[Solved] A & B entered into a contract of loan in the amount of P1M with interest at 192% per annum. When the obligation became due and demandable B failed to pay despite demand, hence, A filed a complaint against B. On the interest rate, what is a valid contention of B?

Q.	A & B entered into a contract of loan in the amount of P1M with interest at 192% per annum. When the obligation became due and demandable B failed to pay despite demand, hence, A filed a complaint against B. On the interest rate, what is a valid contention of B?
A.	B can ask the court to declare it void on the ground that it is contrary to the Usury Law.
B.	B can ask the court to declare it void and be not liable at all.
C.	B can ask the court to delacre it void on the ground that it is unconscionable, hence, contrary to morals and the court may fix the interest rate at its discretion.
D.	A can contend that the interest rate is valid because of the principle of binding effect of contracts.
Answer» C. B can ask the court to delacre it void on the ground that it is unconscionable, hence, contrary to morals and the court may fix the interest rate at its discretion.

854

Do you find this helpful?

View all MCQs in

Philippines Civil Law Society

Discussion

No comments yet

Related MCQs

A lent money to B in 1950 payable in 1951. Despite demand, B failed to pay. In 2011, his daughter who recently became a lawyer sent a demand for payment to B who sent a letter acknowledging the debt and asked for one (1) year to pay but failed to pay within the extended period. A filed a complaint for sum of money. How do you think the court will decide?
A is indebted to ABC Corporation in the amount of P100M. Despite efforts to collect from A, the latter failed to pay due to business reverses as he has no more assets. In order to maintain a more accurate inventory of the worth of its current assets, ABC Corp. was forced to write-off A’s obligation. One (1) year later, A won the lotto draw in the US in the amount of $100M. Learning of the good luck of A, it demanded for payment, but A refused to pay contending that his obligation was extinguished when it was written-off. Is A correct?
A & B entered into an oral contract of sale of A’s car worth P4.5M where the object was supposed to be delivered upon payment of the price. When A went to B’s house to pay the price, the latter refused to sell hence, a complaint for specific performance was filed by A. will the complaint prosper?
A and B entered into a contract for A to manufacture boxes to be used by B for his export business. B paid the amount of P2M, but A failed to manufacture the boxes despite repeated follow-up of the immediate production of the boxes. B filed a complaint for reimbursement of the P2M.
A entered into a contract whereby he obligated himself to pay B on or before September in the form of Australian currency. When the obligation became due and demandable, A delivered to B Australian currency. Is A correct?
A is the owner of a parcel of land. He entered into a contract to sell with B with an obligation to pay the price within one (1) year. B failed to pay. State the effect of non-payment.
X, Y & Z entered into a contract of loan with A obligating themselves solidarily to pay to A without need of demand on June 16. A condoned X’s obligation; Y is insolvent. How much can A collect if the amount is P900,000.00?
A obtained a loan from B secured by a mortgage over his house & lot. B failed to pay hence, A foreclosed the mortgage but it was sold for less than the amount of the obligation. Can B recover the deficiency?
Magdalene and Shantung Company entered into a contract of agency before the consul general of the Philippines in Singapore. They stipulated that Magdalene shall be the administrator of the real properties of Shantung Company in the said country. By virtue of the said contract, Magdalene sold the 1 hectare land of Shantung Company located in Singapore to Mayhem Real Estate Corporation without any special power of attorney. The said contract of sale was executed before the vice consul of the Philippines in Singapore. Under the laws of Singapore, the sale of a real property by an agent without a special power of attorney is valid. Shantung Company filed a suit for the annulment of the contract of sale on the ground that Magdalene has no authority to sell the property. If you were the judge, which of the following courses of action should you take?
X brought a house and lot from Y valued at P5M. He paid P3M and for the balance, he executed a promissory note with interest at 10% to be paid within 90 days. ABC Corporation executed a surety for the balance. X failed to pay, hence, ABC paid the amount and sued X for the interest and the principal. X contended that he is not bound due to novation when Y accepted the security. Is X correct?