NATIONAL COLLEGE OF BUSINESS AND ARTS

Cubao-Fairview-Taytay
SECOND SEMESTER SY 2015-2016

MID-TERM DEPARTMENTAL EXAMINATIONS 2 HRS

BUSINESS LAW 4 SALES, AGENCY, LABOR & OTHER COMMERCIAL LAWS

INSTRUCTIONS: Select the correct answer for each of the following questions. Mark only one answer
for each item by shading the corresponding letter of your choice on the answer sheet provided.
STRICTLY NO ERASURES ALLOWED. Use Pencil No. 2 only.

1. Which of the following is true?

A. If the consideration of the contract consists partly in money and partly in another thing, it shall
be considered a barter if the value of the thing given as a part of the consideration exceeds
the amount of the money or its equivalent
B. A guardian cannot purchase the property of the ward unless consent of ward is given
C. If the price is uncertain sale is unenforceable
D. The creditors of the vendor cannot make use of the right of redemption against the vendee,
until they have exhausted the property of the vendor.

2. Which of the following is false?

A. The husband and the wife cannot sell property to each other.
B. Actual delivery of the thing or payment of the price is not required for the perfection of the
sale.
C. A sale is consummated upon delivery of the thing and the payment of the purchase price.
D. Whenever option money is given in a contract of sale, it shall be considered as part of the
price and as proof of perfection of the contract.

3. Which of the following is false?

A. A contract to sell, even if accepted by the buyer is not an absolute sale.
B. Bilateral promise to sell is binding on the promissory even if the promise is not supported by a
consideration distinct from the price of the sale.
C. Sales through letters or telegrams are deemed perfected only when acceptance by the buyer
has been received by the seller.
D. Sale, as a general rule, is an onerous and aleatory contract

4. Which of the following is false?

A. As a general rule in a contract of sale, ownership passes to the buyer upon actual or
constructive delivery.
B. In a contract for a piece of work, the goods are manufactured for a specific person
C. Dacion en pago is governed by the law on sales.
D. Agents cannot acquire by purchase, even at a public auction, either in person or thru the
mediation of another, the property whose administration or sale may have been entrusted to
them, although the consent of the principal has been given.

5. Which of the following is true?

A. The contract of agency is extinguished by the insanity of the agent but not of the principal.
B. The agent is expected to carry out an agency although its execution would manifestly result
in loss or damage to the principal.
C. Two persons authorizing an agent to sell a property on their behalf are liable jointly to the
agent.
D. Agency is presumed to be for a compensation, unless there is proof to the contrary.

6. Also known as barter

A. do ut des. C. faciout facias
B. faciout des. D. do ut facias

7. One of the following is not an alternative remedy available to a seller of personal property on
installment if buyer defaults.
A. To go to court and ask the court to order delivery of the property
B. To foreclose the chattel mortgage
C. To sue for specific performance
D. To take possession of the property and forfeit the amount paid by the buyer if stipulated
2 BUSINESS LAW 4 SALES, AGENCY, LABOR & OTHER COMMERCIAL LAWS

8. Ynna needs a size 8 of a nike shoes available to the public for her boyfriend Angelo, but the same
is not available so she placed an order for one. On the other hand, Angelo placed an order for size
6 of a ballet shoes for Ynna which is not ordinarily manufactured by the company. Which is
correct?
A. Both are contracts of sale
B. Both are contracts for a piece of work
C. First is a contract of sale, second is a contract for a piece of work
D. First is a contract for a piece of work, second is a contract of sale

9. Shares of stock sold may be delivered by:

A. actual traditio C. traditiobrevimanu
B. traditiolongamanu D. quasi-traditio

10. Atoy sold her specific car to Buboy for Php1M payable in 10 equal installments. Atoy delivered the
car to Buboy but a mortgage was constituted on the car to answer for the unpaid installments.
Buboy paid the first 4 installments but failed to pay the next 3 installments. Atoyforeclosed the
mortgaged property and sold it at public auction for P500,000. Which is correct?
A. Atoycan recover from Buboy the balance of P100,000 even if there is no stipulation to that
effect
B. Atoy can recover from Buboy the balance of P100,000 if there is stipulation to that effect
C. Atoy cannot recover the deficiency only if there is stipulation to that effect
D. Atoycannot recover the deficiency even if there is stipulation to the contrary

11. Caloy placed an order for 1,000 pieces white collared shirts ranging in size from small to extra-
large from T’s shirt corporation. The specified sizes, although not then available, are manufactured
by the said corporation and consigned to its sales outlets regularly. Their contract is:
A. Contract for a piece of work. C. Contract to sell
B. Contract of sale. D. Contract of agency to sell

12. When goods are delivered to the buyer on "sale or return" for a period of 15 days, ownership of the
good passes to the buyer upon:
A. delivery of the goods
B. expiration of 15 days
C. acceptance by the buyer of the offer of the seller
D. perfection of the contract

13. Digoy purchased from Epoy a parcel of land worth P600,000; P200,000 to be paid in cash and for
the difference, he will convey his car worth P400,000. What kind of contract is this?
A. Lease contract C. Contract to sell
B. Contract of sale D. Barter

14. 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 offerer in a unilateral promise to sell or to buy.
D. Given as a separate consideration from the purchase price.

15. Fely sold and delivered her Laptop to Gerlie. It was agreed upon that within 10 days Gerliewill
state and fix the price. On the 9th day, Gerlie called up Fely and stated the price at P20,000 to
which Fely 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.

16. Constructive delivery by execution of public instrument

A. tradition longa manu C. symbolical delivery
B. delivery thru legal formalities D. tradition brevi manu

17. From the perfection of the contract of sale, the fruits pertain to:
A. buyer C. guarantor
B. seller D. vendor

Page 2 of 6
3 BUSINESS LAW 4 SALES, AGENCY, LABOR & OTHER COMMERCIAL LAWS

18. An oral contract of sale involving an immovable property is:

A. voidable C. unenforceable
B. rescissible D. void or inexistent

19. The state's right to take away private property for public purposes upon payment of just
compensation, which is governed by special law:
A. Escheat. C. Eminent Domain
B. Expropriation. D. Police Power

20. A kind of constructive delivery:

A. traditio incorporeal C. traditiolongamanu
B. traditio actual D. traditio possession

21. A contract of sale whereby the seller acquires the right to redeem or repurchase the object of the
sale from the buyer after a certain period agreed upon
A. Equitable mortgage. C. Sale on sale or return
B. Absolute sale D. Pacto de retro sale

22. What mode of extinguishing a contract of sale is effected when a person is subrogated upon the
same terms and condition stipulated in the contract in the place of one who acquires a thing by
onerous title?
A. Compensation C. Novation
B. Conventional redemption. D. Legal redemption

23. X, Y and Z were appointed by A as his agents to administer his building which were rented by
various tenants while A was abroad. In the course of management, X caused through his fault
damage to the building which was assessed at P45,000. A can claim:
A. P 15,000 from each of X, Y and Z C. P45,000 from X.
B. P 45,000 from X and Y D. P45,000 from either X, Y or Z.

24. Which of the following is not a mode of extinguishing a contract of agency?

A. Dissolution of the firm or corporation which entrusted or accepted the agency
B. Death, civil interdiction or insanity of the agent
C. Withdrawal of the agent from the contract
D. Appointment of a substitute agent

25. This is the mandate given by the principal to the agent.

A. power C. option
B. authority D. discretion

26. The process of taking away private property for public purposes upon payment of just
compensation, which is governed by special law:
A. Escheat. C. Eminent Domain
B. Expropriation. D. Police Power

27. An oral contract of sale involving a wooden table sold for Php500
A. voidable B. unenforceable C. void or inexistent D. valid

28. Sale of young or offspring of animal not yet conceived at the time of perfection
A. voidable B. unenforceable C. void or inexistent D. valid

29. Sale of vain hope

A. voidable B. unenforceable C. void or inexistent D. valid

30. The sale of hope or expectancy

A. voidable B. unenforceable C. void or inexistent D. valid

31. When there is a stipulation that the repurchase of the thing sold can be made anytime, the right can
be exercised:
A. any time under the principle of autonomy or freedom of the parties to stipulate
B. within 10 years from the date of the contract
C. after 4 years from the date of delivery
D. within 4 years from the date of the contract

Page 3 of 6
4 BUSINESS LAW 4 SALES, AGENCY, LABOR & OTHER COMMERCIAL LAWS

32. X, Y and Z are co-owners of an undivided parcel of land. X sold his 1/3 interest to Z absolutely.
Which is correct?
A. Y may exercise his right of redemption on the interest sold by X to Z
B. Y cannot exercise the right of redemption because the sale was made in favor of a co-owner
C. The sale made by X to Z is void because it was not made in favor of a stranger
D. Y may redeem only ½ of the interest sold by X to Z

33. Using the preceding number, suppose, instead of selling his interest to Z, X sold it to A, who can
exercise the right of redemption?
A. Both Y and Z C. Y only
B. B. Y but not Z . D. X

34. There is dacion en pago when:

A. the object is always existing and specific
B. there is a greater degree of freedom in fixing the price
C. there is no pre-existing obligation
D. the cause is the price

35. Goods are deemed in transit

A. From the time they are delivered by the seller to a common carrier or other bailee for
transmission to the buyer, up to the time that the buyer or his agent takes delivery of the
goods from the carrier or bailee.
B. When the buyer intercepts and lawfully takes possession of the goods at any point before
destination
C. When the buyer accepts delivery of the goods upon arrival at destination
D. When the carrier or bailee, upon arrival of the goods at destination, acknowledges to the
buyer or his agent that he is holding the goods as bailee for the latter.

36. Warranty against hidden defect is:

A. essential element C. natural element
B. accidental element. D. common element

37. There is a contract of sale:

A. When the goods are delivered to a distributor on consignment
B. When the goods are delivered to a person on charge account.
C. When goods are delivered to an agent to be sold by him and the agent is not liable to the
manufacturer of the goods.
D. When the manufacturer delivers the goods to an agent where the former retains the ownership
and dictates the term of the sale.

38. Which of the following is not a characteristic of a contract of sale?

A. Bilateral C. Consensual
B. Gratuitous D. Nominate

39. In a contract of sale of personal property, the price of which is payable in installments, the vendor
may exercise any of the following remedies, except
A. Exact fulfillment of the obligation, should the vendee fail to pay any installment
B. Cancel the sale, should the vendee’s failure to pay cover two or more installments
C. Foreclose the chattel mortgage on the thing sold, if one has been constituted should
the vendee’s failure to pay cover two or more installments
D. Rescind the sale should the vendee fail to pay any installment.

40. Three of the following are elements of the vendor's right of stoppage in transitu. Which is the
exception?
A. The buyer must be insolvent.
B. The goods must be in transit.
C. The seller must be unpaid.
D. The seller must be in possession of the goods.

41. A sold to B orally a parcel of land for P200,000.00. Delivery was made of the land. The payment of
the price was to be made three (3) months later. At the end of the 3 month period
A. B may refuse to pay claiming in his defense the statute of frauds
B. B may return the parcel of land to A

Page 4 of 6
5 BUSINESS LAW 4 SALES, AGENCY, LABOR & OTHER COMMERCIAL LAWS
C. A can collect from B because the contract has already been executed
D. B may refuse to pay on the ground that there is no written contract to support the sale

42. If immovable property should have been sold to different vendees, the ownership shall be
transferred to the person
A. Who have first taken possession in good faith
B. Who presents the oldest title in good faith
C. Who in good faith first recorded it in the registry of property
D. Who have paid in good faith the purchase price in full

43. Quasi-traditio is equivalent to

A. Traditiolonga-manu. C. Traditioconstitutumpossessorium
B. Traditiobrevi-manu D. Execution of a public instrument

44. If redemption is made, which of the following will not be paid by the seller to the buyer:
A. Price paid by the buyer.
B. Expenses in the execution of the contract of sale paid by the buyer.
C. All necessary expenses on the thing sold and to be redeemed.
D. Interest on the price paid by the buyer.

45. Which of the following obligations of the vendor cannot be waived?

A. To warrant the right thing sold.
B. To transfer ownership to the buyer.
C. To allow the buyer to examine the goods sold.
D. To pay the expenses of the deed of sale.

46. The redhibitory action based on the faults if defects of animals must be brought within
A. 30 days from delivery to the vendee
B. 40 days from delivery to the vendee
C. 45 days from delivery to the vendee
D. 6 months from delivery to the vendee

47. A offered to sell for P12,000,000.00 her house and lot to B who was interested in buying the same.
In her letter to B, A stated that she is giving B a period of one month within which to raise the
amount and that as soon as B is ready, they will sign the deed of sale. Five days before the
expiration of the one month period, A went to B and told her that she is no longer willing to sell the
property unless the price is increased to P15,000,000.00. Which is correct?
A. B may compel A to accept the P12,000,000.00 first offered.
B. A may compel B to pay P15,000,000.00.
C. A and B should shoulder the P3,000,000.00 difference.
D. B cannot compel A to accept the P12,000,000.00 first offered.

48. On March 6, 2015, Angel sold for P1M her house and lot to Baby. It was agreed that delivery of the
house and lot and the payment therefore would be made on March 26, 2015. Unfortunately Cathy,
a stranger negligently set her house on fire on March 10, 2015, completely destroying other houses
including the house of Angel. Which is correct?
A. Baby is not required to pay the P1M since the contract had no subject matter.
B. Angel must still deliver the lot but is excused from delivering the house while Baby must still
pay the P1M.
C. Angel must still deliver the lot while Baby should pay only the amount equivalent to the value
of the lot.
D. Angel need not deliver the lot while Baby need not pay the P1M.

49. Judges cannot buy properties:

A. in litigation under their jurisdiction
B. owned by another lawyer
C. located within the city or municipally where he resides
D. of all kinds

50. Ownership of the thing sold is transferred/acquired/retained

A. Retained by the seller in ‘sale or return’
B. Transferred to the buyer upon constructive or actual delivery of the thing sold
C. Acquired by the buyer upon perfection of the contract
D. Transferred to the buyer upon acceptance of the price

Page 5 of 6
6 BUSINESS LAW 4 SALES, AGENCY, LABOR & OTHER COMMERCIAL LAWS
51. Henry took the diamond ring of Jerry without the latter's consent. Henry subsequently sold the
same to Kelly’s jewelry store. The store owner had no knowledge about the circumstances that
happened between Henry and Jerry. The store sold the same ring to Lenny. Jerry proceeded
against Lenny to recover the ring. Who has the better right over the ring?
A. Jerry. B. Henry. C. Kelly. D. Lenny

52. A sold his car to B binding himself not to sell the same to another person. On the following day, A
sold the same car to C who immediately took possession in good faith. In the case at bar, the
proper remedy of B is to:
A. Institute an action for the annulment of the sale against C.
B. Institute an action for the recovery of the car.
C. Institute an action for damages against A.
D. Institute an action for recovery of the car plus damages against C.

53. A sold to B his car and promised to deliver ten days later. The next day, after the sale to B, A sold
the same car to C and immediately effected delivery. On the day agreed upon, B did not deliver
the car to A. Which is correct?
A. B can cancel the contract between A and C, because the contract between A and B was
perfected ahead of the contract between A and C
B. B should make a demand to make A in default
C. A is liable to B for the value of the car plus damages after B makes a demand
D. A is liable to B for damages and is in default without need of any demand

54. A sold to B a parcel of land for P1M. The sale was evidenced by an agreement of sale written in
Cebuano dialect. One week later, A sold the same parcel of land to C for P2M which was
evidenced by a formal deed of sale. C who was aware of the previous sale immediately took
possession and registered the sale in his favor. Who is the rightful owner?
A. C because registration is higher in rank in law than possession or title
B. B because he has the older title
C. C because she took possession ahead of B
D. A under the principle of res perit domino

55. In a contract of sale of real property by lump sum, when there is a difference between the area and
the boundary:
A boundary prevails C. there must be another survey
B. area prevails D. contract is void

56. Agency which authorized only the performance of particular acts

A. Agency couched in specific terms. C. Implied agency.
B. Agency couched in general terms. D. Express agency.

57. If an agent contracts in the name of the principal exceeding his authority, the contract entered into
is:
A. voidable C. unenforceable
B. rescissible D. void or inexistent

58. Which of the following is not a fundamental obligation of an agent:

A. To subordinate his interest in favor of his principal if there is a conflict of interest.
B. To borrow if he is authorized to lend
C. To render an accounting of transactions
D. Not to carry out the agency, even if that is the instruction if he knew it would result in a loss or
damage to his principal

59. It is a contract wherein a person binds himself to render special service or to do something in
behalf of another with consent of the latter.
A. Contract of agency
B. Contract of exchange
C. Contract or a piece of work
D. Contract of service

60. Peter uses a savings account with a bank. The contract between Peter and the bank is one of:
A. Agency. B. Commodatum C. Deposit D. Mutuum
END OF EXAMINATION

Page 6 of 6