LAW ON OBLIGATIONS AND

CONTRACTS
(OUTPUTS)
QUIZZES
QUIZ NO 1
After reading and understanding the assigned articles, make sure to take this quiz by writing your
answers on a short bond paper.

SITUATION NO 1
X saw at about 1 in the afternoon a child alone in a shopping mall. The child who strayed from Y,
his mother, was in tears and appeared very hungry. Out of pity, X took him to a restaurant to eat
for which he spent P150. Y did not give her consent to the good deed of X. Furthermore, they were
on their way home before the child got lost. Is X entitled to be reimbursed by Y for the amount of
P150?
ANSWER:
The situation will fall under the Quasi-contracts which states that lawful, voluntary and unilateral
acts which are enforceable to end that no one shall be unjustly enriched or benefited at the expense
of another. In this case, Y must reimburse X for the amount of P150 unless X do not accept it for
his/her action is voluntary.
SITUATION NO 2
While the car of X was parked by the roadside, it was bumped at the rear by a jeep belonging to
Y. Only the car o X suffered damage. Under the circumstances, does it follow that Y is liable to X
for the damage?
ANSWER:
The situation will fall under the Quasi-delicts considering that it has caused damage to another
through there being at fault or negligence, but no contractual relation exists. This is why Y is liable
to X for the damage.
SITUATION NO 3
In the same problem, has X the right to ask indemnity or payment of damages from R, employer
of X, on the ground that when the accident occurred, X was then on his way to transact business
with a client of R?
ANSWER:
The situation falls under contracts for X works for R. It was given that the accident had occurred
during working hours of X, that is why X has the right to ask payment of damages to R, specially
if it was also included in the work contract.
SITUATION NO 4
D (debtor) borrowed P10,000 from C (creditor). On the due date of the loan, D could not pay C
because he lost to a robber the P10,000 intended for C. In addition, he suffered financial reverses
and he was short of cash even for his current family’s needs. Is D legally justified to refuse to pay
C?
ANSWER:
D is not legally justified to refuse to pay C for the situation falls under contracts. Both of them
agreed about the contract, which is to pay the loan on the due date, unless C understand the
situation of D.
QUIZ NO 2
After reading and understanding the assigned articles, make sure to take this quiz by writing your
answers on a short bond paper.

SITUATION 1
A wife was about to deliver a child. Her parents-in-law called the doctor. Who should pay the
doctor: the husband or the parents?
ANSWER:
The husband is responsible for paying the doctor since it is his responsibility to his wife as the
father of the child.

SITUATION 2
While driving a car recklessly, X injured a pedestrian. The lawyer of the pedestrian claimed that
X should pay them for the damages. Is he correct? Why or why not? What is your legal basis?
ANSWER:
It is the obligation of X to pay for the damages that he had caused for he is at fault or negligence
although no contractual relation exists between the parties.

SITUATION 3
Z is cleaning her window sill while using her cellphone. Because of her negligence, a flower pot
fell on the street, breaking the arm of her neighbor. Is Z liable? Why or why not?
ANSWER:
Z is liable for the damaged that she caused to another person, her neighbor. She is at fault or
negligence based on the situation stated.
QUIZ NO 3
After reading and understanding the assigned articles, make sure to take this quiz by writing your
answers on a short bond paper.

SITUATION 1
During the Japanese occupation, A and B sought refuge in the house of a certain Villena in
Batangas. When the Japanese neared the place, A and B hid their valuables in Villena’s dugout.
Later, the valuables were lost. A claimed that he had given his things to B as a deposit, and that
therefore B should be liable for the loss. B denied the existence of such deposit. Who is liable to
whom?
ANSWER:
B is not liable for the loss of A. Both parties agreed to hid their valuables in Villena’s dugout. No
one is liable to whom for both of them acted the normal fulfillment of obligation to their own
properties.

SITUATION 2
A priest, A. de la Peña, was the custodian of certain charity funds (P6,641) which he deposited
together with his personal account of (P19,000) in an Iloilo Bank shortly before the American
invasion of the Philippines. During the revolution, dela Peña became a political prisoner and his
bank deposit was confiscated on the ground that they were being used for revolutionary purposes.
Is the priest liable?
ANSWER:
The priest is liable for the charity funds for he is responsible to secure the funds without any
justifiable excuse or reason. It might fall under negligence, where he is unable to fulfill his
obligation and exercise the degree if care required by the circumstances.

SITUATION 3
A man ordered a ten-year-old boy, Jose Ronquillo, to climb a high and rather slippery santol tree,
with a promise to give him part of the fruits. The boy was killed in the act of climbing. Is the man
liable?
ANSWER:
The man is liable for the death of the boy for he is who ordered the action taken by the boy. It is
the man’s negligence which caused failure to exercise the degree of care.
SITUATION 4
Herein private respondents purchased first-class tickets from petitioner at the latter’s office in Cebu
City. They were to board M/V Sweet Grace bound for Catbalogan, Western Samar. Instead of
departing at the scheduled hour of about midnight on July 8, 1972, the vessel set sail at 3:00 am of
July 9, 1972 only to be towed back to Cebu due to engine trouble, arriving there on the same day
at about 4:00 pm. The vessel lifted anchor again on July 10, 1972 at around 8:00 am. Instead of
docking at Catbalogan (the first port of call), the vessel proceeded directly to Tacloban. Private
respondents had no recourse but to disembark and board a ferry boat to Catbalogan. Hence, the
suit for breach of contract of carriage. Whether or not the mechanical defect constitutes a fortuitous
event which would exempt the carrier from liability?
ANSWER:
The carrier have contributed injury to the respondents for it is being negligent for not making any
inspection before the situation, making no valid reason from the liability. Therefore, the
mechanical problems does not exempt the carrier from its liability.

SITUATION 5
Herein plaintiff was a passenger of the public utility jeepney on course from Davao City to Cebu
City. The jeepney was driven by defendant Berfol Camoro and registered under the franchise of
Clemente Fontanar. When the jeepney reached Mandaue City, the right rear tire exploded causing
the vehicle to turn turtle. In the process, the plaintiff who was sitting at the front seat was thrown
out of the vehicle. Plaintiff suffered a lacerated wound on his right palm aside from the injuries he
suffered on his left arm, right thigh, and on his back. Plaintiff filed a case for breach of contract
with damages before the City Court of Cebu City. Defendants, in their answer, alleged that the tire
blowout was beyond their control, taking into account that the tire that exploded was newly bought
and was only slightly used at the time it blew up. Was the tire blow-out a fortuitous event?
ANSWER:
The tire blow-out is not a fortuitous event for it falls under article 1174 that states, mere pecuniary
inability is not an excuse for the non-fulfillment of the obligation. Neither is mere difficulty to
foresee the happening of an event.
QUIZ NO 4
After reading and understanding the assigned articles, make sure to take this quiz by writing your
answers on a short bond paper.

SITUATION 1
Rodriguez and Belgica were co-owners of land in the proportion of 86% and 14%, respectively.
Belgica owed Rodriguez P30,000. To enable Belgica to pay it, it was mutually agreed that
Rodriguez would grant authority to Belgica to sell or mortgage within 70 days 36% of the land, so
that Belgica would be able to raise the money for payment of the loan. FROM WHAT TIME
SHOULD THE 70-DAY PERIOD BEGIN?
ANSWER:
The situation falls under Article 1164, where the obligation to deliver the thing due, and
consequently, the fruits thereof, arises from the time of perfection of the contract. Therefore, it
begins from the time of perfection of the contract.

SITUATION 2
A tenant leased a land on the landlord’s promise that the latter would make improvements on the
property leased. When the landlord did not make the improvements, the tenant sued for specific
performance, that is, to make the landlord do the improvements. Three days later, the landlord
sued for unlawful detainer for non-payment of rent. CAN THE LANDLORD SUE?
ANSWER:
The landlord cannot sue for the creditor’s remedies to demand for a specific performance, and if
it is not made, the tenant can demand recession and so the tenant did not pay for the rent. The
tenant performed the remedies which is granted by law, cannot be sued.

SITUATION 3
Perez on various occasions rendered services as interpreter of English to Pomar. Perez obtained
passes and accompanied Pomar upon his journeys to some of the towns in Laguna. Pomar then
denied having solicited the services of Perez but the latter contends that such services were
solicited by the former. Perez now asks for reasonable compensation for said services. Can Perez
ask for compensation?
ANSWER:
Perez can ask for compensation for it is in quasi contracts, that no one should be unjustly enriched
or benefited at the expense of another. Pomar, is entitled to compensate Perez for rendering a
service for him.

SITUATION 4
A was a stockholder in a mutual building and loan association. Her shares matured in 1940, and
from that time, she ceased to be a stockholder, and instead became its creditor for the value of her
shares. At this point, the officers and members of the Board of Directors entered into an agreement
with the Central Bank concerning the revaluation of the shares. Is A bound by the act of the
Corporation (Association)?
ANSWER:

SITUATION 5
A shipped his cargo in B’s vessel. B and C’s company entered into a contract for C’s company to
unload the cargo from the ship’s hold. In the lifting operations, A’s cargo was damaged. May A
successfully sue C’s company for damages?
ANSWER:
No, C is not liable for any damage that has caused to A for A is a third person in the contract. B
and C already entered into a contract the C will be the one to unload the cargo from the ship’s
hold.

SITUATION 6
A leased his property to B. B subleased part of the premises to C. B violated the conditions of the
lease, so A wanted to rescind the lease contract. C objected because if the lease is cancelled, the
sublease would naturally be affected. Will C’s objection prosper?
ANSWER:
The objection of C will not prosper for he is a stranger to the contract. C has no rights or obligation
under the contract. He has no standing in law to demand or object a decision on the contract.

SITUATION 7
B borrowed some money from A, and entered the service of A as a servant, promising to remain
as such without remuneration until she could find money with which to pay what she had
borrowed. A seeks to receive the amount of the loan, because B left the house of A without having
paid the loan borrowed, praying that until the amount of the loan is paid, B be obliged to render
services as a servant without remuneration. B, on the other hand, demanded payment of wages for
the services rendered. Is the remedy prayed for by A valid? Can B demand for remuneration?
ANSWER:
The remedy prayed for by A is valid for it is promised that B will remain and render a service until
she could find money to pay what she had borrowed. Both parties agreed in the first place, and B
cannot demand for remuneration, for B failed to communicate well and left without any consent
from the other.
QUIZ NO 5
Determine what are the cases when contracts can be validly rescinded.

SITUATION 1
D owes C ₱100,000. Since D fails to pay, C expressed its willingness to accept the car of D, with
the same value, more or less, in payment for his debt. D, in bad faith, sold the car to X. Has C the
right to ask for the rescission of the sale?
ANSWER:
C can ask for rescission of the sale, for he has a valid ground because there is an existing credit
prior to the sale to be rescinded. According to article 1385, rescission creates obligation to return
things which were the object of the contract, together with their fruits, and the price with its
interest.

SITUATION 2
F, guardian of M (minor), sold to B a property of M with a market value of ₱50,000 for only
₱37,000, or a difference of more than ¼ (₱12,500) of the value. If rescission of the sale is
demanded, what possible defense under the law can B present to avoid rescission?
ANSWER:
B is an innocent purchaser which is in good faith and also takes legal possession so rescission
cannot take place. It is stated in the article 1355, that except in cases specified by law, lesion or
inadequacy of cause shall not invalidate a contract, unless there has been fraud, mistake or undue
influence. B can use the contract to avoid rescission.

SITUATION 3
The City of Manila has a contract with Noble stipulating that the City would buy a certain piece
of land. It was also agreed that while the purchase price was not yet paid, the City would occupy
the land as a tenant and would pay rentals therefor. Later, the City refused to pay the purchase
price asserting that it was excessive considering the amount it had already paid by way of rentals,
and that therefore the contract should be rescinded because the contract was far more favorable for
Noble than for the City of Manila. Should rescission be granted?
ANSWER:
It is stated in article 1381, that those agreed upon in representation of absentees, if latter suffer the
lesion stated in the preceding number. Rescission cannot be granted for both of the parties agreed
upon the beginning about the way on how the purchase will work. The rental fee and the purchase
fee differ from one another and does not show any favor to either of the sides.

SITUATION 4
To defraud his creditor, A sold his property to B (who is in good faith). Later B sold the property
to C, who is in bad faith. May the creditor rescind, although the property is now in the possession
of C?
ANSWER:
It is stated in article 1355, that except in cases specified by law, lesion or inadequacy of cause shall
not invalidate a contract, unless there has been fraud, mistake or undue influence. The creditor
may rescind even though the property is now in the possession of C.
LONG QUIZ
Determine the different kinds of defective contracts

SITUATION 1
Certain co-heirs assigned, in 1939 in favor of a co-heir, a parcel of land in Loakan, Baguio. The
document was registered in 1940. The assignors sued in 1958 for the annulment of the assignment,
claiming that they thought they were signing a mere authority to sell, not the sale itself. Has the
time to file an action expired?
ANSWER:
The situation falls under Article 1391, which states that the action for annulment shall be bought
within 4 years. Thus, the time to file an action did not expired. The assignors are not aware of the
reason which render the contract which is voidable in 1940.

SITUATION 2
A challenges B to a chess match; loser to pay the winner ₱100,000. B accepts the challenge. A
wins the match but B refuses to pay. May A sue B for the ₱100,000? Why or why not?
ANSWER:
The situation falls under the article 1392 which states that ratification extinguishes the action to
annul a voidable contract. B willingly accepted the challenge which means that both parties have
agreed into a contract.

SITUATION 3
S, a minor, sold a property to B. Later, the sale is annulled on the grounds of S’s minority. I s S
bound to return the price received by him?
ANSWER:
This situation falls under article 1399. S is not bound to return the price received by him for he did
not benefited from the thing or price from the property.

SITUATION 4
In the same problem, suppose S, upon reaching the age of majority, decided to ratify or respect the
contract. Has B the right to refuse the ratification and demand mutual restitution of the property
and the price?
ANSWER:
According to article 1395, ratification does not require the conformity of the contracting party who
has no right to bring the action for annulment. Thus, B has no right to refuse the ratification and
demand mutual restitution of the property and the price.

SITUATION 5
Again, in the same problem, suppose the sale was annulled by the court, what are the rights of the
parties if the property was lost or destroyed?
a. Without the fault of B
b. Through the fault of B
ANSWER:
a. Without the fault of B according to the article 1400, B is not obligated to make restitution
because the loss was not his fault, but S cannot be compelled to restore what he is obligated
to refund under the decke of annulment.

b. According to article 1400, B's duty is not discharged, but is transformed into an indemnity
or payment for damages consisting of the value of the period of the loss plus interest on
the same date and the fruits received from the time the property was handed to him until
the time of its loss.

SITUATION 6
T, an insane person, entered into a contract with C, a minor. What is the effect of ratification?
a. By either; and
b. By both, after becoming incapacitated
ANSWER:
a. Under article 1407, if the parent or guardian of either T or C ratifies the contract it
becomes voidable.

b. Under article 1407, if T and C ratifies the contract after becoming both incapacitated, the
contract is validated and its validity retroacts to the time it was entered into.
SITUATION 7
D (debtor) owes C (creditor) ₱10,000. T (third person) orally promised to assume the obligation
of D. Can the promise of T be proved by the testimony of a witness who was present when T made
the same?
ANSWER:
T’s promise can be proven by the testimony of a witness. Under article 1403, 2.b, it is stated that
a verbally made promise is not collateral “promise to answer for the debt default, or miscarriage
of another” is enforceable and could be proven by oral evidence. Therefore, a testimony of a
witness can prove T’s promise.

SITUATION 8
S orally agreed to sell his piano for ₱7,000 to B who made a partial payment of ₱1,000. Later, S
denied there was such a sale. Can B enforce the sale considering that the contract was oral and the
price was more than ₱500?
ANSWER:
B can enforce the sale considering that the contract was oral and the price was more than 500
because under article 1403, 2.d it is stated that if there is a partial or full payment above 500, it is
taken out of the operation of the statute of frauds and the contract may enforced even if it was
mode orally, therefore, B can enforce the sale.

SITUATION 9
S (seller) and B (buyer) entered an absolutely simulated contract of sale of a parcel of land. S
brought action in court to recover the land only after 20 years. Is it correct for the court to dismiss
the action because of the long lapse of time?
ANSWER:
It is not right four the court to dismiss the action because of the lapse of time since article 1410
states that the action or defense for the declaration of the inexistence of a contract does not
prescribe. The action or defense is imprescriptible in the sense that a party seeking to enforce an
invalid contract can always raise the defense of nullity, even if the court dismisses the action.

SITUATION 10
W (woman) agreed to stay in the house of M (man) as the latter’s live-in partner for one year in
consideration of the latter’s promise to pay her ₱100,000 after said period. W complied with her
part of the agreement, but M reneged on his promise. Is W entitled to recover from M?
ANSWER:
W is not entitled to recover from M because, according to article 1412, number 1, neither party
may seek the fulfillment of the other's undertaking in an immoral conduct that does not constitute
a crime; hence, W is not entitled to recover from M's promise to pay her $100,000.
ACTIVITIES