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Homework 1 – Law1301 – Topic Law on Sales – Part 2

1. The following items pertain to either a contract of sale or a contract to sell.

I. Ownership of the thing sold is transferred upon delivery
II. Ownership of the thing is transferred to the buyer some future time.
III. The risk of loss in on the buyer.
IV. The risk of loss is on the seller.
Based on the above data, which of the following is correct?
a. Items I and III pertain to a contract to sell.
b. Items II and III pertain to a contract to sell.
c. Items II and IV pertain to a contract of sale.
d. Items I and III pertain to a contract of sale.
2. Sony sells to Billy his 2013 Honda car, and leaves to Billy to determine the price. Billy refuses to fix
the price but took the car for his use. Which of the following statements is correct?
a. No sale, because the price is not fixed by the parties.
b. There is a sale; Billy must pay a reasonable price.
c. No sale until a third person fixes the price.
d. Sony may go to court and ask for damages.
3. If the price is uncertain
a. The transaction is void
b. The price is to be fixed by the court.
c. The sale is unenforceable
d. The buyer must pay a reasonable price
4. Three of the following are conditional sale. Which is the exception?
a. Sale of expectancy
b. Sale of a vain hope
c. Sale with a right to repurchase
d. Sale subject to a contingency
5. In one of the following cases, delivery of the goods to a carrier for the purpose of transmission to the
buyer transfers ownership to the latter. Which one is it?
a. When by the terms of the bill of lading, the goods are to be delivered to the seller or his agent.
b. When by the terms of the bill of lading, the goods are to be delivered to the order of the buyer or
his agent but the seller retains the bill of lading.
c. When the seller draws a bill of exchange on the buyer for the price of the goods and transmits such
bill of exchange and the bill of lading to the buyer to secure acceptance or payment of the bill of
exchange and the buyer dishonors the bill of exchange.
d. When the owner does not reserve the, right of possession or ownership of the thing sold
upon delivery to the carrier.
6. Solo sold to Bolo a specific car for P200,000 payable in four equal installments. Solo delivered the car
to Bolo but required Bolo to mortgage it back to Solo to answer for the unpaid installments. Bolo paid
the first installment, but the last three he failed to pay. Solo foreclosed the mortgaged property and
sold it at public auction for P130.000.
a. Solo can recover from Bolo the balance of P20.000.
b. Solo can recover from Bolo the balance of P20,000 if there is stipulation to that effect.
c. Solo cannot recover the deficiency anymore even if there is stipulation to that effect.
d. Solo can recover from Bolo part of the balance of P20.000.
7. Adel sold to Bella the former's horse for P50,000. No date is fixed by the parties for the performance
of their respective obligations. The obligation of Adel is
a. To deliver the horse immediately as there is a perfected contract.
b. To deliver the horse upon payment by Bella of P50,000.
c. To deliver the horse within a reasonable time of two months from the contract of sale.
d. To rescind the contract as there is no time fixed for the delivery and payment.
8. Can future inheritance be the subject of a contract of sale?
a. No, since it will put the predecessor at the risk of harm from a tempted buyer, contrary to public
policy.
b. Yes, since the death of the decedent is certain to occur.
c. No, since the seller owns no inheritance while his predecessor lives.
d. Yes, but on the condition that the amount of the inheritance can only be ascertained after the
obligations of the estate have been paid.

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9. Where the seller of goods has a voidable title thereto, but his title has not been avoided at the time of
the sale, the buyer acquires title to the goods. Such acquisition of title has the requisites, except:
a. the buyer must have bought the goods in good faith
b. the buyer must have bought them for value.
c. the buyer bought them without notice of the seller’s defect of title.
d. the party from whom the seller obtained the goods must ratify the sale.
10. S, the owner of a rent-a-car business, leased one of his cars to B for one month. On the day of the
expiration of the lease and while B was still in possession of the car, B offered to buy the car from S
for P200.000.00. Believing the price to be a good one, S readily accepted B's offer and then and there
executed a deed of absolute sale in favor of B who immediately paid the price in cash. Thereafter, B
drove away from place of S.
a. The delivery of the car by S to B is by constitutum possessorium.
b. The delivery of the car by S to B is by traditio tonga manu.
c. The delivery of the car by S to B is by traditio brevi manu.
d. There was no delivery because B should have turne over the possession of the car to S upon the
expiration of the lease so that S could make the proper delivery to him upon the execution of the
contract of sale.
11. In distinguishing Earnest Money from Option Money, Earnest Money is:
a. Given when there is no contract of sale.
b. Given only when there is a perfected contract of sale.
c. Given to bind the offeror in a unilateral promise to sell or buy.
d. Given as a separate consideration from the purchase price.
12. One of the following is not a remedy granted to an unpaid seller:
a. Right of stoppage of goods in transit
b. Right of lien over the goods
c. Right of resale.
d. Right to demand a security for the payment of the price.
13. A sold and delivered her diamond ring to B. It was agreed upon that within 10 days B will state and
fix the price. On the 10th day, B called up by telephone A and stated the price at P20,000 which A
agreed. Is the sale perfected?
a. No, at the time of the sale the price was not fixed.
b. Yes, at the time of the sale the price was already known.
c. Yes, the price stated and fixed by the buyer was accepted by the seller.
d. No, the price was left to the discretion of one of the parties.
14. The Recto Law is applicable
a. Sale of car on straight term
b. Sale of house on installment
c. Sale of car on installment where the buyer constituted a mortgage on his truck
d. In the foreclosure sale, should the vendee's failure to pay cover two or more installments.
15. A Seller sold to a Buyer a piece of jewelry at a price of P20,000. The contract provides that the Buyer
will pay the Seller cash of P15,000 and for the balance the Buyer will give the Seller a micro wave
oven worth P5,000. What is the nature of the contract?
a. Sale
b. Partly sale and partly barter.
c. Barter
d. Commodatum.
16. A sold to B a parcel of land for P30,000. The sale is evidenced by a memorandum of agreement of
sale written in Cebuano dialect. One week later, A sold the same parcel of land to C for P40,000
which was evidenced by a formal deed of sale. Upon buying the property, C, who was aware of the
first sale, immediately took possession of the land and registered the deed of sale in her favor with the
Register of Deeds. When informed of the second sale, B subsequently registered an adverse claim to
the property. The parcel of land shall belong to:
a. B, because she has got an older title
b. C, because the sale was made on a formal deed of sale
c. C, because she is the first to register the deed of sale
d. C, because she is the first to take possession of the land
17. Lino entered into a contract to sell with Ramon, undertaking to convey to the latter one of the five lots
he owns, without specifying which lot it was, for the price of P1 million. Later, the parties could not
agree which of five lots he owned Lino undertook to sell to Ramon. What is the standing of the
contract?
a. Unenforceable c. Rescissible
b. Voidable d. Void.

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18. G, a grocery goods supplier, sold 100 sacks of rice to H who promised to pay once he has sold all the
rice. H meantime delivered the goods to W, a warehouseman, who issued a warehouse receipt.
Without the knowledge of G and W, H negotiated the receipt to P who acquired it in good faith and for
value. P then claimed the goods from W, who released them. After the rice was loaded on a ship bound
for Manila, G invokes his right to stop the goods in transit due to his unpaid lien. Who has a better
right to the rice?
a. P, since he has superior rights as a purchaser for value and in good faith.
b. P, regardless of whether or not he is a purchaser for value and in good faith.
c. G, since as an unpaid seller, he has the right of stoppage in transitu.
d. W, since it appears that the warehouse charges have not been paid.
19. B called on S at the shoe factory of S for the latter to make a pair of shoes which B would be needing
in the play "Romeo Juliet." B provided S with the description of the pair of s he wanted since S did not
manufacture the kind of shoes needed. S quoted a price of P1,000.00 which B agree upon delivery to
him of the pair of shoes. Since S and B had been neighbors for a long time, their agreement was sealed
with a handshake.
a. The contract between S and B becomes enforceable if S had already completed making the pair of
shoes.
b. The contract between S and B becomes enforceable if B had already paid the amount agreed upon
for the work.
c. The contract between S and B is enforceable even if it is still executory.
d. The contract cannot be enforced by either party because it was not in writing.
20. A Seller sold to a Buyer a piece of jewelry at a price of P20,000. The contract provides that the Buyer
will pay the Seller cash of P15,000 and for the balance the Buyer will give the Seller a micro wave
oven worth P5,000. What is the nature of the contract?
a. Sale
b. Partly sale and partly barter.
c. Barter
d. Commodatum.
21. S and B entered into a contract whereby S transferred to B a specific car for the price of P200,000.00,
while B gave to S P90,000.00 in cash and a diamond ring worth P110,000.00. The heading of the
written contract signed by the parties reads "Contract of Sale".
a. The contract is void because the intention of the parties is void since the value of the diamond ring
is more than the monetary consideration given.
b. The contract is a valid contract of sale as intended by the parties regardless of whether the
monetary consideration is more or less than the value of the property consideration.
c. The contract is a valid contract of barter since the value of the property given is more than
the monetary consideration. The intention of the parties is immaterial.
d. The contract is partly a contract of barter and partly a contract of sale.
22. Consideration in sale:
1st- If the price is grossly inadequate the contract of sale is affected. And if the price is absolutely
simulated the contract is void.
2nd- The fixing of the price can never be left to the discretion of one of the parties. However, it may be
fixed by a third person.
a. Both are True c. 1st is True; 2nd is False
b. Both are False d. 1st is False; 2nd is
23. Unless there is a stipulation to the contrary the expenses for the execution or registration of the sale
shall be borne by:
a. The vendee
b. The vendor
c. The vendee and vendor
d. The agent or broker
24. A offered to sell his lot to B for P100,000. In his offer to sell it was stated that B is given 60 days to
prepare the P100,000 and as soon as B is ready with the money A will execute a deed of sale. Before
the end of 60 days A informed B that price of the lot was increased to P120,000. May B compel A to
accept P100,000 offered previously by A and make him execute the deed of sale?
a. Yes, because A had already his signed offer.
b. No, for B never signified his acceptance of A’s offer.
c. Yes because there was actual meeting of minds of the parties
d. Answers not any of the above.
25. In a sale, this is actual delivery.
a. Execution and signing of the sales document.
b. When the goods sold are placed in the control and possession of the buyer.

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 c. Delivery by the seller to the buyer of the key where the goods sold are kept.
d. The buyer is already in actual possession of the goods.
26. Mr. Ong leased to Mr. Santos a 5 KVA generator for two (2) years at a lease rental fee of P2,000 per
month and signed an option in favor of Mr. Santos to buy the generator at the end of the term of the
lease at P60,000. All rental fees paid are to be considered as partial payment of the sale. After 12
months, Mr. Santos was able to pay the rental fees for 9 months and was in arrears for the 3 months
rental fees. Mr. Ong terminated the lease contract and repossessed the generator. The consequence of
the transactions is: (Phil CPA, 89-2)
a. Mr. Ong can collect the rental fees for three (3) months which in arrears.
b. Mr. Ong can collect the rental fees for the unexpired 12 months of the lease contract.
c. When Mr. Santos took possession of the generator, he has no further action against Mr. Santos.
d. Mr. Ong in terminating the lease and repossessing the generator is obliged to refund the 9 months
rental fees paid by Mr. Santos.
27. In a sale, the buyer is entitled and has the right to the fruit of the thing sold from the time:
a. The obligation to deliver the thing sold arises.
b. The sale is perfected
c. The thing sold is delivered
d. The fruit of the thing sold is delivered.
28. In distinguishing Earnest Money from Option Money, Earnest Money is:
a. Given when there is no contract of sale.
b. Given only when there is a perfected contract of sale.
c. Given to bind the offeror in a unilateral promise to sell or buy.
d. Given as a separate consideration from the purchase price.
29. Which of the following may not be the object of sale?
a. Things having a potential existence
b. The sale of a vain hope or expectancy.
c. Future goods
d. Answer not given
30. When delivery takes place by the mere consent or agreement of the contracting parties as when the
vendor merely points to the thing sold which is thereafter be at the control and disposal of the vendee
if the things sold cannot be transferred to the possession of the vendee at the time of the sale, delivery
is affected:
a. By traditio symbolica
b. By traditio longa manu
c. By traditio brevi manu
d. Answer not given.

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