
a. greatest reciprocity of interests;
b. least transmission of rights;
c. literal meaning of stipulation;
d. usage or custom of the place.
61. Contracts validly entered into by contracting parties, but for having caused economic
damage or lesion to one of the parties or to a third person or for having entered into in
fraud of creditors, or without the knowledge and approval of the judicial authority having
custodia legis over the property involved:
a. rescissible;
b. voidable;
c. unenforceable;
d. void;
e. inexistent.
62. Which of the following is rescissible?
a. a contract of sale of real property of a ward with lesion of more than 25%
without court approval;
b. a contract for repair of a car belonging to the ward with lesion of more than
25% with court approval;
c. a contract of lease for six months of a building owned by the ward with lesion
of more than 25% without court approval;
d. all of the above.
63. A defective contract where the origin of the defect is the incapacity of both
contracting parties:
a. rescissible;
b. voidable;
c. unenforceable;
d. void;
e. inexistent.
64. It is the validation of a transaction otherwise without validity or partly valid:
a. ratification;
b. confirmation;
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c. acknowledgment;
d. all of the above;
e. none of the above.
65. A defective contract where the origin of the defect is the absence of any of the
essential requisites of a contract:
a. rescissible;
b. voidable;
c. unenforceable;
d. void;
e. inexistent.
66. The rule which requires that certain agreements or some note or memorandum
thereof, shall be in writing and subscribed by the party charged or by his agent,
otherwise, such agreements shall be unenforceable:
a. statute of limitations;
b. statute of frauds;
c. deadman’s statute;
d. none of the above.
67. The following contracts exist and are valid but cannot be enforced in court if not
evidenced by writing or secondary evidence of their contents, except:
a. a contract entered into in the name of another person by one who has no
authority or legal representation, or who has acted beyond his power;
b. an agreement that by its terms is not to be performed within a year from the
making thereof;
c. a special promise to answer for the debt, default, or miscarriage of another;
d. an agreement made in consideration of marriage, other than a mutual promise
to marry;
e. a representation as to the credit of a third person.
68. Which of the following is correct?
a. the statute of fraud applies only to executory contracts;
b. contracts infringing the Statute of Frauds are void;
c. the defense of the Statute of Frauds cannot be waived;
d. a contract violating the Statute of Frauds can be assailed by third persons.
69. A characteristic of a void or inexistent contract:
a. generally, it produces no civil effects;
b. it is susceptible to ratification;
c. action or defense for the declaration of its inexistence or absolute nullity
can be waived or may prescribe;
f. it can give rise to another contract.
70. Which of the following contracts is valid?
a. contracts whose object is outside the commerce of men;
b. contracts which contemplate an impossible service;
c. contracts whose causes or objects are future things and did not exist at the time
of the transactions;
d. contracts where the intention of the parties relative to the principal object of the
contract cannot be ascertained.
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True or false:

a. A third person may determine the performance of an obligation whose decision

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