A suspensive condition is a term or clause within a contract that clearly stipulates a particular

criterion that must be met in order for the contract to come into force. Should the suspensive
condition(s) not be met, the contract will be void.

Suspensive Condition:

A suspensive condition suspends the rights and obligations under a contract until the condition is fulfilled.
Once the condition is fulfilled the contract is deemed (itinuturing)to have been in force from the effective
date, not from the date of the fulfilment of the suspensive condition.

However, if the suspensive condition is not fulfilled, then no binding contract between the parties comes
into existence. This is not remedied by either party performing in terms of the contract.

One must therefore be very clear as to the date by when the condition must be fulfilled. If the condition is
not met by the agreed date it may result in a party performing under the contract, which the party believes
to be binding only to find out too late down the line that the contract is not binding and that the party is
unable to claim specific performance or contractual damages.

An example of a suspensive condition would be as follows:

“Mrs Smith must provide proof that she has resigned as a director by 15 March 2018 or such later date as
may be agreed between the parties”.

Resolutive Condition:

When dealing with a resolutive condition, the contract is immediately binding with all rights and
obligations coming into existence from day one of the contract and there is no suspension of these rights
and obligations. Unlike a suspensive condition, if a resolutive condition is fulfilled, it would have the effect
of terminating the contract with retrospect between the parties and the operation of the rights and
obligations between the parties would immediately cease to exist. The parties would then need to be
restored to their pre-contractual state, which is often complicated as this may for example require the
unbundling of a complicated transaction. In this instance it may be better suited, to avoid such
unbundling, to make use of a suspensive condition as opposed to a resolutive condition.

An example of a resolutive condition would be as follows:

“In the event Mrs Smith does not provide proof that she has resigned as a director of ABC Company by
15 March 2018 the contract will be deemed to be cancelled and be of no force or effect”

An obligation with a period is a kind of obligation wherein its performance is subject

to a term or period, and can only be demandable when that period expires.
Such period is 'a day certain' which must necessarily come, although it may not be
known when.

For whose benefit is the period constituted?

General Rule:
When a period has been agreed upon for the performance or fulfillment of an obligation,
it is presumed to have been established for the benefit of both the creditor and the
debtor.

Exception:

When it appears from the tenor of the period or other circumstances that it was
established for the benefit of one of the parties.

What is the effect of the term being for the benefit of either
the creditor or the debtor?

1. When it is for the benefit of the Creditor – Creditor may demand the performance of
the obligation at any time but the debtor cannot compel him to accept payment before
the expiration of the period (e.g. “on demand”)

2. When it is for the benefit of the Debtor – Debtor may oppose any premature demand
on the part of the creditor for performance of the obligation, or if he so desires, he may
renounce the benefit of the period by performing his obligation in advance. (Manresa)

What is the effect of a fortuitous event in an obligation with

a period?

It only relieves the contracting parties from the fulfillment of their respective obligation
during the term or period.

When may the court fix the period?

1. If the obligation does not fix a period, but from its nature and circumstances it can be
inferred that a period was intended by the parties

2. If the duration of the period depends upon the will of the debtor
3. In case of reciprocal obligations, when there is a just cause for fixing the period

4. If the debtor binds himself when his means permit him to do so

When may a debtor lose his right to make use of the

period?

1. Insolvency of the debtor, unless security is provided

2. Did not deliver security promised

3. Impaired security through his own acts or through fortuitous event, unless he gives a
new security equally satisfactory (if impairment is without the fault of DR, he shall retain
the right)

4. Violates undertaking in consideration of extension of period

5. Debtor attempts to abscond (Art. 1198, NCC)

in:

Obligations and Contracts, Kinds of Obligation

Obligation with a Period

EDIT

COMMENTS SHARE

mainly discussed in Section 2 (1198-1193) of Chapter 4, Book IV of the Civil Code of the Philippines.
An obligation with a period is a kind of obligation wherein its performance is subject to a term
or period, and can only be demandable when that period expires. Such period is 'a day certain'
which must necessarily come, although it may not be known when.
 Contents

[show]

Period vs Condition
in terms of fulfillment:

 a period is a future and certain event.

 a condition is an uncertain event.

in terms of time:

 a period refers only to the future.

 a condition may refer also to the past.

in terms of influence on the obligation:

 a period fixes the time for the performance of an obligation. It does prevent its existence
(suspensive) and conception in due time (resolutory).
 a condition causes the existence or the extinguishment of an obligation.

Both a period and a condition are required to be legally and physically possible to be valid.

Kinds of Period
according to effect:

 Suspensive period (ex die) - wherein the obligation begins only from a day certain or upon the
arrival of the period; as in:
 D will pay C beginning tomorrow.
 D will support C upon the death of his guardian.
 Resolutory period (in diem) - wherein the obligation is performed only up to a day certain and
terminated upon the arrival of the period; as in:
 D will pay C every week until the end of the month.
 D will support C until his death.

according to source:

 Legal period - when it is provided by law.

 Conventional/Voluntary period - whent it is agreed upon by the parties.
  Judicial period - when it is fixed by the court.

according to definiteness:

 Definite period - when it is fixed and its exact date or time is known.
 Indefinite period - when it is not fixed and its exact date or time is unknown, but surely happen.

Computation of Period
A period shall be based on time as defined by the law in terms of:

 years - are of three hundred sixty-five (365) days each, whether it is a regular year or a leap year;
or twelve (12) calendar months.
 months - are of thirty (30) days; unless it refers to a specific calendar month in which case it shall
be computed according to the number of days the specific month contains.
 days - of twenty-four (24) hours.
 nights - from sunset to sunrise.
 calendar month - without regard to the number of days it may contain.

In computing a period, the first day shall be excluded, and the last day included.

It is also important to note that the phrases “within 10 years” (eg. Jan. 1, 2020 - Jan. 1, 2030) and
“within the 10th year” (eg. Jan. 1, 2030 - Dec. 31, 2030) are different.

Effect of Payment before the Period

A thing or money given before the arrival of the period may be recovered by the debtor:

 if he is unaware of such period.

 if he mistakenly thought that such period has arrived.

The debtor shall have the burden of proof of either such circumstances, otherwise he is presumed
to be knowledgeable of the period.

The creditor, for his part, has the obligation to return the thing or money received under such
circumstances. This obligation arises from solutio indebiti that prevents unjust enrichment.

The thing or money should be returned with its fruits and interests. But if the period has already
arrived, only the fruits and insterests should be recovered
The recovery of the thing or money is not applicable if the period depends on the sole-will of the
debtor; he is deemed to have impliedly renounced the period.

Examples
 D is obliged to give C a book on June 30, 2020. D is unaware of the period and prematurely give it
on May 30, 2020. In this case, D may recover the cellphone from C who has the duty to return it.
 D is obliged to pay C Php10,000 on June 30, 2020. D paid the amount to C on June 20, 2020,
mistakenly believing that it was already due. If before June 30, 2020, D may recover the
Php10,000 plus interests. If after June 30, 2020, D may only recover the interests.

Benefits of the Period

A period fixed by the parties is presumed to have been established for the benefit of both the
debtor and the creditor. This presumption is rebuttable.

A period may be established in favor of one of the parties as shown in the tenor (actual wording)
of the obligation or other circumstances. The period may either be:

 for the benefit of the debtor; he cannot be compelled to perform the obligation before the arrival
of the period and may perform the obligation in advance.
 for the benefit of the creditor; he cannot be compelled to accept the performance before the
arrival of the period and may demand the performance of the obligation in advance.

A period may also be waived if the creditor accepts a partial payment or performance from the
debtor without any explanation. Such partial performance is presumed to be intentional and
voluntary on the part of the creditor.

Examples
 D is obliged to give C a book 'on or before' June 30, 2020. Here, the period is for the benefit of D
(the debtor).
 D is obliged to pay C Php10,000 'on exactly' June 30, 2020 with the stipulation that the payment
may be demanded by C before the said date. Here, the period is for the benefit of C (the
creditor).
 D is obliged to pay C Php10,000 on exactly July 30, 2020. D paid Php5,000 (as partial) to C who
unconditionally accepted it. Here, the period is presumed to be waived by C (the creditor).
Power to Fix Period by the Court
The court may fix a period:

 when there is no fixed period, but it can be inferred that a period was intended by the
parties from its nature and the circumstances.
 when the duration of the period depends upon sole will of the debtor.

In determining a period, the court aims:

 to enforce the intention of the parties, not to modify the obligation.

 to prevent the possibility of breach of obligation.

A complaint for right of action (to fix a period) should be supported by:

 facts showing or inferring that a period for the performance of obligation was intended by the
parties.
 facts showing that obligation is favorable to one party but forced upon unfavorably to the other.

Such complaint must expressly ask for the court for a period, unless the facts are sufficient to
show the need for such right of action.

A period cannot be fixed by the court:

 if such period is agreed upon by the parties and has already lapsed or expired.
 if such period was already (previously) fixed by the court with the consent and acceptance by the
parties.

However, the parties may create a new period under a new agreement.

Examples
 D is obliged to deliver C a book, but there is no fixed period for the delivery. Their obligation has a
stipulation of late delivery penalty. Here, the court can fix the period based on the fact that the
obligation has a stipulation of late delivery penalty indicating the intention of the parties that the
book be delivered at a definite time.
 D is obliged to pay C a rent of Php10,000 every month for a lease beginning on July 1 of this year
to continue as long as the rent is being paid. Here, the court can fix the period as the duration
depends upon the will of D (the debtor), since he may extend the lease that should have been
temporary.
  D is obliged to pay C Php10,000 on July 30, 2020, which is the period agreed upon by both parties.
After July 30, 2020, D filed for a right of action to fix the expired period. Here, the court shall deny
D such action.
 D is obliged to pay C Php10,000 on July 30, 2020, which is the period set by the court. D filed for a
right of action to fix the period again. Here, the court shall deny D such action.

Benefit of the Period lost by the Debtor

The debtor shall lose every right to make use of the period:

 when he becomes insolvent (assets<liabilities) or unable to pay his debts as they mature, unless
he gives a sufficient guaranty or security for such debts.
 when he does not furnish or provide the guarantees or securities promised to the creditor.
 when the guarantees or securities promised are either impaired (due to his fault or negligence) or
have disappeared/lost (due to a fortuitous event), unless immediately replaced with something of
equal value.
 when he violates any undertaking that are taken into consideration in the agreement to the
period by the creditor.
 when he attempts to abscond or escape the obligation secretly.

In such cases, the period is extinguished and the obligation becomes obligation becomes pure,
and hence demandable at once.

Examples
 D is obliged to pay C Php10,000 on June 30, 2020. If D becomes bankrupt (insolvent) before that
date, C can demand immediate delivery from D who cannot give any guaranty or security for the
debt.
 D is obliged to pay C Php10,000 on July 30, 2020 with the promise to mortgage his land to secure
the debt. D failed to pay the debt and hence his land can be claimed by C. If D also fails to furnish
his land, C can demand immediate action.
 D is obliged to pay C Php10,000 on July 30, 2020 with a house as security.
 If that house is damaged by a fire caused by D, then C can demand immediate action,
unless D give a new security that is equally satisfactory
  If that house is destroyed (disappeared) by a storm (fortuitous event), then C can demand
immediate action, unless D give a new security that is equally satisfactory. The destruction
shall be to the point that the house can no longer be deemed a 'house'.
 D is obliged to give C a book on June 30, 2020. C agreed to that date since D promised to give him
a free e-book. If D fails to give the promised e-book, C can demand immediate action.
 D is obliged give C a book on June 30, 2020. D changed his contact number without informing C. If
D did that to escape the obligation, C can demand immediate action.

Classification of obligations under the Civil Code:

1. Pure, conditional, and with a term or period.

Pure obligation is one who effectivity or extinguishment does not depend upon the fulfillment or non-
fulfillment of a condition or upon the expiration of a term or period, and which, as a consequence, is
characterized by the quality of immediate demandability. (Art. 1179)

An obligation is said to be conditional when its effectivity is subordinated to the fulfillment or non-
fulfillment of a future and uncertain fact or event. Conditions are traditionally classified as follows:

a. Suspensive is when the fulfillment of the condition results in the acquisition of rights arising out of the
obligation, while resolutory condition is when the fulfillment of the condition results in the
extinguishment of rights arising out of the obligation.

b. Potestative is when the fulfillment of the condition depends upon the will of a party to the obligation,
casual depends upon chance and/or upon the will of a third person, and mixed arises partly upon the
will of a party and partly upon chance and/or the will of 3rd person.

When the fulfillment of the condition depends upon the sole will of the debtor, the conditional
obligation shall be void. (Art. 1182) (Q14, 1997 Bar)
Obligation with a term (period) may be defined as those whose demandability or extinguishment are
subject to the expiration of a term or period. When the duration of a term or period is left exlusively to
the will of the debtor, the obligation is still valid.

If the event will necessarily come, although the date or time when it will come may be uncertain, the
event constitute a day certain, hence, the obligation is one with a term. However, if the uncertainty
consists in whether the day will come or not, the event constitutes a condition, hence, the obligation is
conditional.

2. Alternative and Facultative

Alternative obligations refers to those juridical relations which comprehend several objects or
prestations which are due, but the payment or performance of one of them would be sufficient. On the
other hand, facultative refers to those juridical relations where only one subject or prestation has been
agreed upon by the parties, but the obligor may deliver or render another in substitution.

3. Joint and Solidary

A joint obligation is an obligation where each of the creditors is entitled to demand the payment of only
a proportionate part of the credit, while each of the debtor is liable for the payment of only a
proportionate part of the debt. In solidary obligation, each creditors is entitled to damand the payment
of the entire credit, while each of the debtors is liable for the payment of the entire credit.

An obligation is solidary in the following cases:

a. When the obligation expressly so states.

b. When the law requires solidarity.

c. When the nature of the obligation requires solidarity.

4. Divisible and Indivisible

Divisible obligations are those which have as their object a prestation which is susceptible of partial
performance without the essence of the obligation being changed. Individisible obligation are those
which have as their object a prestation which is not susceptible of partial performance, because
otherwise the essence of the obligation will be changed.

5. Obligations with a penal clause

One with an accessory undertaking (penal clause) by virtue of which the obligor assumes a greater
liability in case of breach of the obligation.