Regulatory Framework in Business Transactions

LAW ON SALES
1. It is a contract whereby one of the contracting parties, known as the seller or
vendor, obligates himself to transfer the ownership of and to deliver a determinate
thing, while the other party, known as the buyer or vendee, obligates himself to pay
therefore a price certain in money or its equivalent.
a) Contract of lease
b) Contract of sale
c) Contract of pledge
d) Contract of deposit

2. Which of the following is not an essential element of contract of sale?

a) Subject matter which should be a determinate thing
b) Price certain in money or its equivalent
c) Delivery of the subject matter from the seller to the buyer
d) Meeting of minds as to the determinate thing and the price certain in money

3. Which of the following may not become a subject matter of contract of sale?
a) Future goods
b) Vain hope
c) Undivided interest in a property
d) Things subject to a resolutory condition

4. Which of the following may become a subject matter of contract of sale?

a) Future inheritance
b) Pig with African Swine Fever
c) Kidney organ
d) Patrimonial property of the state

5. A franchisee of PCSO sold an undrawn lottery ticket No. 23 to a bettor. This

contract is considered
a) Emptio spei
b) Emptio rei speratae
c) Empio pour autrui
d) Emptio commissorium

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6. In which of the following cases is the price of the contract of sale considered
uncertain making the contract void ab initio?
a) Sale of a specific cellphone whereby the price is left by the buyer and seller to
the judgment of a specified third person
b) Sale of a specific laptop whereby the price is the monthly salary of Atty. John
Lloyd Cruz
c) Sale of a specific tablet whereby the price of P40,000 is fixed by the seller but
voluntarily accepted by the buyer
d) Sale of preferred stock of Globe Incorporated equivalent to the closing price of
common stock of Smart Incorporated in the Philippine Stock Exchange on
October 4, 2020

7. What is the effect of lesion a.k.a. inadequacy of price in a contract of sale?

a) Lesion does not affect the validity of a contract of sale, except as lesion may
indicate a defect in the consent which makes the contract voidable requiring
annulment of contract.
b) Lesion may indicate that the true intention of the contracting parties is actually a
contract of donation or loan with equitable mortgage instead of contract of sale.
Thus, reformation of instrument is the proper remedy.
c) Either a or b
d) Neither a nor b

8. When is a contract of sale perfected?

a) At the moment there is a meeting of minds upon the thing which is the object of
the contract and upon the price certain in money or its equivalent
b) At the moment there is delivery from the seller to the buyer
c) At the moment there is execution of deed of sale
d) At the moment there is notarization of the deed of sale

9. The seller in an auction sale employed a by-bidder or pupper who bid in behalf of
the seller for the purpose of raising the auction price. The seller employed the said
by-bidder or pupper without notice to the bidder. What is the possible effect of such
non-notification committed by the seller to the perfected contract of sale by auction
with the highest bidder?
a) It makes the contract of sale rescissible.
b) It makes the contract of sale voidable.
c) It makes the contract of sale unenforceable.
d) It makes the contract of sale void.

10. Which of the following is not a natural element in a contract of sale?

a) Warranty on the conventional interest of the contract of sale
b) Warranty against eviction
c) Warranty against hidden defect
d) Warranty for merchantability

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11. Which of the following is not a characteristic of a contract of sale?
a) Bilateral contract
b) Principal contract
c) Onerous contract
d) Real contract

12. S and B orally entered into a contract involving a production of a particular dining
table based on the design specifically customized for B at a price of P500 with the
payment and delivery to be made one month from the date of oral agreement. The
estimated production cost of the said dining table is P800. What is the status of
contract between S and B?
a) Perfectly valid contract
b) Rescissible contract
c) Voidable contract
d) Unenforceable contract

13. S and B entered into a contract whereby S will deliver a specific laptop valued at
P40,000 while B will deliver a specific laptop P20,000 plus a cash amounting to
P20,000. What is the nature of contract between S and B?
a) Contract of barter
b) Contract of sale
c) Contract of lease
d) Contract for a piece of work

14. In which of the following contract is full payment of the price generally the operative
act that transfers ownership from the seller to the buyer?
a) Contract of sale
b) Agency to sell
c) Consignment sale
d) Contract to sell

15. S sold and delivered a mass of black pepper (100 sacks) in his specific warehouse
to B at a lump sum price P100,000 per sack. Which of the following statements is
correct?
a) The contract of sale is void because the subject matter is not determinate at the
time of constitution of the contract.
b) If the content of the mass is 150 sacks, B will own all the mass of black pepper
provided he will pay P100,000 to S.
c) If the content of the mass is only 80 sacks, S is still required to deliver additional
20 sacks to B unless there is stipulation to the contrary.
d) None of the above

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16. Which of the following statements about bilateral promises to buy and to sell and
unilateral promise to buy or to sell is incorrect?
a) Bilateral promise to buy and sell is as good as perfected contract of sale.
b) Unilateral promise to buy or to sell accepted by the promissee is binding upon
the promissor despite the absence of option money.
c) Policitacion refers to unilateral promise to buy or to sell not accepted by the
promise. Therefore, it does not produce any effect.
d) None of the above.

17. S and B orally agreed for the sale of a specific car at a price of P100,000. As a
downpayment, B paid manager’s check with amount of P10,000 to S on the date of
oral agreement. Delivery of the car will happen after the full payment of the price
which will happen 2 years after the date of oral agreement. Which of the following
statements is correct?
a) B may legally compel S to sign and execute the notarized deed of sale of car.
b) The oral contract of sale of car between S and B is unenforceable by court
action.
c) I B decides to buy the car 2 years after the oral agreement, he must still the
total purchase price of P100,000 to S.
d) The oral contract entered between S and B is a contract of option perfected by
the issuance by B of manager’s check to S.

18. When does the buyer obtain personal right over the fruits of the determinate thing
sold in a contract of sale?
a) From the moment of actual delivery
b) From the moment of constructive delivery
c) From the moment of perfection of contract of sale
d) From the moment of full payment of the price

19. What is the effect of the complete loss of the subject matter of the contract of sale
before the perfection of the contract of sale or at the exact moment of the perfection
of the contract of sale?
a) The buyer is still required to pay the price.
b) The contract of sale is void ab initio.
c) The contract of sale is voidable.
d) The seller is still required to deliver the determinate thing to the buyer.

20. Who shall suffer the risk of complete loss of the determinate thing of the object of
the contract of sale after perfection of contract of sale but before the delivery of the
subject matter to the buyer?
a) Seller on the basis of res perit domino
b) Buyer on the basis of res perit domino
c) Buyer because he is entitled to the fruits after perfection of contract of sale
d) Seller provided the buyer has not fully paid the price

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21. A, an adult, sold and delivered a specific ballpen to M, a minor, at a reasonable
price of P10. Is M legally required to pay the reasonable price?
a) No because the contract is covered by statute of fraud, therefore,
unenforceable.
b) Yes because the subject matter specific ballpen is a necessary.
c) No because the contract is voidable, therefore, subject to annulment of contract.
d) Yes because M is guilty of bad faith.

22. S, an insane, sold in writing a specific car to D, a demented person, at a price of

P100,000. What is the status of contract of sale?
a) Rescissible contract
b) Voidable contract
c) Unenforceable contract
d) Void contract

23. H and W entered into a contract of marriage on year 1990 without any ante-nuptial
agreement. H, through force and intimidated, compelled W to give consent and to
sign the deed of sale involving the exclusive property of W to H at a bargain price of
P100,000 whereby W suffered lesion amounting to P30,000. What is the status of
the contract of sale?
a) Rescissible contract
b) Voidable contract
c) Unenforceable contract
d) Void contract

24. H and W entered into a contract of marriage on year 2020 with prenuptial
agreement of complete separation of property regime. H, through force and
intimidated, compelled W to give consent and to sign the deed of sale involving the
exclusive property of W to H at a bargain price of P500,000 whereby W suffered
lesion amounting to P130,000. What is the status of the contract of sale?
a) Rescissible contract
b) Voidable contract
c) Unenforceable contract
d) Void contract

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25. Who among the following are not legally prohibited from acquiring by purchase,
even at public or judicial auction, sales in legal redemption, compromises or
renunciation the specified property?
a) Public officers and employees, the property of the State or GOCC under their
administration
b) Justices, judges, prosecuting attorneys, clerks of court and other officers and
employees connected with the administration of justice, the property and rights
in litigation
c) Executors and administrators, the property of the estate under administration
d) The ward, the property of his guardian who had him under his guardianship
e) Agents, the property whose administration or sale may have been entrusted to
them

26. As a general rule, what is the operative act that transfers ownership from the seller
to the buyer in a contract of sale?
a) Full payment of the price
b) Actual delivery or constructive delivery of the determinate thing to the buyer
c) Meeting of minds between the buyer and seller as to the determinate thing and
the price certain
d) Registration of the certificate of title to the appropriate registry or book

27. S sold the mass of Dinorado Rice stored in his specific warehouse to B at a price of
P100,000. At the agreed date of delivery, S delivered the key of the warehouse to
B. What type of constructive delivery is done by S to B?
a) Traditio clavium
b) Traditio longa manu
c) Traditio brevi manu
d) Traditio constitutum possessorium
e) Traditio by execution of formalities or solemnities

28. S sold a specific van to B at a price of P100,000. Before the physical delivery of the
said van to B, B leased it back to S so the physical delivery did not prosper. What
What type of constructive delivery is present in the case at bar?
a) Traditio clavium
b) Traditio longa manu
c) Traditio brevi manu
d) Traditio constitutum possessorium
e) Traditio by execution of formalities or solemnities

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29. Which of the following is not an applicable mode of delivery of intangible asset or
incorporeal right in a contract of sale?
a) By notarization of the deed of sale
b) By physically transferring possession of intangible asset or incorporeal right to
buyer
c) By placing the certificate of ownership in the possession of the vendee
d) By allowing the buyer to exercise the rights of the seller over an incorporeal
right or an intangible asset

30. On August 1, 2020, S orally sold and delivered a specific laptop to B at a price of
P25,000 under a sale or return arrangement with a return period of one month. The
contract provides the payment of the price will be done on August 31, 2020. On
August 15, 2020, B was robbed of the said laptop by a holdaper. Which of the
following statements is correct?
a) The contract of sale is unenforceable because it is covered by statute of fraud.
b) B is no longer required to pay the price of P25,000 because the contract of sale
is extinguished by robbery which is considered a fortuitous event.
c) B is still required to pay the price because of the concept of res perit domino.
d) The contract of sale is void ab initio because of the absence of subject matter.

31. In sale on trial or sale on approval, which of the following acts does not transfer
ownership of the subject matter from the seller to the buyer?
a) The buyer signifies to the seller his approval or acceptance of the goods.
b) The seller actually or constructively delivered the subject matter to the buyer.
c) The buyer does an act adoption the transaction such as by consuming the
subject matter or destroying the subject matter.
d) The buyer retains the subject matter without giving notice of rejection to the
seller within the time fixed in the contract or within reasonable time.

32. In the absence of contrary agreement, what is the shipping term in case of sale of
goods in transit?
a) FOB Shipping point
b) FOB Destination
c) FOB in Transit
d) None of the above

33. T surreptitiously stole the specific necklace of S. Afterwards, T sold and delivered
the said necklace to B at a price of P10,000. B acquired the said necklace in good
faith and for value. Which of the following statements is correct?
a) S can legally recover the necklace from B even without reimbursing B.
b) S may legally recover the necklace from B but S must reimburse B of the
amount of P10,000.
c) S can never legally recover the necklace from B because the latter is a
purchaser in good faith and for value.
d) S cannot legally recover the necklace from B unless he reimburses B of the
amount of P10,000.

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34. T surreptitiously stole the specific necklace of S. Afterwards, T conducted a public

auction then sold and delivered the said necklace to B at a price of P10,000. B
acquired the said necklace in such public auction. Which of the following statements
is correct?
a) S can legally recover the necklace from B even without reimbursing B.
b) S may legally recover the necklace from B but he must reimburse B of the
amount of P10,000.
c) S can never legally recover the necklace from B because the latter is a
purchaser in good faith and for value.
d) S cannot legally recover the necklace from B even if he reimburses B of the
amount of P10,000.

35. D deposited his specific laptop to the baggage counter of SM Appliance Store. The
store manager displayed the said laptop at the said store and placed a tag price of
P20,000. B saw the said displayed laptop and acquired it from SM Appliance Store
for P20,000. Which of the following statements is correct?
a) D can legally recover the laptop from B even without reimbursing B.
b) D may legally recover the laptop from B but he must reimburse B of the amount
of P20,000.
c) D cannot legally recover the laptop from B because the latter obtained good title
over the laptop.
d) D cannot legally recover the laptop from B unless he reimburses B of the
amount of P10,000.

36. M, a minor, sold and delivered a specific cellphone to B at a price of P15,000.

Afterwards, B sold and delivered the said cellphone to T, a purchase in good faith
and for value, at a price of P10,000. Which of the following statements is correct?
a) T obtained a voidable title over the specific cellphone.
b) T obtained a good title over the specific cellphone.
c) T obtained a void title over the specific cellphone.
d) T obtained a rescissible title over the specific cellphone.

37. Which of the following is not a right available to an unpaid seller in a contract of
sale?
a) Right to possessory lien on the goods or right to retain them while he is in
possession of them
b) Right of stoppage in transit
c) Right of resale
d) Right to rescind the sale
e) Right to declaration of nullity

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38. Which of the following is not a ground for right of possessory lien by an unpaid
seller?
a) Where the goods have been sold without any stipulation as to credit
b) Where the goods have been sold on credit, but the credit term has expired
c) Where the buyer is insolvent
d) Where the unpaid seller obtains judgment or decree for the price of the goods

39. What is the only group for right of stoppage in transitu?

a) Where the goods have been sold without any stipulation as to credit
b) Where the goods have been sold on credit, but the credit term has expired
c) Where the buyer is insolvent
d) Where the goods are perishable in nature

40. In which of the following instances are the goods still in transit?
I. From the time they are delivered to the carrier or other bailee for the purpose
of transmission to the buyer, until the buyer or his agent, takes delivery of
them from such carrier or other bailee.
II. If the goods are rejected by the buyer, and the carrier or other bailee
continues in possession of them, even if the seller has refused to receive
them back
III. If the buyer obtains delivery of the goods before arrival at the appointed
destination.
IV. If the carrier or other bailee acknowledges to the buyer or his agent, that he
is holding the goods in his behalf, after arrival of the goods at their appointed
destination.
V. If the carrier or other bailee wrongfully refuses to deliver the goods to buyer
or his agent.

a) I and II
b) III, IV and V
c) I and V
d) II, III and IV

41. Which of the following is not a ground for right of resale by an unpaid seller?
a) The goods are of perishable nature.
b) The seller has expressly reserved the right to resell the goods in case the buyer
should make default.
c) The buyer has been in default for an unreasonable time.
d) The buyer becomes solvent.

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42. Which of the following is a ground for right to rescind the sale by an unpaid seller?
a) The seller has expressly reserved the right to rescind the goods in case the
buyer should make default.
b) The buyer has been in default for an unreasonable time.
c) Either a or b
d) Neither a nor b

43. S sold to B a lot with an area of 100 square meters at a price of P1,000 per square
meter. Within six (6) months from the date of delivery of the lot, B discovered that
the actual area of the said lot is only 90 square meters. What is the remedy
available to B regarding this deficiency in the area of the lot?
a) Ask for proportionate reduction of price by paying only P90,000
b) Ask for rescission or cancellation of contract of sale of the 100 square meters lot
c) Either a or b
d) Neither a nor b

44. S sold to B a lot with an area of 100 square meters of garden soil at a price of
P1,000 per square meter. Within six (6) months from the date of delivery of the lot,
B discovered that the actual area of the said lot consists of 89 square meters
garden soil and 11 square meters sand soil. What is the remedy available to B
regarding this inferior quality of the lot?
a) Ask for proportionate reduction of price
b) Ask for rescission or cancellation of contract of sale of the 100 square meters lot
c) Either a or b
d) Neither a nor b

45. S sold to B a lot with an area of 100 square meters bounded by bamboo fence at a
lump sum price of P100,000. Within six (6) months from the date of delivery of the
lot, B discovered that the actual area of the said fenced lot is only 95 square meters.
What is the remedy available to B regarding this deficiency in the area of the lot?
a) Ask for proportionate reduction of price by paying only P95,000
b) Ask for rescission or cancellation of contract of sale of the 100 square meters lot
c) Either a or b
d) Neither a nor b

46. Which of the following is not a requirement of a double sale?

a) There must be a single property involved.
b) There must be two or more contracts of sales.
c) There must be two or more different buyers whose rights are conflicting.
d) The buyers must have acquired the same property from the same seller.
e) The deeds of sales must all be in public instrument.

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47. Which of the following contracts is governed by the rule on double sale?
a) Contract of sale
b) Contract to sell
c) Agency to sell
d) All of the above

48. In case of double sale of movable or personal property, who among the buyers of
the said movable property from the same buyer shall prevail?
a) Buyer with the oldest title
b) First possessor, either actual or constructive possession, of the movable
property in good faith
c) First payor of the movable in good faith
d) First registrant of the deed of sale of movable property in good faith

49. In case of double sale of titled immovable or real property, who among the buyers of
the said immovable property from the same buyer shall prevail?
a) Buyer with the oldest title
b) First possessor, either actual or constructive possession, of the immovable
property in good faith
c) First payor of the movable in good faith
d) First registrant of the deed of sale of immovable property in good faith

50. It refers to the the deprivation of the vendee of the whole or a part of the thing sold
by virtue of a final judgment based on a right prior to the sale or an act imputable to
the vendor.
a) Eviction
b) Redhibition
c) Rescission
d) Alienation

51. Which of the following is not a requisite to enforce vendor’s liability in case of
eviction of the buyer on the ownership of the thing sold?
a) There must be a final judgment depriving the vendee of the whole or part of the
thing sold.
b) The vendee must not appeal from the decision or judgment depriving him of the
thing sold.
c) The deprivation is based on a right prior to the sale or an act imputable to the
vendor.
d) The vendor must have been notified of the suit for eviction at the instance of the
vendee.
e) The vendor must have acted in bad faith.

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52. It refers to a type of waiver of warranty against eviction that is made by the buyer
when he acted in good faith because he has no knowledge of risk of eviction. In this
case, the seller is still liable for eviction but only up to the extent of the value of the
thing at the time of eviction.
a) Waiver consciente
b) Waiver intentionada
c) Waiver possessionada
d) Waiver reindivicatoria

53. On January 1, 2021, S sold a specific lot to B. Unfortunately, the said lot is
encumbered by a nonapparent and unregistered burden or servitude of septic tank.
On July 1, 2022, B discovered the said servitude. What is the legal remedy still
available to B?
a) Action for rescission or cancellation of the sale of the lot
b) Action for indemnification for damages
c) Either a or b
d) Neither a nor b

54. In case of breach of warranty of merchantability or quality of a product, which of the

following is a remedy not available to the injured buyer?
a) Accept or keep the goods and set up against the seller the breach of warranty
by way of recoupment or diminution or extinction of the price.
b) Accept or keep the goods and maintain an action against the seller for damages
for breach of warranty.
c) Refuse to accept the goods, and maintain an action against the seller for
damages for breach of warranty.
d) Rescind the sale and refuse to receive the goods or if the goods have already
received, return them or offer to return them to the seller and recover the price
of any part thereof which has been paid.
e) Ask for declaration of nullity of contract of sale on the ground of absence of
subject matter

55. Which of the following is not a requisite for the enforcement of vendor’s liability for
hidden defect on the thing sold?
a) The defect must exist at the time of sale.
b) The defect must be hidden.
c) The defect must render the thing unfit for the use for which it is intended or
diminishes its fitness for such use to such an extent that had the vendee been
aware thereof, he would not have acquired it or would have given a lower price
for it.
d) The action to enforce the warranty against hidden defect must be made within
the 6-month period provided by law from the time of delivery.
e) The warranty against hidden defect must be expressly stipulated in a contract of
sale.

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56. In which of the sale is warranty for hidden defect available to the buyer?
a) Sale of second hand item or pre-owned item or pre-loved item
b) Sale by Junk-shop operators
c) Sale in auction
d) Sale of brand new item by online sellers

57. It refers to one of the two alternative remedies available to buyer of a thing in case
of breach of warranties against hidden defects, of merchantability, of merchantable
quality or fitness for a particular purpose whereby there is a prayer by the buyer for
withdrawal or for rescission or for cancellation of the contract of sale.
a) Accion redhibitoria
b) Accion quanti minoris
c) Accion pauliana
d) Accion reindivicatoria

58. Which of the following statements about liability of seller for hidden defect is
correct?
a) The seller is liable for selling object with hidden defect only if he was aware of
the said defect.
b) The seller is liable for selling object with hidden defect only if the reason of the
loss is the said hidden defect itself.
c) The seller is liable for selling object with hidden defect regardless of the
awareness of the presence of defect and regardless of the reason of the loss of
the said object with hidden defect.
d) The seller is not liable for selling object with hidden if there is a buyer’s waiver of
the warranty against hidden defect even if the buyer has knowledge of the
presence of the hidden defect.

59. It refers to a defect in an animal and it is of such nature that expert knowledge, even
after a professional inspection has been made, is not sufficient to discover it.
a) Redhibitory defect
b) Contagious disease
c) Voidable defect
d) Uncurable disease

60. What is the prescriptive period for filing action redhibitoria or action quanti minoris
based on breach of warranty against presence of redhibitory defect in an animal
sold?
a) 3 days from the date of delivery
b) 40 days from the date of delivery
c) 6 months from the date of delivery
d) 1 year from the execution of deed of sale

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61. In which sale of animal will there be warranty for hidden defect?
a) Sale of animals at fairs
b) Sale of animals at public auctions
c) Sale of live stocks as condemned
d) None of the above

62. What is the status of sale of broiler chicken suffering from bird flu?
a) Rescissible contract
b) Voidable contract
c) Unenforceable contract
d) Void contract

63. Which of the following is not a requisite for enforcement of vendor’s liability for
death of an animal?
a) The disease exists at the time of sale.
b) The disease is the cause of death of the animal.
c) The animal dies within 3 days from time of purchase.
d) The disease must be redhibitory.

64. On January 1, 2020, S sold and delivered a specific house and lot to B with a
stipulation that the price of P1,500,000 will be paid on July 1, 2020. The contract
provides that in case of non-compliance by B on the payment of the price, the
contract of sale of house and lot will be automatically cancelled on the date of
default. On July 1, 2020, B defaulted in the payment of the price. Which of the
following statements is correct?
a) The contract of sale of house and lot is automatically cancelled on July 1,2020
based on autonomy of contract.
b) B may still pay the price of P1,500,000 after his default on July 1,2020 provided
notarial or judicial demand for rescission has not yet been made by the seller to
him.
c) S may forcibly evict B from the possession of the said house and lot based on
the provision of contract.
d) B can never be evicted from the possession and ownership of the said house
and lot because he is already the owner upon its delivery.

65. Which of the following are the grounds for immediate rescission or cancellation of
sale of movable property?
a) If at the time of the delivery of the thing, the vendee does not appear to receive
the thing.
b) If at the time of the delivery of the thing, the vendee having appeared, does not
pay the price, unless a longer period is stipulated for its payment.
c) Either a or b
d) Neither a nor b

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66. Which of the following remedies available to the seller for the breach of contract of
sale committed by the buyer is correct?
a) Assuming the goods have already been delivered to the buyer and the buyer
wrongfully neglects or refuses to pay the price, the seller may maintain an
action for the price of the goods or may file an action to collect a sum of money.
b) If the buyer wrongfully neglects or refuses to accept and pay for the goods, the
seller may maintain an action for damages.
c) Assuming the goods have not yet been delivered to the buyer and (1) If the
buyer has repudiated the sale or (2) If the buyer manifested his inability to
perform his obligation to pay the price or (3) If the buyer has committed a
breach of contract, the seller may rescind the contract of sale.
d) All of the above

67. Which of the following is the proper legal remedy to be availed by the buyer if the
seller committed a breach of contract of sale of specific thing by non-delivering the
subject matter to the buyer?
a) File an action for specific performance or exact fulfilment plus damages
b) File an action for reformation of instrument plus damages
c) File an action for annulment of contract of sale plus damages
d) File an action for declaration of nullity of contract of sale plus damages

68. Which of the following is not a mode of extinguishment of contract of sale?

a) Redemption, whether legal redemption or conventional redemption
b) Fulfilment of suspensive condition on sale of a determinate thing whose
acquisition of ownership by the seller depends upon a contingency
c) Resale of the goods by the unpaid seller
d) Cancellation of sale of personal property in instalments by the seller in case the
buyer defaulted in at least two instalments

69. It is a type of redemption that occurs in a contract of sale with a right to repurchase
or contract of pacto de retro sale whereby the vendor reserved the right to
repurchase the thing sold with the obligation to return to the vendee the price of the
sale, expenses of the contract and necessary and useful expenses made on the
thing sold and to comply with other stipulations which may have been agreed upon.
a) Judicial redemption
b) Legal redemption
c) Conventional redemption
d) Ethical redemption

70. In pacto de retro sale or sale with a right to repurchase of an immovable property,
what is the default period of redemption by the pacto de retro seller if the
redemption period is not stated in the contract of pacto de retro sale?
a) 30 days
b) 4 years
c) 10 years
d) 5 years

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71. S sold his specific land to B under pacto de retro sale or sale with a right to
repurchase whereby it was stipulated that the period of redemption is 25 years.
What is the period for redemption of the said land?
a) 25 years
b) 4 years
c) 10 years
d) 20 years

72. F sold a specific land to B under pacto de retro sale or sale with a right to
repurchase. Immediately after the sale, F died of heart attack. F left 3 children
named C, D and E. Which of the following statements is correct?
a) C may legally compel B for the redemption or repurchase of his 1/3 share in the
said land of his father.
b) D and E may legally compel B for the redemption or repurchase of their 2/3
share in the said land of their father.
c) B may legally demand D, E and F to come to an agreement upon the
repurchase of the whole land, and if they fail to do so, B cannot be compelled to
consent to a partial redemption of the said land.
d) E may legally redeem or repurchase the whole property from B despite the
absence of consent or authority from C and D.

73. A, B and C are co-owners of a specific land. On October 1,2020, A sold his 1/3
share in the said land to D under a deed of pacto de retro sale. On October 2,2020,
B also sold his 1/3 share in the said land to D a deed of under pacto de retro sale.
On October 3,2020, C also sold his 1/3 share in the said land to D under a deed of
pacto de retro sale. Which of the following statements is correct?
a) C may legally compel D for the redemption or repurchase of his 1/3 share in the
said land.
b) A cannot legally compel D for the redemption or repurchase of his 1/3 share in
the said land.
c) D may legally demand A, B and C to come to an agreement upon the
repurchase of the whole land, and if they fail to do so, D cannot be compelled to
consent to a partial redemption of the said land.
d) None of the above

74. It refers to a type of redemption in an onerous transfers of real property whereby a

third person is given a right to repurchase a real property sold by another person in
exceptional cases provided by law. It is defined as the right to be subrogated upon
the same terms and conditions stipulated in the contract, in the place of one who
acquires a thing by purchase, or dacion en pago, or by any other transaction
whereby the ownership is transmitted by onerous title.
a) Judicial redemption
b) Legal redemption
c) Conventional redemption
d) Ethical redemption

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75. A, B and C are co-owners of a specific land. On October 1,2020, C absolutely sold
his 1/3 share in the said land to D under a deed of absolute sale. Which of the
following statements is correct?
a) A and B may legally repurchase the 1/3 share of the land sold by C to D
proportionately despite the absence of the agreement in the deed of sale for
repurchase.
b) C may legally repurchase the 1/3 share of the land he sold to D by virtue of
legal redemption.
c) No one from A, B or C can repurchase the 1/3 share of the land sold by C to D
because the deed states it is an absolute sale.
d) None of the above

76. F1 owns a farm lot with an area of 1 hectare (10,000 SQM). The said rural lot is
bounded by a farm lot of F3 with area of 1,000 SQM and by a farm lot of F2 with an
area of 4,000 SQM. F1 sold his farm lot to F4, a landlord, via deed of absolute sale.
Who between F2 and F3 shall be preferred for the exercise of right of legal
redemption?
a) F2 because his farm lot has small area.
b) F3 because his farm lot has larger area.
c) F2 and F3 proportionately in the ratio of 1:4 or 20% and 80%, respectively
d) Neither F2 nor F3 can repurchase the farm lot sold by F1 because the deed
states it is an absolute sale.

77. What is the period for the exercise of right of legal redemption by the co-owners,
adjoining rural owners or adjoining urban lot owners who were granted by law in
absolute sale, barter or dacion en pago of immovable property?
a) 10 years from the notice of seller or prospective seller
b) 4 years from the notice of seller or prospective seller
c) 30 days from the notice of seller or prospective seller
d) 5 years from the notice of seller or prospective seller

78. In which of the following instances where legal redemption of an immovable

property is allowed will the right of legal pre-emption available to a third person?
a) Absolute sale of a share in real property by a co-owner
b) Dacion en pago of rural lot not exceeding one hectare (10,000) by a farmer to a
landlord
c) Barter of urban lot which is so small and which was bought mere for
speculation
d) Any of the above

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79. In which of the following instances will the sale with a right to repurchase or pacto
de retro sale or deed of absolute sale not be presumed an equitable mortgage?
a) When the price of a sale with a right to repurchase is inadequate.
b) When the vendor remains in possession as lessee or otherwise
c) When the period for the exercise of the right of repurchase is extended.
d) When the purchaser retains for himself part of the purchase price.
e) When the vendor binds himself to pay the real property taxes on the thing sold.
f) When the real intention of the parties is that the transaction shall secure the
payment of a debt or the performance of any other obligation.

80. What is the legal remedy available to the injured party of a contract when it is legally
presumed to be an equitable mortgage instead of pacto de retro sale?
a) Action for rescission of contract
b) Action for reformation of instrument
c) Action for annulment of contract
d) Action for declaration of nullity of contract

-Nothing Follows-

-END-

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