SUBJECT: OBLIGATIONS AND CONTRACTS (PHILIPPINES)

DEFECTIVE AND RESCISSIBLE CONTRACTS:

1. A rescissible contract has no force and effect?

True or False

2. Guardian sold the property of the Ward to Jesus. The contract is rescissible. When Ward is already 19, he discovered the rescissible nature of the contract. But the property is already in the possession of Jess. Jess inherited the property from his father Jesus.

A. Ward can recover from Jess since Jess merely acquired the defective right of Jesus.

B. Ward can recover if Jess is aware of the defective right of Jesus.

C. Ward cannot recover anymore since Jess is an innocent party.

3. Peter is the guardian of Paul, a 17 year old minor Freshman in DLSU. Peter, acting within his power, sold one of the subdivision lots owned by Paul. The price is P1,000,000, but Peter sold it to his best friend at a discount price of P750,000. Paul discovered the sale, after graduating from law school.

A. The contract is rescissible but has prescribed.

B. The contract is rescissible because of lesion

C. The contract is not rescissble

4. In rescission, there must be mutual rescission.

True or False

5. Peter is the guardian of Paul, a 17 year old minor. Peter, acting within his power, sold one of the subdivision lots owned by Paul. The price is P1,000,000, but Peter sold it to his best friend at a discount price of P750,000.

A. The contract is rescissible

B. The contract is not rescissible

6. Rescission is not obligatory upon the aggrieved party

True or False

7. A contract entered into by the guardian of a minor is rescissble the moment damage is sustained by the ward.

True or False

8. Admin is appointed to take care of the properties of Absentee. Which among the following Admin cannot do:

A. manage the grocery business of Absentee and sell the products therein

B. Answer not given

C. Sell the lots in the subdivision project owned by Absentee

D. Have the house rented

9. Damage is immaterial if the contract entered into by the guardian or the administrator is approved by the court.

True or False

10. When is there a fraud of creditors

A. When the debtor purchase materials needed in the business at a higher price

B. When the debtor enters into contract that are prejudicial to the business of the debtor

C. When the debtor makes promotional offer that are not backed by feasibility studies.

D. Answer not given.

DEFECTIVE CONTRACTS: VOIDABLE AND VOID

1. Voidable contracts cannot be ratified by:

A. Innocent party

B. Guilty party

C. Implied Ratification

D. Express Ratification

2. If damage is not sustained in the contract but the consent is not freely given, then the contract is not voidable.

True or False

3. If there is a voidable contract, which among the following cannot be annulled anymore.

A. The contract entered by Bobby, 21 years old, when he (bobby) was 15

B. That contract entered by the father of Johnny 20 years ago which defrauded the Johnny's father, but discovered 2 year ago only.

C. Answer not given

D. That contract entered by Jimmy, when he was still insane, 3 years ago.

4. There is implied ratification when the guardian of the minor did not object to the contract entered into by his ward.

True or False

5. If the contract is entered into between the minor and the insane person duly represented by his guardian, the contract is voidable.

True or False

6. Which among the following contracts are voidable?

A. That entered into by a minor with assistance from his guardian

B. That entered into by a deaf-mute author

C. That entered into by a person during his lucid interval

D. Answer not given

7. The defect in a voidable contract is

A. internal; if there is no gain

B. internal; gain or damage is immaterial

C. external; there must be damages

D. external; when forced or intimidation was used

8. Which of the following cannot move for annulment

A. The heirs of the deaf-mute who cannot read or write who entered into a contract

B. Answer is not given

C. The minor who entered into a contract

D. The guardian of the insane person who entered into a contract

9. If the ground for annulment is lack of capacity then the action for annulment cannot prescribed.

True or False

10. If the contract is entered into by a person with a very low level of intelligence then the contract is voidable. (No additional facts)

True or False

11. Who cannot raise issued of illegality of contracts

A. Parties

B. Any third person

C. Answer not given

D. Assign and Heirs

12. A purchased goods from B knowing that the same are smuggled goods. If they were apprehended during the sale.

A. They are in pari delicto but A can recover the money

B. They are in pari delicto and both will be prosecuted

C. Answer not given

D. Only B is liable since he is the smuggler

13. As a general rule, just like all defective contracts, void contracts can be ratified.

True or False

14. Sale of a human cadaver

A. Valid

B. Void since object is outside the commence of men

C. Void for being impossibe

15. Sale of a piece of land to an American Citizen

A. Void for being prohibited by law

B. Void for being impossible

C. Valid

16. The contract of sale involving a condominium unit that is still under construction

A. Void because object is not yet existing

B. Valid

C. Void because object is contrary to law

17. In a one contract, it is possible to give effect to the valid provisions and declare void the rest of the provisions.

True or False

18. Although void contracts produced no legal effect, the action to declare the nullity of void contracts must be brought within the prescriptive period.

True or False

19. In Pari Delicto means both parties are at fault

True or False

20. In void contracts, the defect is inherent in the contract itself.

True or False

DEFECTIVE CONTRACTS: UNENFORCEABLE

1. If the agent exceeded his authority then the contract is unenforceable because it is a violation of the Statutes of Fraud.

True or False

2. As a general rule, contracts must be in writing to be valid.

True or False

3. On Monday, A and B entered into a contract of sale of a piece of land. They did not put it in writing. Agreement is that on Wednesday, title will be given to buyer and price (money) will be given to seller. On Wednesday, they see each other and document is executed with delivery of title and payment of price. On Thursday, the check given as payment was dishonored. What is the status of the contract on Thursday?

A. Valid (No defect)

B. Unenforceable

4.On Monday, A and B entered into a contract of sale of a piece of land. They did not put it in writing. Agreement is that on Wednesday, title will be given to buyer and price (money) will be given to seller. On Wednesday, they see each other and document is executed with delivery of title and payment of price. On Tuesday, the status of the contract is:

A. Valid (not defective)

B. Unenforceable

5. The Statutes of Fraud discusses validity of contract that are not in writing.

True or False

6. Minor and Insane entered into a contract duly represented by their respective guardians. What is the status of the contract?

A. Unenforceable

B. Valid (not defective)

C. Valid (but with defect)

7. The contract entered into between the guardians of incapacitated persons can be unenforceable if it is not in writing.

True or False

8. If the contract is falling under the Statutes of Fraud, the parties can disregard the defect and simply give effect to the contract.

True of False

9. Uncle told Niece that if she will marry the choice of uncle, she will be given a house and lot worth P20M as a gift. Niece got married to Uncle's choice. Which of the following is true?

A. Not valid if not reduce into writing

B. All of the foregoing

C. Valid if everything is in writing

D. Marriage is valid

10. Lessee rented a space to Lessor, Agreement is for three years but nothing is in writing. Lessee gave Lessor 36 post-dated checks corresponding to the rental payments. What is the status of the contract?

A. Valid (but with defect)

B. Unenforceable

C. Valid (not defective)