Junior Philippine Institute of Accountants

Revamped and Reimagined Project Ulikid

Commercial Law
Pre-qualifying Exams
April 28, 2023

➷ Multiple Choice with Solutions

1. This element is known as the viniculum juris of the obligation.

a. Active subject
b. Passive subject
c. Efficient cause
d. Prestation

2. Statement 1: Obligations derived from law are not presumed.

Statement 2: Obligations arising from contracts have the force of law between the contracting
parties
a. Only statement 1 is true.
b. Only statement 2 is true.
c. Both statements are true.
d. Both statements are false.

3. Any waiver for an action for future fraud is .

a. Valid
b. Valid, if agreed upon by debtor and creditor
c. Voidable, if it shows vitiation of consent on the part of the party waiving
d. Void

4. Mora accipiendi is .
a. Delay on the part of the debtor
b. Delay on the part of the creditor
c. Mutual delay on both the debtor and creditor on separate unilateral obligations
d. Mutual delay on both the debtor and creditor on reciprocal obligations

5. The following are the requisites for application of payment, except:

a. There is only one debtor.
b. There are several debts.
c. The debts are of different kinds.
d. There is only one and the same creditor.

6. If the (1) object is lost through fortuitous event (2)

substitution, then the obligation is (3) . Which of the following choices would make the
statement FALSE.
a. (1) principal; (2) before; (3) not extinguished
b. (1) substitute; (2) before; (3) not extinguished
c. (1) principal; (2) after; (3) not extinguished
d. (1) substitute; (2) after; (3) extinguished

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 Junior Philippine Institute of Accountants
Revamped and Reimagined Project Ulikid
Commercial Law
Pre-qualifying Exams
April 28, 2023

7. The following are not modes of extinguishing an obligation, except;

a. When the obligor accepts the performance, with knowledge of its incompleteness or
irregularity, without protest.
b. Loss of a generic thing.
c. Merger that took place between the principal debtor and principal creditor.
d. Prescription of a written contract after 6 years.

8. Which of the following differentiates a quasi-delict from a crime?

a. It violates a private right.
b. It must be proven by a proof beyond reasonable doubt.
c. Liabilities arising from it (e.g. fines) can never be compromised except for criminal
negligence.
d. The name of the related case would be People of the Philippines vs. the accused.

9. Which of the following is not a source of obligations?

a. Law
b. Contracts
c. Quasi-law
d. Quasi-contracts

10. This is defined as everything which is produced by a thing, or which is incorporated or attached
thereto, excluding fruits.
a. Accessions
b. Accessories
c. Accessants
d. Accessibles

11. Shelly is indebted to Sandy for ₱500,000. Sunny, a third party, paid ₱300,000, with the consent of
Shelly. Subsequently, Shelly became insolvent and only has ₱300,000, who shall be entitled
thereto?
a. Sunny will be entitled to the entire ₱300,000.
b. Sandy will be entitled to ₱200,000 while Sunny is entitled to the remaining ₱100,000.
c. Both Sandy and Sunny will be entitled equally with ₱150,000 each.
d. Both Sandy and Sunny will be entitled proportionately with ₱120,000 to Sandy and
₱180,000 to Sunny.

12. In which instances does a debtor lose the benefit of the period?
a. When the debtor becomes insolvent and he gives a guaranty for the debt.
b. When the creditor demands that a security be given to him, but the debtor refuses to do
so.
c. When the debtor violates any undertaking, in consideration of which the creditor agreed
to the period.
d. When the debtor suffers civil interdiction.

This document is strictly private, confidential, and should not be shared to any third party.
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 Junior Philippine Institute of Accountants
Revamped and Reimagined Project Ulikid
Commercial Law
Pre-qualifying Exams
April 28, 2023

13. It arises when there is a voluntary management of the property or affairs of another without
knowledge or consent of the latter.
a. Solutio indebiti
b. Caso fortuito
c. Constitutum possessorium
d. Negotiorum giesto

14. Alpha was indebted to Beta for ₱200,000. Alpha later on paid ₱50,000 and on the receipt issued
by Beta, he wrote, “The remaining balance of ₱150,000 shall be condoned.” Three days later,
Beta died and his heirs sought the collection of the remaining balance of ₱150,000. However,
Alpha argued that such was already condoned by Beta. Is Alpha correct?
a. Yes, since the condonation is in writing.
b. Yes, since the issuance of the receipt to Alpha constitutes implied acceptance.
c. No, the value of the debt is greater than ₱5,000, thus, it should be in a public document.
d. No, the acceptance must be in writing.

15. X, V, and I issued a promissory note stating, “We promise to pay L and C ₱180,000 on December
31, 2021.” On December 31, 2021, how much can L collect from V?
a. ₱30,000
b. ₱60,000
c. ₱90,000
d. ₱180,000

16. Monica, Tuscany, and Wesley solidarity bound themselves to pay Arthur ₱75,000 through the use
of a promissory note. Subsequently, Arthur endorsed the note to Frieda, who in turn endorsed the
note to Santos, who endorsed the note back to Wesley. What is the effect of the endorsement to
Wesley?
a. The obligation is totally extinguished with Wesley having the right of reimbursement.
b. The obligation is partially extinguished as Monica and Tuscany still have to pay Arthur.
c. The obligation is partially extinguished as Monica and Tuscany still have to pay Frieda.
d. The obligation is partially extinguished as Monica and Tuscany still have to pay Wesley.

17. Can legal subrogation exist without the debtor’s knowledge?

a. No.
b. Yes, when a third person not interested in the obligation pays.
c. Yes, when a third person pays with the tacit approval of the debtor.
d. Yes, when a creditor less preferred pays a creditor which is more preferred.

18. Samsung has a checking account at BDO Unibank with a positive balance of ₱900,000.
Samsung borrowed a non interest bearing loan ₱900,000 from the same bank. At the maturity of
the loan, the obligation is extinguished by what mode?
a. Condonation
b. Merger
c. Compensation
d. Delegacion

This document is strictly private, confidential, and should not be shared to any third party.
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 Junior Philippine Institute of Accountants
Revamped and Reimagined Project Ulikid
Commercial Law
Pre-qualifying Exams
April 28, 2023

19. Morticia, Gomez, and Wednesday, a minor, wrote a promissory note stating, “I promise to pay
₱90,000 to Weems.” How much may Weems validly collect from Wednesday if Gomez becomes
insolvent.
a. ₱90,000
b. ₱30,000
c. ₱45,000
d. Insofar as Wednesday was benefited by the loan.

20. Valix bought Ballada’s property through De Leon, an agent empowered with a special power of
attorney (SPA) to sell the same. When the payment was due, Ballada called, directing Valix to pay
directly to him. On learning of this, De Leon, the agent, told Valix to pay through him as his SPA
provided and to protect his commission. Faced with two claimants, Valix consigned the payment
in court. Ballad protested, claiming that no tender of payment was made, thus, the consignation is
ineffective. Is Ballada correct?
a. No, since there are multiple claims, consignation without tender of payment is valid.
b. Yes, as the owner of the property, he has the right to demand payment.
c. Yes, since Allan made no announcement of the tender.
d. Yes, since tender of payment is required for a valid consignation.

21. Which of the following statements best describes a principal contract?

a. It is a contract whose existence depends upon another contract. The examples are
contracts of pledge, of chattel mortgage, antichresis, guarantee or real estate mortgage
which is dependent upon the principal contract of loan.
b. It is a contract which serves as a means by which other contracts may be entered into
such as contracts of agency and partnership.
c. It is a contract that can stand by itself such as contracts of sale and loan.
d. It is a contract which has a name under the Civil Code or special law such as contracts of
sale, loan and barter.

22. The following are the essential elements of a real contract, except;
a. Consent of outside parties
b. Object certain which is the subject matter of the contract
c. Cause of the obligation which is established
d. Delivery of the subject matter

23. The following are consensual contracts, except;

a. Contract of lease
b. Contract of donation
c. Contract of partnership
d. Contract of sale

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 Junior Philippine Institute of Accountants
Revamped and Reimagined Project Ulikid
Commercial Law
Pre-qualifying Exams
April 28, 2023

24. Which of the following is true with regards to the perfection of a contract?
a. A real contract is a contract perfected by the meeting of minds of the contracting parties.
b. A consensual contract is a contract perfected by the delivery of the object of contract.
c. A solemn contract is a contract perfected by the execution of the formality required by
law.
d. Contract of donation of personal property in excess of P5,000 is an example of a real
contract, thus, the delivery of the donation is the perfection of the contract.

25. Which of the following is false with regards to the classification of contracts?
a. A contract of partnership is a principal contract.
b. A contract of sale is a commutative contract.
c. A contract of insurance is an aleatory contract.
d. A contract of lease is a bilateral contract.

26. This is the stage of a contract when the parties perform their obligations.
a. Perfection
b. Consummation
c. Preparation
d. Conception

27. Accion pauliana is a remedy availed of by:

a. A ward who suffered lesion.
b. An absentee who suffered lesion.
c. A creditor who was defrauded.
d. A minor who was defrauded.

28. The following are false with regards of the principle of consent, except;
a. Consent is manifested by the meeting of the offer and the acceptance upon the thing or
the cause which are to constitute the contract.
b. The offer must be certain and the acceptance qualified.
c. A qualified acceptance constitutes a counter-offer.
d. Consent must be expressed.

29. It refers to the promise or conduct to be performed in the fulfillment or rendition of the obligations
of contract and it may consist of giving, doing or not doing a thing
a. Cause
b. Object
c. Consent
d. Delivery

This document is strictly private, confidential, and should not be shared to any third party.
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 Junior Philippine Institute of Accountants
Revamped and Reimagined Project Ulikid
Commercial Law
Pre-qualifying Exams
April 28, 2023

30. It refers to the immediate and proximate purpose of the contract or the essential reason which
impels the contracting parties to enter into it and which explains and justifies the creation of the
obligation through such contract.
a. Cause
b. Object
c. Consent
d. Delivery

31. The following are true with regards to the principles concerning cause, except;
a. The statement of a false cause in contracts shall render them void, if it should not be
proved that they were founded upon another cause which is true and lawful.
b. Although the cause is not stated in the contract, it is presumed that it exists and is lawful,
unless the debtor proves the contrary.
c. As a general rule, lesion or inadequacy of cause invalidates a contract.
d. The particular motives of the parties in entering into a contract are different from the
cause thereof.

32. The following are instances wherein reformation of the contract is the proper remedy.\, except;
a. When a mutual mistake of the parties results in the failure of the instrument to disclose
their real agreement.
b. When through ignorance, lack of skill, negligence or bad faith on the part of the person
drafting the instrument or of the clerk or typist, the instrument does not express the true
intention of the parties.
c. If one party was mistaken and the other acted fraudulently or inequitably in such a way
that the instrument does not show their true intention.
d. All three choices can be remedied by reformation.

33. Which of the following is false with regards to defective contracts?

a. Rescissible contract is a defective contract that is valid and binding until rescinded.
b. Voidable contract is a defective contract that is not valid but binding until annulled.
c. Unenforceable contract is a defective contract that is valid although not binding until
ratified.
d. Void contract is a defective contract that is not valid and therefore not binding.

34. The following are true with regards to voidable contracts, except;
a. It is a contract where one of the parties is incapable of giving consent to a contract.
b. The prescriptive period of an action for annulment is 4 years.
c. A contract where the consent is vitiated by fraud, undue influence, mistake, intimidation
or violence.
d. All of the following are true with regards to voidable contracts.

This document is strictly private, confidential, and should not be shared to any third party.
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 Junior Philippine Institute of Accountants
Revamped and Reimagined Project Ulikid
Commercial Law
Pre-qualifying Exams
April 28, 2023

35. Statement 1: Oral executory contracts that fail to comply with the Statute of Frauds are examples
of an unenforceable contract.
Statement 2: Absolutely simulated contracts are void.
a. Only statement 1 is true.
b. Only statement 2 is true.
c. Both statements are true.
d. Both statements are false.

36. Which of the following contracts may be ratified?

I. Rescissible contracts.
II. Voidable contracts
III. Unenforceable contracts
IV. Void Contracts
a. III only
b. II and III.
c. I, II, and III.
d. !, II, III, and !V.

37. X, who was abroad, phoned his brother, Y, authorizing him to sell X’s parcel of land in Pasay. X
sent the title to Y by courier service. Acting for his brother, Y executed a notarized deed of
absolute sale of the land to Z after receiving payment. What is the status of the sale?
a. Valid, since a notarized deed of absolute sale covered the transaction and full payment
was made.
b. Void, since X should have authorized agent Y in writing to sell the land.
c. Valid, since Y was truly his brother X’s agent and entrusted with the title needed to effect
the sale.
d. Valid, since the buyer could file an action to compel X to execute a deed of sale.

38. Mr. A orally sold his specific land to Mr. B at a selling price of P499. The delivery and payment will
be made after two months. On the agreed date of performance of contract, Mr A did not perform
his obligation. What is the remedy available to Mr. B?
a. File an action for specific performance
b. He has no remedy.
c. File an action to compel Mr. A to execute a written contract
d. File an action for declaration of nullity

39. G, the guardian of M, a minor, leased a real property of M for three months at a monthly rent of
P1,000 when the prevailing monthly rent is P1,500. What is the status of the contract of lease?
a. Rescissible
b. Voidable
c. Unenforceable
d. Void

This document is strictly private, confidential, and should not be shared to any third party.
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 Junior Philippine Institute of Accountants
Revamped and Reimagined Project Ulikid
Commercial Law
Pre-qualifying Exams
April 28, 2023

40. S and B orally agreed on the sale of a specific house and lot at a price of P100,000 with the
delivery to be made after full payment of price. On the date of oral agreement, B paid an earnest
money of P20,000 with the balance to be made after one month. On the maturity date of the
balance of P80,000, B tendered the P80,000 Philippine peso bills to S who refused such
payment. Which of the following statements is correct?
a. B may legally compel S to sign the notarized deed of sale.
b. The contract of sale is unenforceable.
c. The contract of sale is void.
d. S may refuse to sign the notarized deed of sale.

41. What is the role of negotiable instruments in commercial transactions?

a. To limit the use of credit transactions
b. To replace physical currency
c. To reduce the need for financial records
d. To increase the purchasing medium in circulation

42. Which of the following is not a type of negotiable instrument?

a. Invoice
b. Bill of exchange
c. Check
d. Promissory note

43. What is the most important feature of negotiable instruments?

a. Negotiability
b. Accumulation of secondary contracts
c. Limited or restricted transferability
d. None of the above

44. What is a bona fide holder free from?

a. Real defenses
b. Personal defenses available to prior parties among themselves
c. Both A and B
d. None of the above

45. According to the Negotiable Instruments Law, when is a promise considered unconditional?
a. When it includes an attorney's fee in case of installment default
b. When it has an indication of a particular fund
c. When it is unqualified
d. When it is payable only through installments

46. What is the rule mentioned in section 13 with regards to an undated instrument?
a. Any holder may insert the true date of issue or acceptance and the instrument shall be
payable accordingly.
b. The instrument shall be considered null and void.
c. The true date of issue or acceptance can only be inserted by the issuer.
d. The instrument shall be payable on the last day of the year.
This document is strictly private, confidential, and should not be shared to any third party.
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 Junior Philippine Institute of Accountants
Revamped and Reimagined Project Ulikid
Commercial Law
Pre-qualifying Exams
April 28, 2023

47. When does a contract on a negotiable instrument become effectual?

a. Upon signing the document
b. Upon receiving payment
c. Upon delivery of the instrument
d. Upon a notary public's approval

48. In case of conflict between written and printed provisions, which provision prevails?
a. Written
b. Printed
c. Uncertain
d. To be determined by the court

49. Which of the following statements regarding negotiability of an instrument payable upon a
contingency is correct?
a. It is not negotiable and the happening of the event does not cure the defect
b. It is negotiable only after the happening of the event
c. It is negotiable even before the happening of the event
d. It is not negotiable but the happening of the event cures the defect

50. Which of the following is required to be stated in a negotiable instrument in order for its validity
and negotiable to be unimpaired?
a. Date of issuance
b. Kind of currency to be used
c. Consideration in certain cases
d. Place where it is payable

51. What is the principle mentioned in the passage about filling up blanks on an instrument?
a. The person in possession can complete it with prima facie authority
b. Anyone can fill the blanks as they please
c. The instrument must not have any blanks
d. Only lawyers can fill up blanks on instruments

52. If an instrument provides for the payment of interest, without specifying the date from which
interest is to run, when does the interest start?
a. When the principal amount is paid
b. When the creditor requests for it
c. From a specified later date
d. From the date of the instrument

53. Is a person liable on an instrument if their signature does not appear thereon?
a. Yes, except in certain cases
b. Yes, but only if the instrument is endorsed
c. Yes, always
d. No

This document is strictly private, confidential, and should not be shared to any third party.
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 Junior Philippine Institute of Accountants
Revamped and Reimagined Project Ulikid
Commercial Law
Pre-qualifying Exams
April 28, 2023

54. What is the effect of a forged signature on a negotiable instrument?

a. It retains its validity
b. It becomes binding on all parties
c. It is wholly inoperative
d. It acquires legal force

55. What does every negotiable instrument presumed to have?

a. Valuable consideration
b. Simple contract
c. Government approval
d. Legal interpretation

56. When is a holder deemed a holder for value?

a. When the instrument is deemed valuable by a court
b. When the instrument is payable at a future date
c. When value has been given for the instrument at any time
d. When the holder has a personal relationship with the issuer

57. Is partial failure of consideration a defense?

a. Yes, in full
b. Yes, as much as the case requires
c. Only if it is an unliquidated amount
d. No, it is not allowed by law

58. What is an accommodation party?

a. Someone who agrees to pay off someone else's debts
b. Someone who agrees to lend money to an issuer
c. Someone who receives value but does not sign the instrument
d. Someone who signs the instrument as the issuer without receiving value

59. What is the effect of want of consideration?

a. Automatically makes the instrument enforceable
b. Creates a binding agreement
c. Stipulates the payment terms
d. Matter of defense against any person not a holder in due course

60. What is an accommodation party liable for on the instrument they signed?
a. Liability only to the person they lent their name to
b. Liability to a holder for value, even if the holder knew they were only an accommodation
party
c. Liability only to the issuer of the instrument
d. No liability at all

This document is strictly private, confidential, and should not be shared to any third party.
Any violation of this clause gives JPIA - USLS the right to seek legal recourse.
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