MCQs for Law on Contracts

1. These persons are bound by contracts: 7. When there is concurrence of offer and
a. Contracting parties acceptance, there is:
b. Assigns or Assign a. Payment
c. Heirs b. Revocation
d. All of them c. Consent
d. None of the above
2. Who is liable for the loss of the subject matter by
fortuitous event? 8. Essential requisites of a contract:
a. Creditor a. Consent
b. Debtor b. Cause
c. Both creditor and debtor c. Subject
d. None of them d. All of them

3. Contract that is made for a valuable 9. A contract where both parties are incapable of
consideration is: giving consent is:
a. Onerous a. Void
b. Gratuitous b. Voidable
c. Onerous and gratuitous c. Unenforceable
d. None of the them d. rescissible

4. 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. Resicissible
b. Voidable
c. Void
d. unenforceable
5. 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 interests are
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 their
nullity or inexistence of the contract does not
prescribe.
6. Example 1: G, guardian of W, sold W’s house
valued at P50,000 for P37,500 or a lesion by one-
fourth of the value
Example 2: S sold his house valued at P50,000 for
only P10,000 because S did not know the true
value of the house.
a. Both contracts are rescissible.
b. Only no. 1 is rescissible.
c. No. 2 is voidable because there is an error or
mistake.
d. Both contracts are valid and enforceable.
10. the stage of “conception” of a contract is:
a. When the contract is fully executed.
b. When the parties come to an agreement.
c. When negotiations are in progress.
d. When there is a meeting of the parties’ minds.
11. In order that fraud may make a contract
voidable,
a. It may be incidental but should have been
employed by both parties.
b. It should be serious and the parties must be in
pari delicto.
c. It should be serious and should not have
been employed by both contracting parties.
d. It may be incidental but both parties should not
be in pari delicto.
12. Simulation of Contract – Absolute or relative.
Relative when:
a. Parties are not bound at all.
b. The contract is void.
c. The parties conceal their true agreement.
d. None of the above.
13. Mr. Esguerra, a former government employee,
suffered from severe paranoia and was confined in
the mental hospital in 2001. After his release, he
was placed under the guardianship of his wife to
enable him to get his retirement pay. In 2004 he
became a mining prospector and sold the mining
claims. In 2007, he sued to annul the sale claiming
that he was mentally incapacitated at the time of
sale. The sale in question was:
a. Illegal
 MCQs for Law on Contracts

b. Void c. The contract is unenforceable but B is entitled to

c. Voidable damages the moment the publication is made.
d. valid d. Contract is void.
14. Which of the following contracts is enforceable
even if not executed in writing? 19. D owes C P10,000 payable on December 25.
a. Lease of personal property for 2 years. Later, D, through intimidation, was able to make C
b. An agreement for the sale of immovables. sign a promissory note stating that C is indebted to
c. Lease of immovables for a period longer that one D for the same amount. In here, D cannot be
year. required to pay C P10,000 because he (D) can set
d. A representation as to the credit of a third up compensation against C.
person. a. True
e. None of the above. b. False
c. Not sure
15. A contract where one of the parties is d. I don’t know
incapabale of giving consent is:
a. Resicissible 20. Valid until annulled unless there has been a
b. Voidable ratification:
c. Void a. Rescissible contract.
d. Unenforceable b. Inexistent contract.
e. None of the above. c. Voidable contract.
d. None of the above.
16. In three of the following defective contracts,
ratification cleanses the defects. Which is the 21. Contracts that cannot be sued upon unless
exception? ratified:
a. Both parties are incapable of giving consent. a. Voidable
b. Sale of immovable property or interest orally b. Unenforceable
entered into. c. Rescissible
c. Sale of a piece of land thru an agent, the d. None of the above
authority is oral.
d. Contracts entered into by a person who has 22. Which of the following contract is voidable?
been given no authority. a. Those whose object is outside the commerce of
men.
17. In a contract, as written, D promises to pay C b. Those that are absolutely fictitious.
P10,000 on September 15, 2012. The c. Those where one of the parties is
consideration received by D is not stated in the incapacitated.
contract. d. Those which contemplate an impossible service.
a. The contract is valid because the cause is
always presumed to exist. 23. The duty not to recover what has voluntarily
b. The contract is valid so long as it is in writing. been paid, although payment was no longer
c. The contract is valid because cause is not required:
essential to a contract. a. Natural obligation
d. The contract is void because the cause is not b. Moral obligation
stated. c. Civil obligation
d. None of the above
18. S entered into a contract with B by threatening
B that if B does not agree to make the contract, S 24. Which of the following contacts is voidable?
will publish defamatory matter concerning B’s wife. a. Those where both parties are incapable of giving
a. The contract is valid because the defamatory consent to a contract.
matter to be published does not relate to B, the b. Those undertaken in fraud of creditors when the
contracting party. latter cannot in any other manner collect the claims
b. The contract is voidable because such due them.
publication when carried out whether true or c. Those where the consent is vitiated by
not will cause a serious harm to B and his wife. mistake, violence, intimidation, undue influence
or fraud.
 MCQs for Law on Contracts
d. Those whose object is outside the commerce of
men.
25. Which of the following contract is rescissible?
a. Those where one of the parties is incapable of
giving consent to a contract.
b. Those where both parties are incapable of giving
consent to a contract.
c. Those which are entered into by guardians
whenever the wards whom they represent
suffer a lesion of more than ¼ of the value of
the object of the contract.
d. Those which are absolutely simulated or
fictitious.
26. Rescission of contract can take place in this
case:
a. When the things which are the object of the
contract are legally in the possession of third
persons who acted in good faith.
b. When he who 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.
d. When the seller cannot return the installments
paid to him by the buyer.
27. L entered into a contract of lease with X. T, the
clerk of L, typed the document. Due to T’s
negligence, the document made was that of sales
instead of lease.
a. The remedy is annulment.
b. Parties may go to court for interpretation.
c. Parties may enforce their right because it is
enforceable.
d. None of the above.
28. S owns an oil painting. Being in need of
money, S sold the painting to B for P1,000. After
the sale, S discovered that the painting was
valuable and worth P5,000.
a. S may rescind the contract on ground of lesion or
inadequacy of cause.
b. S may annul the contract on ground of fraud.
c. S may annul the contract on ground of error.
d. B is entitled to the benefit of the contract
because it is valid and binding.
29. G was appointed guardian of S, the latter being
16 years old. S sold his parcel of land in writing to
B valued at P100,000 for P75,000, suffering lesion
by ¼ of the value. What is the status of the
contract?
a. Rescissible
b. Unenforceable
c. Enforceable
d. voidable
30. A appoints B to sell his land.
Example No. 1: If the authority of B is oral and B
sells the land in writing, the sale is valid.
Example No. 2: If the authority of B is in writing and
B sells the land orally, the sale is valid. Which of
the following is correct?
a. First example is false but second example is
true.
b. Both examples are true.
c. Both examples are false.
d. First example is true but second example is
false.
31. Three of the following contracts are void.
Which is the exception?
a Sale of animal suffering from contagious disease.
b. Contract where the cause is immoral.
c. Relatively simulated contract.
d. Will pay you P10,000 “if I like”.
32. D forced C to lend him P10,000. The
promissory note is in writing.
a. The contract is rescissible because the contract
is fraudulent.
b. The contract is void.
c. C cannot demand payment from D because the
contract is unenforceable.
d. Contract remains to be valid.
33. The stipulation in a contract to the effect that
the debtor should remain as a servant in the house
and in the service of her creditor so long as she
had not paid her debt is void because it is:
a. Contrary to good custom.
b. Contrary to public policy.
c. Contrary to law and morality.
d. None of the above.
34. X, after the death of his father, sold his
inheritance though its amount has not yet been
determined to B, for a consideration of P50,000.
a. The contract is valid only if the inheritance values
at least equal or more than P50,000.
b. The contract is rescissible.
c. The contract is valid even though nothing
remains of her inheritance to be turned over to
B.
d. Contract is void, future inheritance cannot be the
object of sale.
 MCQs for Law on Contracts
35. One of the stipulations contained in the contract
between M Company and its employees is that the
company shall pay a bonus to employees of the
company who shall continue its employment for at
least 2 consecutive years, unless he quits or is
discharged before the expiration of the period of 2
years. X, an employee of the company, was
discharged without just cause one week before the
completion of the two-year period.
a. X is not entitled to the bonus because his
discharge was in accordance with the contract.
b. X is not entitled to the bonus, because the
employer’s right to terminate is superior than the
right of the employee to be employed.
c. X is entitled to the bonus whether the discharge
is with or without cause.
d. X is entitled to the bonus because the debtor
company has voluntarily prevented the
happening of the condition.
36. Which of the following is not a requisite for the
validity of a contract?
a. Consent.
b. Object.
c. Cause or consideration.
d. Delivery of the thing.
e. None of the above.
37. Before acceptance is conveyed, an offer
becomes ineffective upon:
a. Death.
b. Civil interdiction.
c. Insanity.
d. Insolvency of either party.
e. All of the above.
38. Example 1: S sold to B in a private instrument
his land. Later, B wanted to have the sale
registered, but registration requires a public
instrument. In here, B may compel S to execute the
needed public instrument.
Example 2: S sold to B orally his specific land. After
B paid S the price of the sale, he wanted to register
the land in his name but he needed a public
instrument of sale. In here, B may compel S to
execute the needed public instrument.
a. Both examples are false.
b. Only No.1 is true.
c. Only No.2 is true.
d. Both examples are true.
39. X alleged that Y promised to give X one hectare
of land. This is in consideration of X’s meritorious
service to Y. Y pleads in defense that since the
promise was not writing, it is unenforceable under
the Statue of Frauds. Decide.
a. The promise is unenforceable because it is not in
writing.
b. The Statue of Frauds is applied because X has
rendered services already.
c. The Statue of Frauds is inapplicable here,
because the promise to give the land is not a
sale of real property.
d. The Statue of Frauds can apply to partially
executed contract.
40. An incidental element of a contract:
a. Implied warranty in sale.
b. Payment of interest in a loan.
c. Delivery of the object in contract of pledge.
d. All of the above.
41. Statue 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 making thereof.
d. All of the above.
42. By provision of law, which of the following
contracts is not required to appear in a public
document?
a. Acts and contracts which have for their object the
creation, transmission, modification or
extinguishment of real rights over immovable
property.
b. The cession, repudiation or renunciation of
hereditary rights.
c. The power to administer property.
d. Sale of immovable property.
e. None of the above.
43. Which of the following instruments is not
subject to reformation?
a. Simple donations inter vivos wherein no
condition is imposed.
b. Wills.
c. When the real agreement is void.
d. All of the above.
44. Which is the most defective contract?
a. Rescissible contract.
b. Voidable contract.
c. Unenforceable contract.
d. Void contract.
 MCQs for Law on Contracts
45. Which of the following may not be made the
object of a contract?
a. All things which are not outside the commerce of
men.
b. All rights which are transmissible.
c. All services which are not contrary to law.
d. Impossible things or services.
e. None of the above.
46. An obligation which cannot be enforced by
court action, but which is binding on the party who
makes it in conscience and according to natural
justice is called:
a. Civil obligation.
b. Natural obligation.
c. Pure obligation.
d. Simple obligation.
47. D is indebted to C in the sum of P10,000. For
the purposes of avoiding the claims of C, D
donated all his properties worth the same amount
to X. Assuming C has no other means
a. The contract is absolutely simulated.
b. The contract is rescissible.
c. The contract is merely voidable.
d. The contract is void.
48. In three of the following, the transaction is void.
Which is the exception?
a. Oral contract of partnership the capital is
P3,000 or more.
b. Contracts in writing contemplating impossible
services.
c. Authority of the agent orally made in sale of
immovable property.
d. Oral contract of partnership whenever
immovable property is contributed.
49. This kind of defective contract refers to that
contract which is validly agreed upon because all
the essential elements exist, but courts can nullify it
when there is damage or prejudice to one of the
parties or to a third person. Its enforcement would
cause injustice by reason of some external facts.
a. Voidable contract.
b. Void or Inexistent Contract.
c. Rescissible Contract.
d. Unenforceable Contract.
50. S and B orally agreed that S would sell and B
would buy S’s radio for P400, two years from the
date of the agreement. At the end of the two-year
period, S refused to deliver the radio although B
was willing to pay.
a. B can compel S to deliver because B is willing to
pay the price.
b. The contract falls under the Statue of Frauds,
therefore unenforceable.
c. No Statue of Frauds because the price is less
than P500.
d. The object is movable, oral contract is
enforceable.
51. A sold his land to B. Although the sale was
made orally, B still paid A the agreed price. Later, B
wanted to have the sale registered but he needed a
public instrument. What can B do?
a. B may compel A to execute the public
instrument because the contract is valid.
b. B cannot compel A to return the price because
the contract is not enforceable.
c. B may only sue A to return the price because no
one may enrich himself at the expense of another.
d. B may occupy and use A’s land as a buyer in
good faith.
52. Contract which has no effect at all and cannot
be ratified is a/an:
a. Unenforceable contract.
b. Void contract.
c. Voidable.
d. All of them.
53. If mistake, fraud, inequitable conduct, or
accident has prevented a meeting of the minds of
the parties to contract, the proper remedy is:
a. Sue for specific performance of the contract.
b. Ratify the contract.
c. Annulment of the contract.
d. Reformation of the contract.
54. S, a minor, owns a specific property valued at
P50,000. B, capacitated, by means of fraud
induced S to sell his property to him (B) for
P100,000 which S did so. The contract is in writing.
a. The contract is binding from the start.
b. The contract remains unenforceable because if
falls under the Statue of Frauds.
c. The contract is rescissible because the ward
suffered lesion by more than one-fourth of the
value.
d. The contract is void.
55. In order that a stipulation in favor of a third
person in a contract would be valid and binding
upon parties thereto, three of the requisites are
mentioned in the following enumeration. Which
among them is not requisite?
 MCQs for Law on Contracts
a. There must be a stipulation in favor of a third
person.
b. The contracting parties must have clearly and
deliberately conferred a favor upon that third
person.
c. The third person communicated his acceptance
to the obligor before its revocation.
d. That there must be an existing agency
between either of the contracting parties and
the third person.
56. D is indebted to C for P10,000. For the
purpose of defrauding C, D sold his only parcel of
land to X valued at P10,000. X had no knowledge
of the intention of D.
a. The contract between D and X is binding.
b. The contract is voidable because D is in bad
faith.
c. The right of C is to rescind the contract because
the transaction is fraudulent.
d. The contract between D and X is rescissible.
57. D owes C P500. However, C’s right has
already prescribed. Notwithstanding the knowledge
of this fact, D paid the amount. Realizing this
mistake, D wants to recover the amount he paid.
a. D can be made to recover on ground of mistake.
b. D can be made to recover on the ground that his
obligation is not legally enforceable.
c. D can be made to recover because this will
enrich C at the expense of D.
d. D cannot recover.
58. A obtained a loan from B for P1,500 with
interest at 14% per annum, the payment of which
was secured by guarantor C. After maturity of the
loan, D without the knowledge of A paid B, P1,400
and thereupon B signed a receipt and gave it to D,
of this tenor. “Received from D P1,400 in full
payment of A’s obligation in may favor”. (Sgd.) B.
a. D can recover from A P1,500 because the whole
obligation of A to B has been extinguished.
b. D can recover from A P1,500 because the
balance of P100 is considered extinguished by
partial remission.
c. D can recover from A P1,400 because that
was presumably the extent to which A was
benefited.
d. D cannot recover from A because he paid
without the knowledge of A.
59. The duty not to recover what has voluntarily
been paid although payment was no longer
required.
a. Natural obligation
b. Moral obligation
c. Civil obligation
d. None of the above.
60. Contract with a false cause is
a. Voidable.
b. Void.
c. Unenforceable.
d. All of the above.
61. Which of the following contracts is
unenforceable unless ratified?
a. Those entered into in the name of another
person by one who has been given no authority or
legal representation, or who has acted beyond his
powers.
b. Contracts infringing the Statute of Frauds.
c. Those where both parties are incapable of giving
consent to a contract.
d. All of the above
62. Which of the following contracts is required to
be in writing to be enforceable?
a. An agreement that by its terms is not to be
performed within a year from the making thereof.
b. A special promise to answer for the debt, default
or miscarriage of another.
c. An agreement made is consideration of
marriage, other than a mutual promise to marry.
d. Sales of goods, chattels or things in action at a
price not less than P500.
e. All of the above.
63. Example no. 1: D obliged himself to give C
P10,000. However, the day before the obligation
falls due, D’s apartment was completely gutted by
accidental fire. There is no question that the
money was also razed by fire. The obligation of D
is totally extinguished because of fortuitous event.
Example no. 2: D obliged himself to pay C P10,000
with 6% interest. On the due date, D tendered
P10,000 with a promise to pay the P600 interest
the day after. If C refused to accept, he can be
compelled to do so because the obligation is
divisible.
a. Both are true.
b. Both are false.
c. No. 1 is true; No. 2 is false.
d. No. 1 is false; No. 2 is true.
64. Example no. 1: D for P10,000 mortgaged his
land to C. C, instead of a deed of mortgage,
 MCQs for Law on Contracts
executed a deed of sale and let D sign his name.
D’s right to go to court and ask for annulment.
Example no. 2: D obliged himself to give object no.
1 or object no. 2 to C. In here, both objects are
due.
a. Both are true.
b. Both are false.
c. No. 1 is true; No. 2 is false.
d. No. 1 is false; No. 2 is true.
65. Consent is manifested by the meeting of the
offer and the acceptance upon the thing and the
cause which are to constitute the contract. Which
of the following constitutes a definite offer?
a. An offer made through an agent.
b. Business advertisement of things for sale.
c. Advertisement for bidders.
d. All of the above.
66. On July 15, 2012, X entered into a contract with
Y. On February 10, 2013, X discovered that fraud
was committed at the time he entered into the
contract, a fraud that vitiated his consent. The
action for annulment shall be brought:
a. Within three years from the time of the fraud.
b. Within four years from February 10, 2013.
c. Within four years from he time A entered into the
contract.
d. On February 10, 2013.
67. S was forced by X to sign a contract with B for
the sale of a specific property for P10,000. C, a
creditor of S, is prejudiced by the contract. What
can S do?
a. S may ask for annulment of the contract.
b. S may ask for rescission of the contract.
c. S may ask C to declare the contract avoided.
d. S may ask for reformation of the contract.
68. Example no. 1: The husband, by intimidation,
was able to obtain the consent of his wife, with
regard to the sale of a piece of land belonging to
the wife for P1 million. The contract is voidable
because there was intimidation.
Example No. 2: In the above example, the right of
the wife is to go to court and file a motion for
annulment within four(4) years from the time
intimidation ceased.
a. Both are true.
b. Both are false.
c. No. 1 is true; No. 2 is false.
d. No. 1 is false; No.2 is true.
69. A contract where both parties are incapable of
giving consent is:
a. Rescissible.
b. Voidable.
c. Unenforceable.
d. Void.
e. None of the above.
70. Three of the following contracts are void. Which
is the exception?
a. Those whose cause, object or purpose is
contrary to law, morals, good customs, public order
or public policy.
b. Those which are absolutely simulated or
fictitious.
c. Those which cause or object did not exist at the
time of the transaction.
d. Those where both parties are incapable of
giving consent to a contract.
71. Which of the following contracts is void?
a. Those which object is outside the commerce of
men.
b. Those which contemplate an impossible service.
c. Those where the intention of the parties relative
to the principal object of the contract cannot be
ascertained.
d. Those expressly prohibited or declared void by
law.
e. All of the above.
72. S makes an offer to B on January 1, 2012. B
makes known his acceptance through a letter sent
on January 2, and received by S on January 10.
Meantime, on January 5, S becomes insane.
a. The contract is voidable because one party is
insane.
b. There is already a meeting of minds, the contract
is perfected.
c. The contract is not binding because there is
no meeting of minds.
d. None of the above.
73. In the preceding number, if S is perfectly sane
but only an unemancipated minor at the time the
acceptance is communicated to him then,
a. There is no meeting of minds between the
parties, unless ratified by the guardian of S.
b. The contract is not binding because one party is
incapacitated.
c. The contract is binding between the parties.
d. None of the above.
 MCQs for Law on Contracts

74. D owes C P10,000. But the debt soon

prescribed. Later X, against the consent of D, pays
C P10,000.
a. X can recover from D P10,000 because the latter
was enriched at the expense of X.
b. X has no right.
c. X cannot recover from D what he pays C.
d. Both D and C are liable to X.

75. In a contract of sale executed by S and B, it

appears S sold his motor vehicle to B and B bought
it for P10,000. It turned out however, S has three
motor vehicles. Galant valued at P80,000: Hi-Ace
van valued at P70,000; and a Jeep valued at
P60,000. Which of the following is correct?
a. The contract shall be reformed because there
was mistake.
b. The parties can ask for interpretation because
the word motor vehicle is ambiguous.
c. The parties can ask for annulment of the
contract.
d. There is no contract.