SALES- DIAGNOSTIC EXERCISES
TEST I- MULTIPLE CHOICE- select the best answer by writing the letter of your choice.
1. A contract whereby one of the parties obligates himself to transfer the ownership of and to deliver a determinate
thing and the other to pay therefor a price certain in money or its equivalent is a contract of;
a. Barter
b. Sale
c. Dacion en pago
d. Mortgage
2. The following are the essential elements of a contract of sale, except:
a. Consent of the contracting parties
b. Subject matter which should be determinate
c. Price which is certain in money or its equivalent
d. Warranty against eviction and against hidden defects
3. The following are the characteristics of a contract of sale, except:
a. Principal , which means that a contract of safe can stand by itself
b. Real, which requires the delivery of the object of the contract of sale for its perfection.
c. Onerous, where rights are required in exchange of a valuable consideration.
d. Bilateral, which means that both parties are bound reciprocally to each other.
4. One of the following characteristics of dacion en pago is also characteristic of a contract of sale. Which is it?
a. There is a pre-existing credit.
b. Obligations are extinguished.
c. There is less freedom in fixing the price.
d. Ownership of the object is transferred to the other party.
5. The following are characteristics of a contract of sale except for one which refers to payment by cession. Which
characteristic refers to payment by cession?
a. There is no pre-existing credit.
b. The cause or consideration is the price.
c. There is more freedom in fixing the price.
d. Assignee of the property acquires the right to sell the thing but not the ownership thereof.
6. The following items pertain to either a contract- of sale or a contract to sell.
I. Ownership of the thing sold is transferred upon delivery.
II. Ownership of the thing is transferred to the buyer at some future time.
III. The risk of loss is on the buyer.
IV. The risk of loss is on the seller.
Based on the above data, which of the following is correct?
a. Items I and III pertain to a contract to sell.
b. Items II and III pertain to a contract to sell.
c. Items II and IV pertain to a contract of sale.
d. Items I and III pertain to a contract of sale.
7. One of the following is not a requisite of the object of a contract of sale. Which is it?
a. It must be within the commerce of men.
b. It must be licit.
c. It must be determinate or determinable.
d. Vendor must have the right to transfer the ownership of the thing at -the time of sale.
8. The following items pertain to either emptio rei sperati or emptio spei. Based on the above information, which of
the following is correct?
a. Items I and iI pertain to emptio rei sperati.
b. Items II and III pertain to emptio spei.
c. Items II and III pertain to emptio rei sperati.
d. Items III and IV pertain to emptio spei.
11. Process of manufacturing for its customers at the time the orders were received. Michael Barkley, who is 7' tall
and wears size 18 shoes, was provided three days later, with a pair that was specially made for him since
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Armstrong does not make shoes of his size. What kind of contracts were entered into for the shoes provided to
the two basketball players?
a. The contract for the pair of shoes provided to Charles Jordan is a contract for a piece of work, while that for
Michael Barkley is a contract of sale.
b. The contract for the pair of shoes provided to Charles Jordan is a contract of sale, while that for Michael
Barkley is a contract for a piece of work.
c. Both contracts are contracts of sale.
d. Both contracts are contracts for a piece of work.
12. S and B entered into a contract whereby S transferred to B a specific car for the price of P200,000.00, while B gave
to SP90,000.00in cash and a diamond ring worth P110,000.00.The heading of the written contract signed by the
parties reads “Contract of Sale".
a. The contract is void because the intention of the parties is void since the value of the diamond ring is more
than the monetary consideration given.
b. The contract is a valid contract of sale as intended by the parties regardless of whether the monetary
consideration is more or less than the value of the property consideration.
c. The contract is a valid contract of barter since the value of the property given is more than the monetary
consideration. The intention of the parties is immaterial.
d. The contract is partly a contract of barter and partly a contract of sale.
13. The price in a contract of sale is certain, except:
a. When the parties have fixed or agreed upon a, definite amount.
b. If the price is certain with 'reference to another thing certain.
c. If the fixing of the price is left to the discretion of one of the contracting parties and the price fixed is not
accepted by the other party.
d. If the price fixed is that which the thing sold would have on a definite day or in a particular exchange or
market.
14. On January 1, S orally sold to B a specific ring for P450.00. The parties agreed that S shall deliver the ring to B on
January 5, while B shall pay the price on January 7.
a. The contract is perfected on January 5, when the ring is delivered by S to B.
b. The contract is perfected on January 1, when the parties had a meeting of mind on the object and the price.
c. The contract is perfected on January 7, when the price is paid, since both parties would by then have
performed their obligations in the contract.
d. There is no perfected contract because the sale was made orally.
15. A sum of money paid, or a thing delivered upon the making of a contrast for the sale of goods, to bind the bargain,
the delivery and acceptance of which makes the final assent of both parties to the contract.
a. Option money
b. Earnest money
c. Reservation money
d. Down payment
16. S orally offered to sell a certain diamond ring .to B for P50,000.00. B accepted the offer and to prove that he was
in earnest, he gave S P1,000.00. The parties agreed that the delivery of the ring and the payment of the price
would be made 30 days later. On due date:
a. S may collect from B P50,000.00.
b. S may collect from B P49,000.00.
c. S cannot enforce payment because the contract was not reduced to writing.
d. S cannot enforce payment because there was no contract of sale yet.
17. On June It 2010, S sold to B 50 units of machines which were scheduled to arrive from Japan the following day on
board the, vessel "MT Nippon Maru". The sale was evidenced by an invoice identifying each machine by serial
number. Each machine was priced at P10,000.00. Unknown to the parties, 30 units were damaged beyond repair
by seawater on May 31, 2010. Based on the foregoing, which of the following statements is incorrect?
a. B may rescind the whole contract.
b. B may demand delivery of the remaining 20 units and pay the price therefor.
c. S may require payment of the whole shipment from B since S was not aware of the damage caused on the
machines at the time of sale.
d. S has no option to rescind the whole contract or require payment of the remaining 20 units.
18. It refers to the delivery of the thing sold from hand to hand in case of movables, or the taking of possession with
respect to immovables, in the presence and with the consent of the vendor.
a. Actual or real delivery.
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b. Traditio constitutum possessorium.
c. Traditio longa manu.
d. Traditio brevi manu.
19. On May 1, 2010, S sold to B through a private instrument 20 sacks of corn stored in the only warehouse of S. On
May 10, 2010, S delivered the keys to the warehouse to B. The delivery made by S to B is known as:
a. Constructive delivery by legal formalities
b. Symbolic delivery by tradition clavium
c. Traditio longa manu
d. Tradition brevi manu
20. Delivery of incorporeal property may be made through any of the following means, except:
a. Execution of a public document.
b. Placing the titles of ownership in the possession of the vendee.
c. Use by the vendee of his rights, with the debtor's consent.
d. Execution of private instrument.
21. One of the following statements on the transfer of ownership of the thing in "sale on trial" is incorrect. Which is
it?
a. Ownership of the thing is transferred to the vendee when he signifies his approval or acceptance to the
vendor.
b. Ownership of the thing is transferred to the vendee when he does an act adopting the transaction.
c. Ownership of the thing is transferred to the vendee if the time fixed for the return of the thing has expired
and the vendee retains the thing without giving notice of rejection or acceptance to the vendor.
d. Ownership of the thing is transferred to the vendee upon delivery.
22. On March 1, 2010, S sold and delivered to B a television set for P10,000.00 "on sale or return" giving B up to
March.16, 2010 within which to return the television set. On March 10, 2010, the television set was burned
through no fault of B. Based on the foregoing, which of the following statements is incorrect?
a. B must pay' the price of the television set.
b. S must bear the loss since the time for the return of the television set had not yet expired.
c. The ownership of the television set was transferred to B upon delivery to him.
d. B must bear the loss of the television set.
23. In one of the following cases, delivery of the goods to a carrier for the purpose of transmission to the buyer
transfers ownership to the latter. Which one is it?
a. When by the terms of the bill of lading, the goods are to be delivered to the seller or his agent.
b. When by the terms of the bill of lading, the goods are to be delivered to the order of the buyer or his agent
but the seller retains the bill of lading.
c. When the seller draws a bill of exchange on the buyer for the price of the ' goods and transmits such bill of
exchange and the bill of lading to the buyer to secure acceptance or payment of the bill of exchange and the
buyer dishonors the bill of exchange.
d. When the owner does not reserve the right of possession or ownership of the thing sold upon delivery to the
carrier.
24. 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 to:
a. Exact fulfillment of the obligation, should the vendee fail to pay any number of installments.
b. Cancel the sale, should the vendee's failure to pay cover two or more installments.
c. Foreclose the chattel mortgage on the property if the vendee's failure to pay cover two or more installments
and recover any deficiency after the foreclosure sale if they have stipulated it.
d. Foreclose the chattel mortgage on the property if the vendee's failure to pay cover two or more installments
but he may no longer recover any deficiency after the foreclosure sale.
25. Baldomero bought a residential house and lot from Sta. Ana Realty for P250,000.00 giving a down payment of
P10,000.00and promising to pay the balance of P240,000.00 in 20 years in installments of P1,000.00. After paying
72 installments, Baldomero defaulted in the payment of the 73rd installment and subsequent ones. Despite the
grace- period he had earned, he was not able to make any further payments. Accordingly, Sta. Ana Realty
cancelled the sale. How much cash surrender value is Baldomero entitled to receive?
a. P45,100.00.
b. P39,600.00.
c. P36,000-00.
d. P41,000-00.
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26. S stole a ring belonging to 0. Subsequently, the ring was offered for sale at a public auction where X, who was not
aware that the ring was stolen, bought it. A few weeks later, 0 saw the ring and recognized it as his. Based on the
foregoing information, which of the following statements is correct?
a. 0 may recover the ring from X without reimbursing X since 0 was unlawfully deprived of the ring.
b. 0 may recover the ring from X but he has to reimburse X since X acquired title to the ring.
c. 0 may no longer recover the ring even if he is willing to reimburse X.
d. X did not acquire title to the ring since the auctioneer had no valid title thereto.
27. Where the seller of goods has a voidable title thereto, but his title has not been avoided at the time of the sale,
the buyer acquires title' to the goods. Such acquisition of title has the following requisites, except the:
a. buyer must have bought the goods in good faith.
b. buyer must have bought them for value.
c. buyer bought them without notice of the seller's defect of title.
d. party from whom the seller obtained the goods must ratify the sale.
28. An unpaid seller has the following rights, except:
a. A lien on the goods or the right to retain them for the price while he is in possession of them.
b. In case of insolvency of the buyer, a right of stopping the goods in transitu after he has parted with the
possession of them.
c. A right of repurchase.
d. A right to rescind.
29. An unpaid seller loses his lien on the goods in the following cases, except:
a. when he delivers the goods to a carrier or other bailee for the purpose of transmission to the buyer without
reserving the right of ownership in the goods.
b. when the buyer or his agent lawfully obtains possession of the goods.
c. when the seller waives his possessory lien.
d. when he has obtained judgment for the price of the goods.
30. Three of the following are the requisites in order that an unpaid seller may exercise his right of stoppage of
transitu. Which one is not?
a. The seller is unpaid.
b. The seller has not parted. with the possession of the goods.
c. The goods are in transit.
d. The buyer is or becomes insolvent.
31. Goods are still in transit:
a. If the buyer or his agent obtains delivery of the goods before their arrival at the appointed destination.
b. When the carrier acknowledges possession of the goods as bailee for the buyer after the arrival of the goods
at the place of destination.
c. If the carrier or other bailee wrongfully refuses to deliver the goods to the buyer or his agent.
d. 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 received them back.
32. An unpaid seller's right to resell the goods is available in the following cases, except:
a. if the goods are of a perishable nature.
b. when the seller reserved the right to resell the goods.
c. when the buyer has defaulted in the payment of the price for an unreasonable time.
d. when the seller has lost his lien on the goods.
33. Barrameda bought a piece of land from Sarmiento for a lump sum of P120,000.00. Aside from mentioning the
boundaries in the contract which is required in the sale of real estate, the contract also states that the piece of
land consists of1,000square meters. Before delivery, Sarmiento discovered that the piece of land actually contains
1,200 square meters.
a. Sarmiento must deliver all the1,200 square meters; Barrameda must pay P120,000.00plus an additional
amount for the excess of 200 square meters.
b. Sarmiento is required to deliver only1,000square meters; Barrameda must pay the contract price of
P120,000.00.
c. Sarmiento must deliver all the1,200square meters; Barrameda has to pay only P120,000.00.
d. Neither party is required to perform the obligation because of mistake.
34. Sison sold a registered piece 'of land to Bautista on May 1,2010in a public instrument. On May 3, 2010, Sison
sold in a private instrument the same piece of land to Cruz, who took physical possession of the land. Neither
buyer was aware of the sate made to the other.