OBLIGATIONS AND CONTRACTS SEATWORK

This is individual work to be submitted this Friday May 8, 2015.

1.
Baldomero leased his house with a telephone to Jose. The lease contract provided
that Jose shall pay for all electricity, water and telephone services in the leased premises
during the period of the lease. Six m onths later. Jose surreptitiously vacated the
premises. He left behind unpaid telephone bills for overseas telephone calls amounting to
over P20,000.00. Baldomero refused to pay the said bills on the ground that Jose had
already substituted him as the customer of the telephone company. The latter maintained
that Baldomero remained as his customer as far as their service contract was concerned,
notwithstanding the lease contract between Baldomero and Jose. Who is correct,
Baldomero or the telephone company? Explain. (10 pts.)
2.
In December 1985, Salvador and the Star Semiconductor Company (SSC)
executed a Deed of Conditional Sale wherein the former agreed to sell his 2,000 square
meter lot in Cainta, Rizal, to the latter for the price of P1,000,000.00, payable
P100,000.00 down, and the balance 60 days after the squatters in the property have been
removed. If the squatters are not removed within six months, the P100,000.00 down
payment shall be returned by the vendor to the vendee. Salvador filed ejectment suits
against the squatters, but in spite of the decisions in his favor, the squatters still would not
leave. In August, 1986, Salvador offered to return the P100,000.00 down payment to the
vendee, on the ground that he is unable to remove the squatters on the property. SSC
refused to accept the money and demanded that Salvador execute a deed of absolute sale
of the property in its favor, at which time it will pay the balance of the price. Incidentally,
the value of the land had doubled by that time. Salvador consigned the P 100,000.00 in
court, and filed an action for rescission of the deed of conditional sale, plus damages.
Will the action prosper? Explain. (10 pts.)
3.
Printado is engaged in the printing business. Suplico supplies printing paper to
Printado pursuant to an order agreement under which Suplico binds himself to deliver the
same volume of paper every month for a period of 18 months, with Printado in turn
agreeing to pay within 60 days after each delivery. Suplico has been faithfully delivering
under the order agreement for 10 months but thereafter stopped doing so, because
Printado has not made any payment at all. Printado has also a standing contract with
publisher Publico for the printing of 10,000 volumes of school textbooks. Suplico was
aware of said printing contract. After printing 1,000 volumes, Printado also fails to
perform under its printing contract with Publico. Suplico sues Printado for the value of
the unpaid deliveries under their order agreement. At the same time Publico sues Printado
for damages for breach of contract with respect to their own printing agreement. In the
suit filed by Suplico, Printado counters that:
(a) Suplico cannot demand payment for deliveries made under their order agreement until
Suplico has completed performance under said contract;
(b) Suplico should pay damages for breach of contract; and
(c) with Publico should be liable for Printados breach of his contract with Publico
because the order agreement between Suplico and Printado was for the benefit of Publico.
Are the contentions of Printado tenable?
Explain your answers as to each contention.
(15 pts.)
4.
Marvin offered to construct the house of Carlos for a very reasonable price of
P900,000.00, giving the latter 10 days within which to accept or reject the offer. On the
fifth day, before Carlos could make up his mind, Marvin withdrew his offer.

a) What is the effect of the withdrawal of Marvin's offer?

b.)
Will your answer be the same if Carlos paid Marvin P10,000.00 as consideration
for that option? Explain.
c.)
Supposing that Carlos accepted the offer before Marvin could communicate his
withdrawal thereof? Discuss the legal consequences. (15 pts.)
5.
Roland, a basketball star, was under contract for one year to play-for-play
exclusively for Lady Love, Inc. However, even before the basketball season could open,
he was offered a more attractive pay plus fringes benefits by Sweet Taste, Inc. Roland
accepted the offer and transferred to Sweet Taste. Lady Love sues Roland and Sweet
Taste for breach of contract. Defendants claim that the restriction to play for Lady Love
alone is void, hence, unenforceable, as it constitutes an undue interference with the right
of Rolandto enter into contracts and the impairment of his freedom to play and enjoy
basketball. Can Roland be bound by the contract he entered into with Lady Love or can
he disregard the same? Is he liable at all? How about Sweet Taste? Is it liable to Lady
Love? (10 pts.)
6.
X, who has a savings deposit with Y Bank in the sum of P1,000,000.00 incurs a
loan obligation with the said Bank in the sum of P800.000.00 which has become due.
When X tries to withdraw his deposit, Y Bank allows only P200.000.00 to be withdrawn,
less service charges, claiming that compensation has extinguished its obligation under the
savings account to the concurrent amount of X's debt. X contends that compensation is
improper when one of the debts, as here, arises from a contract of deposit. Assuming that
the promissory note signed by X to evidence the loan does not provide for compensation
between said loan and his savings deposit, who is correct? (10 pts.)
7.
Dino sued Ben for damages because the latter had failed to deliver the antique
Marcedes Benz car Dino had purchased from Ben, which wasby agreementdue for
delivery on December 31, 1993. Ben, in his answer to Dino's complaint, said Dino's
claim has no basis for the suit, because as the car was being driven to be delivered to
Dino on January 1, 1994, a reckless truck driver had rammed into the Mercedes Benz.
The trial court dismissed Dino's complaint, saying Ben's obligation had indeed, been
extinguished by force majeure. Is the trial court correct? (10 pts.)
8.
In 1971, Able Construction, Inc. entered into a contractwith Tropical Home
Developers, Inc. whereby the former would build for the latter the houses within its
subdivision. The cost of each house, labor and materials included, was P100,000.00. Four
hundred units were to be constructed within five years. In 1973, Able found that it could
no longer continue with the job due to the increase in the price of oil and its derivatives
and the concomitant worldwide spiraling of prices of all commodities, including basic
raw materials required for the construction of the houses. The cost of development had
risen to unanticipated levels and to such a degree that the conditions and factors, which
formed the original basis of the contract had been totally changed. Able brought suit
against Tropical Homes praying that the Court relieve it of its obligation. Is Able
Construction entitled to the relief sought? (10 pts.)
9.
In 1978, Bobby borrowed Pl,000,000.00 from Chito payable in two years. The
loan, which was evidenced by a promissory note, was secured by a mortgage on real
property. No action was filed by Chito to collect the loan or to foreclose the mortgage.
But in 1991, Bobby, without receiving any amount from Chito, executed another
promissory note which was worded exactly as the 1978 promissory note, except for the
date thereof, which was the date of its execution. 1) Can Chito demand payment on the
1991 promissory note in 1994? 2) Can Chito foreclose the real estate mortgage if Bobby
fails to make good his obligation under the 1991 promissory note? (10 pts.)