Name: _______________________________

Homework 1 – Law1101 – Contract 1

1. Contracts take effect only between the parties or their assigns and heirs, except where the rights and
obligations arising from the contract are not transmissible by their nature, by stipulation, or by provision of
law. In the latter case, the assigns or the heirs are not bound by the contracts. This is known as the principle
of (2011 Bar)
a. Relativity of contracts
b. Mutuality of contracts
c. Freedom to stipulate
d. Obligatory force of contracts
2. The estate of Krispy Kreme who died recently, shows, among other documents/contracts, the following:
I. A certificate from Harvard University granting a scholarship to Krispy. He was subjected to exhaustive
examinations and interviews before he was granted the scholarship. He was supposed to start studying
at Harvard in 3 months’ time.
II. Articles of partnership of Donut enterprise showing Krispy as a general partner.
III. A stock certificate of Dunkin Corporation showing Krispy as the owner of P5,000 shares of stock.
IV. A promissory note amounting to P100,000 executed by Maker in favor of Krispy. The note is due after
90 days.
Which of the rights of Krispy arising from the said documents/contracts will be transmitted to the heirs?
a. I and II c. III and IV
b. II and III d. I and IV
3. This is a real contract:
a. Deposit c. Antichresis
b. Pledge d. All of them
4. S offered to sell to B his house and lot for P10,000,000. In order to pressure B into buying said house and
lot, T, a very good friend of S, threatened B with death as a result of which B accepted the offer of S. It
turns out now that the market value of the house and lot is P15,000,000. Is the contract of S and B valid?
a. The contract is valid since it is very clear that S did not apply the intimidation.
b. The contract is voidable because the consent given by B is anyway vitiated even if the intimidation was
employed by a third person.
c. The issue of the contract being voidable is not relevant because B will not have the contract avoidable
because it is actually favorable to him.
d. It is not B but S or T who can file the action for annulment.
5. On July 1, 2019, Serrano offered to sell his only Mercedes Benz car for P1,000,000.00 to Benitez who was
interested in buying the same. In his letter to Benitez, Serrano stated that he was giving Benitez up to July
31, 2019 to make up his mind whether to buy the car or not. On July 25, 2019, Serrano personally went to
Benitez to inform him that he was no longer willing to sell the car unless the price was increased to
P1,400,000.00 because another buyer was interested in buying the car for the said amount of
P1,400,000.00.
a. Benitez may compel Serrano to sell to him the car for P1,000,000.00.
b. Serrano may validly withdraw his offer to Benitez because the option was not founded upon
consideration
c. Serrano may not withdraw his offer until after the lapse of the option period that he gave to Benitez.
d. The increase in price made by Serrano was not valid because it was made within the option period.
6. Which of these constitutes fraud?
a. The usual exaggeration in trade if the other party had an opportunity to know the facts.
b. An expression of opinion which did not turn out to be true if made by an expert and the other party
relied on it.
c. Failure to disclose facts when there is no duty to reveal them.
d. A misrepresentation made in good faith.
e. Both b and c.
7. In a written contract, the true intention of the parties was not reflected therein through the fraud committed
by one of them, which fraud prevented a meeting of the minds. The applicable remedy would be -
a. Reformation of the contract
b. Resolution of the obligation
c. Annulment of the contract
d. A petition for the declaration of nullity of the contract
8. To defraud his creditors, A contracted B by selling a land to B. B now seeks to register the land with the
Register of Deeds. X a creditor of A seeks to prevent the registration on the ground that the contract is
rescindable. Despite X’s objection may the land be registered based on the contract in B’s name.
a. The land cannot be registered based on the contract which is rescindable.
b. The land cannot be registered because the contract is in fraud of creditor.
c. The land can be registered based on the contract because the contract is not yet rescinded.

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 d. The land can be registered because the contract is valid and can be attacked collaterally in a land
registration proceeding.
9. X and Y were to marry in 3 months. Meantime, to express his affection, X donated a house and lot to Y,
which donation X wrote in a letter to Y. Y wrote back, accepting the donation and took possession of the
property. Before the wedding, however, Y suddenly died of heart attack. Can Y’s heirs get the property?
(2011 Bar)
10.
a. No, since the marriage did not take place.
b. Yes, since all the requisites of a donation of an immovable are present.
c. No, since the donation and its acceptance are not in a public instrument.
d. Yes, since X freely donated the property to Y who became its owner.
11. Contracts are effective and binding only between the parties, their assigns and their heirs. Three of the
following enumerations are exceptions as provided by law. Which does not belong to the exception?
a. Where there is a stipulation in favor of a third party
b. Where one of the parties to the contract dies and thereafter a suit is filed on the basis of the contract.
c. Where the obligations arising from contract are not transmissible by their nature.
d. Where the obligations arising from contract are not transmissible by stipulation or by provision of law.
12. A wrote a letter to B wherein A offered to sell a piece of land to B for P200,000. B signified his desire to
buy the land. In A’s letter, B was given a period of two (2) months within which to produce the P200,000.
After 45 days, A told B that price of the land is now P250,000. Can be compel A to accept the P200,000
first offered by A and execute the deed of sale?
a. Yes, because there was actual meeting of the minds of the parties.
b. No, for B did not signify his acceptance of A’s offer.
c. Yes, because A is already estopped by his signed letter.
d. Yes, because the period of two (2) months has not expired.
13. Which is the correct order of application of the rules in connection with solution of problems involving
innominate contracts?
a. The provisions of the Civil Code; then stipulation of the parties; then provisions of the most analogous
nominate contract and lastly custom or usage of the place.
b. Custom or usage of the place; then stipulation of the parties; then the provisions of Civil Code and
lastly provision of the most analogous nominate contract.
c. The stipulation of the parties; then the provisions of the Civil Code; then the provisions of the most
analogous nominate contract and lastly the custom or usage of the place.
d. The provisions of the most analogous nominate contract; then the stipulation of the parties; then the
provisions of the Civil Code and lastly the custom or usage of the place.
14. This element exists only when they are expressly provided by the parties:
a. natural elements.
b. accidental elements.
c. essential elements.
d. original elements.
15. S offered to sell his house and lot to B for P5,000,000 giving to him an option of 60 days within which to
decide whether or not to buy. After only 15 days, S met T who offered to buy the same house and lot for
P8,000,000. S then notified B of the withdrawal of the option and proceeded to sell to T. B files an action
for damages against S.
a. B cannot recover damages from C because his option is without consideration as something paid or
promised.
b. B can recover damages from S because the latter violated the option given to the former.
c. B can recover damages from S if B gave S option money which will result in a perfected contract of
sale.
d. Correct answer not indicated
16. A contract of commodatum has the following essential elements:
a. consent of the contracting parties, object certain and cause or consideration.
b. consent of the contracting parties, object certain, cause or consideration and delivery of the object.
c. consent of the contracting parties, object certain, cause or consideration and formalities required by
law.
d. consent of the contracting parties, object certain, delivery of the object, and formalities required
by law.
17. Under the following contracts the rights and obligation are not transmissible except:
a. Contract of lease
b. Contract of agency
c. Contract of partnership
d. Contract of commodatum
18. In a contract, as written, Dave promises to pay Carlo P20,000 on September 15, 2017. The consideration
received by Dave is not stated in the contract:
a. The contract is valid because the cause is always presumed to exist.
b. The contract is valid so long as it is in writing.
c. The contract is valid because cause is not essential to a contract.

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 d. The contract is void because the cause is not stated.
19. Which of the following is consensual contract?
a. Contract of partnership with capital contribution of real property amounting to P100,000.
b. Donation of personal computer worth P5,000.
c. Stipulation of interest in a contract of loan.
d. Contract of agency.
20. A solemn or formal contract has the following essential elements:
a. consent of the contracting parties, object certain and cause or consideration.
b. consent of the contracting parties, object certain, cause or consideration and delivery of the object.
c. consent of the contracting parties, object certain, cause or consideration and formalities required by
law.
d. consent of the contracting parties, object certain, delivery of the object, and formalities required
by law.
21. On May 1, 2019, S offered to sell a specific car to B for P500,000.00. B sent his letter of acceptance to S on
May 8, 2019. On May 10, 2019, however, S died in a vehicular accident and his secretary received the letter
of acceptance on May 12, 2019 unaware that S had already di ed.
a. The contract was perfected on May 8, 2019 when B sent his letter of acceptance.
b. The contract was perfected on May 12, 2019 when the secretary of S received the letter of acceptance.
c. The contract was not perfected because the offer of S became ineffective when he died.
d. The contract was perfected on May 1, 2019 because the acceptance made by B on May 8, 2019
retroacts to the date of the offer.
22. Under this theory, the contract is perfected at the moment when the acceptance is declared or made by the
offeree:
a. Theory of concession
b. Theory of cognition
c. Gennosenshaft theory
d. Theory of manifestation
23. Dante borrowed P15,000,000.00 from Carlos. Dante died without having paid his loan obligation to Carlos.
He left Santos and Marlon his heir properties worth P12,000,000.00.
a. Santos and Marlon is liable to Carlos for P7,500,000.00 each.
b. The estate of Dante is liable to Carlos for P12,000,000 and Santos and Marlon is liable to Carlos for
P1,500,000.00 each.
c. Santos and Marlon must deliver the properties worth P12,000,000 to Dante and to pay the balance of
P3,000,000 with their separate property in solidum.
d. Santos and Marlon must deliver the properties worth P12,000,000 to Carlos.
24. Sisa defrauded Booba in making the latter believe that the ring he is selling is gold and diamond when in
fact, it is copper and glass. On the other hand, Booba defrauded Sisa in paying him P200,000 in fake
Philippine currency. Which of these statements is correct?
a. Sisa can go to court for the annulment of the contract so that the ring will be returned to him.
b. Booba can go to court so that his fake money will be restored to him.
c. Neither Sisa nor Booba can go to court since they are both guilty of fraud.
d. All the statements are not correct.

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