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Homework 2 – Law1101 – Topic Contract Part 2

1. The following, except one, are the characteristics of void or inexistent contract. Which is the
exception?
a. They are not subject to ratification
b. The right to raise defense of illegality cannot be waived.
c. The defense of illegality of the contract is available to third persons whose interest is not
directly affected.
d. The action or defense for declaration of the nullity or inexistence of the contract does not
prescribe.
2. S sometime in 2014 sold to B a house and lot where the former committed fraud. The deed of sale
which was in a public document was registered with the Register of Deeds in 2015 In 2017, the
fraud was discovered by the heirs of B. Under the Law, the action to annul a contract based on
fraud must be filed within four (4) years from:
a. Year 2014 the date of the contract
b. Year 2015 the date of registration with the Register of Deeds.
c. Year 2017 the date the fraud was discovered.
d. The action to annul a contract based on fraud is not subject to prescription.
3. Mistake in three of the following will make a contract voidable. Which one will not?
a. Mistake as to the substance of the thing which is the object of the contract.
b. Mistake as to the principal conditions which principally moved one or both parties to enter
into the contract.
c. Mistake as to the identity or qualifications of one of the parties, which identity or
qualifications have been the principal cause of the contract.
d. Simple mistake of account.
4. Statute of Frauds is applicable to
a. partially executed contract
b. oral contract of loan when the amount involved is less than P500
c. contract not to be performed within, a year from the making thereof
d. all of the above.
5. The Statute of Frauds applies only to:
a. wholly executed contracts.
b. contracts wholly or partially executed on the part of the debtor.
c. contracts wholly or partially executed on the part of the creditor,
d. wholly executory contracts.
6. The presence of a vice of consent vitiates the consent of a party in a contract and this renders the
contract (2011 Bar)
a. Rescissible c. Voidable
b. Unenforceable d. Void.
7. When bilateral contracts are vitiated with vices of consent, they are rendered (2011 Bar)
a. rescissible c. unenforceable
b. void d. voidable
8. S, an employee of a private company, sold his car for P100,000.00 to B, whom he knew was only
17 years old. S delivered the car to B who immediately paid the amount of P100,000.00. Later, S
was transferred to another branch of his employer which was quite a distance from his residence.
He wanted to get back the car from B so that will have something to use in going to and from his
new office. Neither B nor his guardian has registered the sale with the Land Transportation Office.
a. S can file an action to annul the sale he made to B because he was mistaken in selling the car
which he realized he badly needed.
b. S can ask the court to annul the sale because B was a minor when the contract of sale was
entered into.
c. Only B, when he attains the age of majority, or his guardian, while B is still a minor, can bring
an action to annul the contract.
d. The minority of B has no effect on the validity of the contract since the parties entered into the
contract of sale freely.
9. The Statute of Frauds applies only to:
a. wholly executed contracts.
b. contracts wholly or partially executed on the part of the debtor.
c. contracts wholly or partially executed on the part of the creditor,
d. wholly executory contracts.
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10. Severino, orally sold a one-square meter lot for P475.00 to Benedicto, chairman of Barangay
Mapayapa, who was officially authorized in a barangay resolution to look for and buy a lot where
the barangay would construct a barangay marker. Since Benedicto did not have sufficient cash at
that time, he told Severino that he would give the amount the following day. The next day,
Benedicto went to the place of Severino to pay the price of the lot but Severino refused to accept
it, saying that the sale is unenforceable not being in writing.
a. The sale of the lot is enforceable although not in writing because the price is less than
P500.00.
b. The sale is enforceable because Benedicto was duly authorized to buy the lot through a
resolution which is in writing.
c. The sale of the lot is void not being in a public instrument.
d. The sale is unenforceable since the sale of real property must be in writing regardless of
the price to be enforceable.
11. One of the following statements concerning ratification of a voidable contract is false. Which is it?
a. Ratification extinguishes the action to annul a voidable contract.
b. Ratification cleanses the contract from all its defects from the moment it was constituted.
c. Ratification requires the conformity of the party who has no right to bring the action for
annulment.
d. Ratification may be made by the guardian of the incapacitated person, or the incapacitated
person upon attaining capacity, or the party whose consent was vitiated.
12. The following agreements are covered by the Statute of Fraud. Choose the exception.
a. An oral agreement which by its terms is not to be performed within one year from the making
thereof.
b. An oral special promise to answer for the debt, default or miscarriage of another.
c. An oral agreement in consideration of marriage.
d. An oral contract of partnership where the contribution in money or personal property amounts
to P3,000 or more.
e. None of the above.
13. Caloy the guardian of Martinez bought a fertilizer for land cultivation from Jonas for P400,000 but
the market value is only P320,000. The contract is:
a. Rescissible c. Unenforceable
b. Voidable d. Valid
14. S sold his only car for P100,000.00 to B. Unknown to S, B bought the car from him so that he
could use the same in a bank robbery. What is the status of the sale of the car by S to B?
a. The sale is void because the motive of B is illegal.
b. The sale is valid because the illegality of the motive of the parties to the contract does not have
any effect on its validity.
c. The sale is voidable because of the failure of disclose his motive to S.
d. The sale is rescissible at the instance of S would be damaged by the illegal motive of B.
15. A piece of land was the subject of a litigation between Mariano and City of Manila. After the case
had been decided in favor of Mariano, he sold it to Bugaring.
a. The sale can be rescinded because the subject matter is the subject of litigation
b. The sale cannot be rescinded because the litigation had been decided in favor of Mariano prior
to the sale.
c. The sale can be rescinded because it is considered an act to defraud creditor.
d. The sale cannot be rescinded because disposition of the things under litigation without the
approval of the litigant or competent court is not ground for rescission to prosper.
16. Angelita Madaya, guardian of Nene Batambata, a minor, sold the palay harvested from the land
belonging to Nene Batambata for P39,000.00 on January 15, 2013. The palay had a value of
P80,000.00. At the time of the sale, Nene Batambata was only seventeen (17) years and 354 days
old. On July 25, 2017, Nene wants to recover the damages he suffered under the contract entered
into by his guardian. What is the remedy available to Nene Batambata?
a. Annulment because Nene Batambata was only 17 years and 354 days old at the time the sale
was made by Angelita Madaya.
b. Rescission because Nene Batambata suffered lesion of P41,000.00.
c. Both rescission and annulment at the option of Nene Batambata.
d. Nene batambata cannot rescind nor annul the contract.
17. The defective contracts arranged according to the degree of their defectiveness from the least
defective to the most defective are:
a. voidable, rescissible, unenforceable, and void contracts.
b. rescissible, unenforceable, voidable, and void contracts
c. rescissible, voidable, unenforceable, and void contracts
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 d. unenforceable, rescissible, voidable, and void contracts
18. Orencia is the owner of a car which was sold by Say without authorization in favor of Billy. The
contract between Say and Billy in so far as Orencia is concerned is:
a. Valid c. Unenforceable
b. Rescissible d. Voidable
19. The action for annulment must be brought within four years. Which of the following is false with
respect to the reckoning of the beginning of the prescriptive period?
a. In cases of intimidation, violence and undue influence, the period begins from the time the
defect in the consent ceases.
b. In case of fraud, the period begins to run from the discovery thereof.
c. In case of mistake, the period begins to run from the time it was committed.
d. In cases of contracts entered into by minors or other incapacitated persons, the period runs
from the time guardianship ceases.
20. O agreed to transfer to I, verbally, a residential lot in consideration of a service or benefit already
rendered by the latter in favor of the former. Which of these is correct?
a. The agreement being verbal involving real property is unenforceable and therefore cannot be
sued upon in court.
b. The verbal agreement is enforceable because it is not covered by the Statute of Fraud.
c. The law requires the agreement to be in writing at least since it involves real property.
d. The transaction is covered by the Statute of Fraud because it involves the sale of real property
or any interest therein.
21. Which of the following contracts cannot be ratified?
a. Those whose cause or object did not exist at the time of the transaction.
b. Unathorized contracts
c. Those where both parties are incapable of giving consent.
d. Those that fail to comply with the Statute of Frauds.
22. A voidable contract:
a. Contract agreed to in state of drunkenness
b. Contract agreed to during hypnotic spell
c. Contract where consent is given through undue influence
d. All of the above
23. Which of the following is not covered by statute of fraud?
I – Oral contracts for a piece of work to be performed after fifteen (15) months from the date of
perfection of the contract.
II – Oral sale of personal computer worth P50,000
III – Oral sale of real property worth P20,000
IV – Sale of Real property in private writing worth P100,000.
a. I, III and IV
b. I II, and IV
c. I and IV
d. IV only
24. To defraud his creditor Carlo, Melody sold his condominium unit to Jane. When Carlo is now
collecting his credit, Orlando lent Melody enough money to cover all his debt with Carlo. The sale
of the Condominium unit:
a. The sale cannot be rescinded because Carlo can collect the claim due him.
b. The sale can be rescinded because this is an act to defraud the creditor
c. The sale cannot be rescinded because there is no vices of consent.
d. The sale can be rescinded on the ground that the sale was undertaken in fraud of creditor Carlo
when the latter cannot in any other manner collect the claims due them.
25. Which of the following contracts cannot be ratified?
a. Those whose cause or object did not exist at the time of the transaction.
b. Unathorized contracts
c. Those where both parties are incapable of giving consent.
d. Those that fail to comply with the Statute of Frauds.
26. An agreement in restraint of trade:
a. Perfectly valid c. Unenforceable
b. Voidable d. Void
27. Rescission of contract can take place in this case?
a. When the things which are the object of the contracted are legally in the possession of third
persons who acted in bad faith.
b. When he demands rescission can return whatever he may be obliged to restore.
c. When the party seeking resolution can perform only as to part and rescind as to remainder.
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 d. When the seller cannot return the installments paid to him by the buyer.
28. A intimidated B to marry A’s daughter. After a year, B would like to file action for annulment but
could not do so because A was around to intimidate him. The marriage contract is:
a. Rescissible c. Void
b. Voidable d. Unenforceable
29. The following, except one, are the characteristics of void or inexistent contract. Which is the
exception?
a. The defense of illegality of the contract is available to third persons whose interest is not
directly affected.
b. They are not subject to ratification
c. The right to raise defense of illegality cannot be waived.
d. The action or defense for declaration of the nullity or inexistence of the contract does not
prescribe.
30. Statement 1: A contract whose cause or object did not exist at the time of the transaction is a
defective contract which cannot be remedied by providing a cause or object as the case may be in
the contract.
Statement 2: The nullity of the accessory obligation or of the penal clause does carries with it the
nullity of the principal obligation which remains in force and demandable. Determine whether:
a. Statement I is true but statement II is false.
b. Both statement are false.
c. Statement I is false but Statement II is true.
d. Both statements are true.
31. Andy is the representative of Babes, an absentee sells a house and lot valued at P100,000 for only
P60,000. The contract is:
a. Valid d. Unenforceable
b. Rescissble e. Void
c. Voidable
32. Which of the following contracts is not void ab initio?
a. That whose object is outside the commerce of men.
b. That whose object did not exist at the time of transaction.
c. That which contemplates an impossible service.
d. That which is undertaken is fraud of creditors.
33. Contracts which cannot be sued upon unless ratified, thus it is as if they have no effect yet, are:
a. Voidable c. void
b. Rescissible d. unenforceable
34. Contracts entered into a state of drunkenness or during a hypnotic spell are:
a. Void c. Voidable
b. Valid d. Legal
35. Reluctantly and against her good sense and judgment, Rosemarie entered for the delivery of 5
tables to Corazon for a price of P15,000. Contract is:
a. Void c. Unenforceable
b. Voidable d. Valid

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