OBLICON

1. When bilateral contracts are vitiated with vices of consent, they are rendered
a. Voidable b. void c. rescissible d. unenforceable

2. (1) Demand by the creditor shall not be necessary in order that delay may exist when demand
would be useless, as when the obligor has rendered it beyond his power to perform. (2) However,
demand is still necessary even though there is an express stipulation in the contract to that effect

a. Statement 1 is true, statement 2 is false

b. Statement 1 is false, statement 2 is true
c. Both statements are true
d. Both statements are false

3. (1) In an alternative obligation, the debtor is alternatively bound by different prestation, but the
complete performance of one of them is sufficient to extinguish the obligations while in facultative
obligation, only one prestation is due but the debtor may render another substitution. (2) In both
obligations, the loss of the thing due extinguishes the obligation.

a. Statement 1 is true, statement 2 is false

b. Statement 1 is false, statement 2 is true
c. Both statements are true
d. Both statements are false

4. (1) The presence of a resolutory condition in an obligation immediately vests the contemplated
rights unto the creditor. (2) However, upon the happening of the condition, the obligation is
considered as if it did not exist.

a. Statement 1 is true, statement 2 is false

b. Statement 1 is false, statement 2 is true
c. Both statements are true
d. Both statements are false

5. (1) The condition is not an essential element of the obligation. (2) Once the suspensive condition
has been fulfilled, the effects of conditional obligation to give shall retroact to the date of the
constitution of the obligation.

a. Statement 1 is true, statement 2 is false

b. Statement 1 is false, statement 2 is true
c. Both statements are true
d. Both statements are false
6. (1) When we say joint obligation, it is one in which each of the debtors is liable for the entire
obligation and each of the creditors is entitled to demand the satisfaction of the whole obligation
from any of all the debtors. A solidary obligation, however, is one where the entire obligation is to
be paid or performed proportionately by the debtors.’

a. Statement 1 is true, statement 2 is false

b. Statement 1 is false, statement 2 is true
c. Both statements are true
d. Both statements are false

7. (1) Absolute simulation of a contract takes place when the parties conceal their true agreement
while relative simulation is when the parties do not intend to be bound at all by the contract. (2)
An absolutely simulated or fictitious contract is void while a relative simulation, subject to certain
conditions may bind the parties to their real agreement.

a. Statement 1 is true, statement 2 is false

b. Statement 1 is false, statement 2 is true
c. Both statements are true
d. Both statements are false

8. For novation to be valid, there are essential requisites. Which of the following is not?

i. There must be a previous valid obligation.

ii. The extinguishment or modification of the old obligation, and the creation of a
new one or a modified version may be made unilaterally by one of the parties.
iii. The validity of a new obligation.
a. i
b. ii
c. iii
d. none

9. Which of the following actions are meritorious?

a. A defense in an action for ejectment that the lessor verbally promised to extend or renew the
lease.
b. A defense in an action for damages that the debtor has sufficient, but unliquidated assets to
satisfy the credit acquired when it becomes due.
c. An action for payment of sum of money filed against one who orally promised to answer
another’s debt in case the latter defaults.
d. An action for recovert of downpayment paid under a rescinded oral sale of real property
10. Upon the proposal of a third person, a new debtor substituted the original debtor without the
consent of the latter. The creditor accepted the substitution. Later, however, the new debtor
became insolvent and defaulted in his obligation. What is the effect of the new debtor’s default
upon the original debtor?

a. The original debtor shall pay or perform the obligations with recourse to the new debtor
b. The original debtor remains liable since he gave no consent to the substitution.
c. The original debtor shall pay or perform 50% of the obligation to avoid unjust enrichment on
his part.
d. The original debtor is freed of liability since novation took place and this relieved him of his
obligation.

11. Byson deposited his goods in the warehouse of Bella with an obligation to pay P100,000.00
monthly. Bella on the other hand, borrowed P500,000.00 from Byson. Byson failed to pay Bella his
obligation for the month of May. Can Bella rescind her contract of loan with Byson?

a. Yes, because non-payment of the price agreed upon is a resolutory condition for which the
remedy is rescission with damages. Byson allowed Bella to borrow P500,000.00 because she
allowed him to use her warehouse. The obligations are dependent on each other.
b. Yes, because their contracts are reciprocal.
c. No, because the obligations are not reciprocal. The obligation of Byson is based on deposit
while Bella’s is based on loan.
d. No, because Bella should have filed a case of specific performance first.

12. Which of the following is not a source of obligation?

a. Law b. crime c. mistake d. tort

13. 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 of the heirs are not bound by the contracts. This
is known as the principle of

a. Freedom to stipulate
b. Obligatory force of contracts
c. Relativity of contracts
d. Mutuality of contracts
14. Barney brought a land from Ted, paying him cash. Since they were friends, they did not execute
any document of sale. Seven years later, the heirs of Barney asked Ted to execute a deed of
absolute sale to formalize the verbal sale to their father. Ted, however, showed unwillingness to
comply, so the heirs of Barney filed an action for specific performance against Ted. Will their action
prosper?

a. Yes, since Barney brought the land and paid Ted for it.
b. Yes, after full payment, the action became imprescriptible
c. No, after more than 6 years, the action to enforce the verbal agreement has already elapsed.
d. No, since the sale cannot, under the Statute of Frauds, be enforced.

15. Mario borrowed money from Luigi an amount of P700,000.00 payable when his Mario kart
business becomes successful. Unfortunately, Mario suffered loss leading to closure of his business.
Luigi demands payment of P700,000.00 from Mario. Is Luigi correct in this case?

a. Yes, because the condition of the obligation becomes impossible, thus becoming immediately
demandable.
b. Yes, because Mario is now insolvent, and Luigi must register his claim immediately.
c. No, because the court must set first the period when they pay.
d. No, because the obligation of Mario to pay is subject to the suspensive condition that the
business becomes successful.

16. Rudolf borrowed P1M from Rodrigo and Fernando who acted as solidary creditors. When the loan
matured, Rodrigo wrote a letter to Rudolf, demanding payment of the loan directly to him. Before
Rudolf could comply, Fernando went to see him personally to collect and he paid him. Did Rudolf
make a valid payment?

a. No, since Rudolf should have split the payment between Rodrigo and Fernando
b. No, since Rodrigo, the other solidary creditor, already made a prior demand for payment from
Rudolf.
c. Yes, since the payment covers the whole obligation.
d. Yes, since Fernando was a solidary creditor, payment to him extinguished the obligation.

17. Jack and Jill are siblings. Jaworski is the son of Jack. Jillian is the daughter of Jill. The siblings own
a property located in Apalit, Pampanga. Sometime in 1993, Jack sold his portion of the property
to Jill. In the year 2023, when both Jack and Jill are already dead, Jaworski filed a case for quieting
of title against Jillian, and he is claiming that the sale between his father and his aunt was void.
While the case is pending, Jillian sold the property to Jade. The sale is without the knowledge and
approval of the court or of Jaworski. The contract of sale between Jillian and Jade is

a. Void b. Voidable c. rescissible d. unenforceable

18. Chanyeol owes Baekhyun P50,000.00. In relation thereto, Chanyeol executed a promissory note
wherein she promised to pay Baekhyun the amount of the loan ninety days from the date of the
 promissory note. The date of the note is April 30, 2023. When does the loan become due and
demandable?

a. July 30, 2023 b. September 7, 2023 c. July 28, 2023 d. July 29, 2023

19. A is the creditor of B. B is the creditor of C. A filed a complaint for collection of sum of money
against B. Upon motion of A, the court issued a writ of garnishment against B. The writ was served
upon C, the debtor of B. Despite the service of the writ to C, he still paid what he owes to B. A now
filed a motion before court to compel C To pay. May C be compelled to pay?

a. Yes, because he is the agent of B

b. Yes, because he paid B without the consent of A and the court, thus making the payment
invalid.
c. No, because C is not a party to the case filed against B and thus, can validly pay to B what he
owes to the latter.
d. No, because real and lawful creditor of C is B, and thus, payment should be made to the latter.
20. Dylan bought Dexter's property through Charles, an agent empowered with a special power of
attorney (SPA) to sell the same. When Dylan was ready to pay as scheduled, Dexter called, directing
Dylan to pay directly to him. On learning of this, Charles, Dexter's agent, told Dylan to pay through
him as his SPA provided and to protect his commission. Faced with two claimants, Dylan consigned
the payment in court. Dexter protested, contending that the consignation is ineffective since no
tender of payment was made to him. Is he correct?

a. No, since consignation without tender of payment is allowed in the face of the conflicting
claims on the plaintiff.
b. Yes, as owner of the property sold, Dexter can demand payment directly to himself.
c. Yes, since Dylan made no announcement of the tender.
d. Yes, a tender of payment is required for a valid consignation.

PARTNERSHIP
(1) In the absence of any agreement as to the distribution of the profits and losses, the capitalist partner
is liable for the loses in the same proportion to what he may have contributed and any stipulation to
the contrary shall be void. (2) An industrial partner, on the other hand, shall not be liable for the losses.
a. First sentence true, second sentence false.
b. First sentence false, second sentence true.
c. Both sentences true.
 d. Both sentences false.

(1) Husband and wife may validly form a universal partnership. (2) They are prohibited from forming a
limited partnership.

a. First sentence is true, second sentence is false.

b. First sentence is false, second sentence is true.
c. Both sentences are true.
d. Both sentences are false.

(1) An industrial partner contributes industry to the partnership. (2) He can engage in any kind of business
for himself unless prohibited by the articles of partnership
a. First sentence true, second sentence false.
b. First sentence false, second sentence true.
c. Both sentences true.
d. Both sentences false.

(1) Loss of a specific thing contributed before or after delivery if only the use of such is contributed does
not dissolve the partnership. (2) The partnership is also dissolved by the loss of the thing
notwithstanding that the same occurs after the partnership has acquired the ownership thereof.
a. First sentence true, second sentence false.
b. First sentence false, second sentence true.
c. Both sentences true.
d. Both sentences false.

(1) A partner who has undertaken to contribute a sum of money and fails to do so becomes a debtor for
the interest and damages from the time he should have complied with his obligation. (2) Demand is,
however, necessary to make the partner in default.

a. First sentence true, second sentence false.

b. First sentence false, second sentence true.
c. Both sentences true.
d. Both sentences false.

(1) A partner who has undertaken to contribute a sum of money and fails to do so becomes a debtor for
the interest and damages from the time he should have complied with his obligation. (2) Demand is,
however, necessary to make the partner in default.

a. First sentence true, second sentence false.

b. First sentence false, second sentence true.
c. Both sentences true.
d. Both sentences false.
Dielle, Karlo and Una are general partners in a merchandising firm. Having contributed equal amounts to
the capital, they also agree on equal distribution of whatever net profit is realized per fiscal period. After
two years of operation, however, Una conveys her whole interest in the partnership to Justine, without
the knowledge and consent of Dielle and Karlo.

TRUE OR FALSE: Justine cannot interfere or participate in the management or administration of the
partnership business or affairs. She may, also receive the net profits to which Una would have otherwise
been entitled.

a. First sentence is true, second sentence is false.

b. First sentence is false, second sentence is true.
c. Both sentences are true.
d. Both sentences are false

The liability of the partners, including industrial partners for partnership contracts entered into in its name
and for its account, when all partnership assets have been exhausted is

a. a. Pro-rata b. solidary c. Joint d. Voluntary

Arlyn, Bryan and Charlie entered into a partnership to operate a restaurant business. When the restaurant
had gone past break-even stage and started to gamer considerable profits, Charlie died. Arlyn and Bryan
continued business without dissolving the partnership. They in fact opened a branch of the restaurant,
incurring obligation in the process. Creditors started demanding for the payment of their obligations. Who
are liable for the settlement of the partnership's obligations?

a. The managing partner because he runs the day-to-day business of the partnership
b. The estate of the deceased partner because there is a need to settle all the assets and liabilities,
or debts, that the person had when they died.
c. The two remaining partners because they continued the business without settlement of the
accounts as between the deceased or his estate.
d. The partnership assets because these are creditors of the partnership and not of the partners.

Yao, a private investigator, is the industrial partner of Ming-Yao partnership. Ming on the other hand is its
capitalist partner. Their partnership is involved in private detective services. Subsequently, Ming, also
entered into another partnership agreement with Chen under the name Ming-Chen security services.
Ming-Chen's business involves providing security services to various establishments in the country. Yao
now wants to dissolve their partnership on the ground that Ming has engaged into another partnership
with Chen. Is Yao's contention correct?

a. Yes, the capitalist partner can only engage in another business if with express consent of the other
partners
b. No, the capitalist partner is only prohibited from engaging in any other business if the nature of
the same is similar to the kind of business in which the partnership is engaged in.
 c. Yes, under the law, Ming can be expelled from the partnership by reason thereof.
d. d. No, the capitalist partner shall bring to the common fund any profits and personally bear the
losses, but he cannot be expelled from the partnership by reason thereof.

X and Y are partners in a shop offering portrait painting. Y provided the capital and the marketing while X
was the portrait artist. They accepted the PS0,000.00 payment of Kyla to do her portrait but X passed away
without being able to do it. Can Kyla demand that Y deliver the portrait she had paid for because she was
dealing the with business establishment and not with the artist personally?

a. Yes, because Y can still make the portait.

b. Yes, because each partner is an agent of the partnership and of each other
c. No, because the death of X has the effect of dissolving the partnership.
d. No, because Y is a managing partner and not an industrial partner,

Cheng, Huan and Sean are the partners. Their partnership, CHS is engaged in the importation of raw
materials for the production of processed food products. Neil owns Nie Food Products (NFP), a sole
proprietorship which is a client of CHS. NFP owes CHS raw materials in the amount of P90,000.00. It also
has an outstanding obligation to Cheng, Huan and Sean in the amount of P90,000.00 by way of a Contract
of Loan with the three partners as joint creditors. Both obligations are due to be paid on October 20, 2022.
On October 20, 2022, Neil paid to Cheng the amount of P100,000.00. Cheng in turn gave a receipt to Neil
acknowledging that the money owed by Neil to him, to Huan and to Sean had been fully paid. He then
distributed the payment among himself, Huan and Sean. Is the contention of Cheng correct?

a. Yes, because Neil paid the money directly to him, and he has the obligation under the law to give
to his co-creditors the amount entitled to them.
b. No, because Cheng, being a joint creditor, is only entitled to the amount of P30,000.00.
c. Yes, because the obligation owed by Neil to Cheng, Huan and Sean is more onerous than the
obligation owed to CHS.
d. No, because the sum collected should have been applied to the credit of Cheng and that of CHS,
in proportion to their amounts.

The property rights of a every partner are the following, EXCEPT:

a. His right in specific partnership property

b. His right to be an attorney-in-fact of the partnership
c. His interest in the partnership
d. His right to participate in the management.

CORPORATIONS
The amount fixed in the Articles of Incorporation to be subscribed and paid by the stockholders of the
corporation.

a. Authorized Capital Stock

b. Subscribed Capital
c. Paid-up Capital Outstanding Capital Stock
 d. Outstanding Capital Stock

There is no minimum authorized capital stock required under the Revised Corporation Code. There is,
however, a minimum subscribed capital and no minimum paid-up capital.

a. First sentence true, second sentence false.

b. First sentence false, second sentence true.
c. Both sentences true.
d. Both sentences false.

53. Treasury Shares are those so provided in the articles of incorporation that may be purchased or taken
up by the corporation upon the expiration of a fixed period. regardless of the existence of URE in the books
of the corporation and upon such other terms and conditions as may be stated in the AOI which must also
be stated in the certificate of stock representing the shares. Redeemable Shares are those which have
been issued and fully paid for but subsequently reacquired by the issuing corporation by purchase,
redemption, donation or through some other lawful means, and which may again be disposed of for a
reasonable price fixed by the BOD

a. First sentence true, second sentence false.

b. First sentence false, second sentence true.
c. Both sentences true.
d. Both sentences false.

The remaining directors can fill up vacancies in the Board of Directors notwithstanding the cause of the
vacancy. In case of vacancies arising from resignation or death of director, the remaining directors should
constitute a quorum before they can act on filling up such vacancies.

a. First sentence true, second sentence false.

b. b. First sentence false, second sentence true.
c. Both sentences true.
d. Both sentences false.

Xavier is a Filipino immigrant residing in Sacramento, California. Yaya, is a Filipino residing in Quezon City,
Philippines. Zyron is a resident alien residing in Makati City. GGG Corporation is a domestic corporation -
40% owned by foreigners and 60% owned by Filipinos, with Tyler as authorized representative. CCC
Corporation is a foreign corporation registered with the Philippine Securities and Exchange Commission.
KKK Corporation is a domestic corporation (100%) Filipino owned. Sharon is a Filipino, 16 years of age, and
the daughter of Yaya. Who can be incorporators?

a. Only Yaya can be an incorporator

b. Only Yaya and Zyron can be incorporators
c. Xavier, Yaya, Zyron and Tyler could be incorporators
d. Xavier, Yaya, Zyron, Tyler and Sharon and corporations GGG, CCC and KKK can be incorporators

The Emergency Board can be created only if the remaining Directors/Trustees can still constitute a quorum.
The temporary replacement can come from stockholders other than the officers of the corporation;
 a. First sentence true, second sentence false.
b. First sentence false, second sentence true.
c. Both sentences true.
d. Both sentences false.

Which of the following is false?

i. Treasury shares have voting rights notwithstanding that they are still in the treasury of the
corporation
ii. Fractional shares can be voted.
iii. Preferred or redeemable shares cannot be deprived of the right to vote.

a. All of the sentences are false

b. Only i and ii
c. c. Only i and ii
d. d. only ii and iii

Who are corporators?

a. A person who invites investors and subscribers before the formation and organization of a
corporation. Contracts entered into by a promoter are called pre-incorporation subscriptions.
b. Members of the governing board of a stock corporation while trustees, non- stock corporation.
c. A person who has interest in a corporation by reason of his investment therein.
d. Those who compose a corporation, whether as stockholders or as members.

In case of merger, all constituent corporations are dissolved and a single, pew corporation emerges. All
assets and liabilities are acquired by the surviving corporation.

a. First sentence true, second sentence false.

b. First sentence false, second sentence true.
c. Both sentences true.
d. Both sentences false.

Xavier is a Filipino immigrant residing in Sacramento, California. Yaya is a Filipino residing in Quezon City,
Philippines. Zyron is a resident alien residing in Makati City. GGG Corporation is a domestic corporation -
40% owned by foreigners and 60% owned by Filipinos, with Tyler as authorized representative. CCC
Corporation is a foreign corporation registered with the Philippine Securities and Exchange Commission.
KKK Corporation is a domestic corporation (100%) Filipino owned. Sharon is a Filipino. 16 years of age, and
the daughter of Yaya. Who can be subscribers?

a. Only Yaya can be a subscriber

b. Only Yaya and Zyron can be subscribers
c. Xavier, Yaya, Zyron and Tyler could be subscribers
d. All individuals except for Sharon and all of the corporations can be subscribers.

LAW3
A warranty inherent in a contract of sale, whether or not mentioned in it, is known as the

a. warranty on quality
b. warranty against hidden defects
c. warranty against eviction
d. warranty in merchantability

The meal time (lunch break) for the dining crew in Glorious Restaurant is either from 10 a.m. to 11 a.m.
or from 1:30 p.m. to 2:30 p.m. with pay. But the management wants to change the mealtime to 11: a.m.
to 12 noon or 12:30 p.m. to 1:30p.m. without pay. Will the change be legal?

a. Yes, absent an agreement to the contrary, the management determines work hours and by law
meal break is without pay.
b. No, because lunchbreak regardless of time should be with pay.
c. Yes, the management has control of its operations.
d. No, because existing practice cannot be discounted unilaterally.

In a true pacto de retro sale, the title and ownership of the property sold are immediately vested in the
vendee a retro subject only to the resolutory condition of repurchase by the vendor a retro within the
stipulated period. This is known as

a. equitable mortgage
b. conventional redemption
c. legal redemption
d. equity of redemption

Suspicious transactions are transactions with covered institutions, regardless of the amounts involved,
where any of the following circumstances exist, EXCEPT:

a. There is no underlying legal or trade obligation, purpose or economic justification

b. The client is not properly identified
c. The amount involved is commensurate with the business or financial capacity of the client
d. The transaction is in a way related to an unlawful activity or offense under the Act that is about
to be, is being or has been committe

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
b. Voidable
c. Rescissible
d. Void

A bank deposit may be inquired into in the following cases EXCEPT:

 a. A Committee of the House of Representatives
b. When there is a written permission of the depositor or investor
c. Impeachment cases
d. Report of banks to Anti-Money Laundering Council of covered and/or suspicious transactions

A covered transaction is a transaction in cash or other equivalent monetary instrument involving a total
amount of more than P500,000.00 within one banking day. Suspicious transactions are transactions with
covered institutions, regardless of the amounts involved, where any of the circumstances enumerated in
the law exist.

a. First sentence true, second sentence false.

b. First sentence false, second sentence true.
c. Both sentences true.
d. Both sentences false.

Suspicious transactions are transactions with covered institutions, regardless of the amounts involved,
where any of the following circumstances exist, EXCEPT:

a. There is no underlying legal or trade obligation, purpose or economic justification

b. The client is not properly identified
c. The amount involved is commensurate with the business or financial capacity of the client
d. The transaction is in a way related to an unlawful activity or offense under the Act that is about
to be, is being or has been committed

An employee proved to have been illegally dismissed is entitled to reinstatement and full backwages
computed on the basis of his:

a. Basic salary plus the regular allowance and the thirteenth month pay.
b. Basic salary plus the salary CBA increases during the pendency of his case.
c. Basic salary plus the increases mandated by wage orders issued during the pendency of his case.
d. Basic salary at the time of dismissal.