1) The Civil Code idea of a “condition”

Under the Civil Code of the Philippines, an obligation may be pure (demandable at once) or conditional. A condition is an event (or fact) upon which the effectivity of an obligation depends—either:

a future and uncertain event, or
a past event unknown to the parties (Civil Code, Art. 1179).

What makes a condition a condition is uncertainty: it may happen or may not happen. If the event is certain to happen (even if the date is unknown), it is generally treated as a period/term, not a condition.

The Civil Code also recognizes that the acquisition of rights—and the extinguishment or loss of rights already acquired—may depend on the happening of a condition (Art. 1181). This is where the classic distinction enters:

Suspensive condition (condition precedent)
Resolutory condition (condition subsequent)

2) Suspensive vs. resolutory conditions: the core distinction

A. Suspensive condition (Condition Precedent)

A suspensive condition is one where the obligation (or the relevant effect of the contract) does not become demandable/effective until the condition happens.

Key effect: No enforceable right to demand performance yet; only a hope or expectancy exists while the condition is pending.

Example:

“Seller shall transfer title to Buyer if and when Buyer obtains bank financing.”

If financing never comes, the obligation to transfer title never becomes effective.

B. Resolutory condition (Condition Subsequent)

A resolutory condition is one where the obligation is effective immediately, but it will be extinguished if the condition happens.

Key effect: rights are already vested, but they are defeasible—they may be undone upon the occurrence of the condition, often with restitution.

Example:

“This lease takes effect today, but it shall terminate if the building is sold to a third party.”

The lease is enforceable now; it ends if the sale occurs (subject to other laws and the contract’s terms).

3) “Pending the condition”: what exists before the condition happens?

A. Pending a suspensive condition

While the suspensive condition is pending:

The obligation is not demandable. There is generally no delay (mora) because there is nothing yet due in the actionable sense.
The creditor may protect an expectancy. The creditor may “bring appropriate actions for the preservation of his right” (Art. 1188). Think: annotation, injunction, notices, or other protective remedies depending on the context.
If the debtor pays by mistake, recovery is allowed. If the debtor pays while the suspensive condition is still unfulfilled, the debtor may recover what was paid by mistake (Art. 1188).
Risk rules exist for obligations to give a determinate thing. If the obligation is to deliver a specific/determinate thing subject to a suspensive condition, the Civil Code provides special rules for loss, deterioration, and improvements during the pendency (Art. 1189), discussed in detail below.

Intuition: before fulfillment, the creditor’s right is like a “seed” that has not yet sprouted into an enforceable claim.

B. Pending a resolutory condition

While a resolutory condition is pending:

The obligation is demandable and enforceable now. Performance is due under the contract as it stands.
Delay and breach are possible immediately. Because the obligation is currently effective, a party may incur mora, and remedies for breach may apply (subject to the contract and law).
But the relationship is unstable: it can be undone. If the resolutory condition happens, the law generally requires mutual restitution—each returns what was received (Art. 1190).

Intuition: the rights are “real” now but can be “divested” later.

4) Fulfillment and non-fulfillment: what happens when the condition occurs (or doesn’t)?

A. Suspensive condition

(1) If the condition is fulfilled

When the suspensive condition is fulfilled:

The obligation becomes effective/demandable.
In obligations to give, the effects of the obligation “shall retroact” to the day the obligation was constituted (Art. 1187; see also the related retroactivity principle in conditional obligations to give).
In obligations to do or not to do, retroactivity is not automatic; courts determine the retroactive effect (Art. 1187, 2nd paragraph).

Fruits and interests during pendency (important nuance): For reciprocal obligations, fruits and interests during the pendency are generally treated as mutually compensated (Art. 1187). For unilateral obligations, the Civil Code approach differs (the Code’s text sets the framework; the application depends on whether the obligation is reciprocal or unilateral and on the nature of what is delivered).

(2) If the condition is not fulfilled

If it becomes certain that the suspensive condition will not happen, the obligation is generally ineffective (it never becomes demandable). The Civil Code’s rules on conditions tied to a determinate time are particularly relevant:

If the condition is that an event must happen by a determinate time: the obligation is extinguished when the time expires without the event happening, or when it becomes indubitable that it will not happen (Art. 1184).
If the condition is that an event must not happen by a determinate time: the obligation becomes effective when the time expires, or when it becomes evident that the event cannot occur (Art. 1185).

(3) Constructive (deemed) fulfillment

A condition is deemed fulfilled if the obligor voluntarily prevents its fulfillment (Art. 1186). This is a good-faith control: a party cannot sabotage the condition and then benefit from the sabotage.

B. Resolutory condition

(1) If the condition is fulfilled

When a resolutory condition occurs:

The obligation is extinguished.
In obligations to give, the parties must return to each other what they have received (mutual restitution) (Art. 1190).
If the thing to be returned was lost/deteriorated/improved, the rules of Art. 1189 apply (Art. 1190).

For obligations to do or not to do, courts determine the retroactive effects (by reference to the Art. 1187 approach, as incorporated in Art. 1190).

(2) If the condition does not occur

If the resolutory condition does not occur (or becomes impossible), the obligation remains absolute in practice—because the “undoing” event never happens.

5) Loss, deterioration, improvements: the Civil Code mechanics (Arts. 1189 and 1190)

These provisions matter most when the obligation involves a determinate thing (a specific car with a specific plate number; a particular parcel of land; a particular artwork).

A. If the obligation to give is subject to a suspensive condition (Art. 1189)

During the pendency of the condition:

Loss without debtor’s fault → obligation is extinguished.
Loss through debtor’s fault → debtor pays damages.
Deterioration without debtor’s fault → impairment is borne by the creditor.
Deterioration through debtor’s fault → creditor may choose between:
- rescission, or
- fulfillment, in either case with damages.
Improvements by nature or time → benefit the creditor.
Improvements at debtor’s expense → debtor has rights of a usufructuary.

These rules allocate risk and fairness during the “in-between” phase.

B. If the obligation is extinguished by a resolutory condition (Art. 1190)

Upon fulfillment of the resolutory condition:

Parties return what they received.
For loss/deterioration/improvement, apply the same Art. 1189 framework, adapted to the restitution context (Art. 1190).

6) Potestative, casual, mixed; positive, negative; lawful and unlawful: classifications that change outcomes

The suspensive/resolutory distinction is the headline, but several “sub-rules” in the Civil Code can decide whether a condition is valid, void, or deemed not imposed.

A. Potestative conditions (Art. 1182) and the “illusory obligation” problem

A condition may be:

Casual (depends on chance/third persons),
Potestative (depends on the will of one party),
Mixed (depends on both will and chance/third persons).

Article 1182 rule: If the condition is suspensive and depends upon the sole will of the debtor, the conditional obligation is void. If the condition is resolutory, the obligation is generally valid.

Reason: a suspensive condition solely in the debtor’s hands makes the obligation illusory (“I will pay you if I want to”).

This interacts with the broader contract principle of mutuality: a contract’s fulfillment cannot be left to the sole will of one party (Civil Code, Art. 1308).

Drafting implication: a “subject to my sole discretion” clause, if suspensive and debtor-controlled, is high-risk.

B. Impossible, unlawful, or immoral conditions (Art. 1183)

Impossible conditions and those contrary to law, morals, good customs, public order, or public policy affect validity:

If an obligation depends on an impossible or unlawful condition, the obligation is generally annulled (Art. 1183), subject to divisibility rules.
A condition “not to do an impossible thing” is treated as not agreed upon (Art. 1183).

In practice, the effect can differ depending on whether the condition is truly suspensive or resolutory, and whether the obligation is divisible.

C. Positive vs negative conditions with time (Arts. 1184–1185)

Positive condition: an event must happen by a certain time.
Negative condition: an event must not happen by a certain time.

The Code supplies default rules on when the obligation is extinguished or becomes effective, and when it is considered evident that the condition can no longer occur.

7) Conditions vs. periods (terms): a frequent source of confusion

A period/term is an event certain to happen, although the date may be unknown. A condition is uncertain.

“Payable on December 31, 2026” → term (certain date).
“Payable when the debtor’s means permit” → treated as a term (Art. 1180), with court power to fix the period (Art. 1197).
“Payable if the debtor wins the lottery” → condition (may never happen).

Practical importance: With a term, the obligation exists and is enforceable subject to the arrival of the due date; with a suspensive condition, the enforceable obligation may not exist in a demandable form until the condition occurs.

8) Conditions in contracts: effectivity, perfection, and performance

Philippine civil law treats contracts as a source of obligations. Conditions therefore often appear as clauses affecting:

The effectivity of obligations arising from a perfected contract (most common), or
The parties’ intention as to whether the agreement is already binding or merely preparatory.

A. Perfection of contract vs. effectivity of obligation

As a rule, contracts are perfected by consent (meeting of minds on the object and cause). Parties may still agree that performance or certain effects are conditional.

A clause might be:

A condition to demandability/performance (“Obligation to deliver arises only upon issuance of permit.”)
A condition to the parties being bound at all (sometimes) (“This document is non-binding until board approval.”)

Interpretation matters: Philippine practice distinguishes between a binding contract with a suspensive condition affecting performance, versus a document that is merely an agreement to agree.

9) The Philippine “contract of sale vs. contract to sell” doctrine: where suspensive vs resolutory becomes decisive

In Philippine jurisprudence—especially in real estate transactions—the difference between suspensive and resolutory conditions is central to distinguishing a contract of sale from a contract to sell.

A. Contract of sale (often tied to a resolutory framework)

In a contract of sale, the seller is generally obliged to transfer ownership (subject to delivery rules and what the parties stipulate), and the buyer is obliged to pay.

If the buyer fails to pay, that is typically breach.
The seller’s remedy is generally resolution/rescission under Art. 1191 (or specific performance), plus damages as appropriate.
Non-payment is often treated as triggering a resolutory mechanism (whether express or implied), but the logic is: an existing obligation is undone due to breach.

B. Contract to sell (classically tied to a suspensive condition)

In a contract to sell, the seller reserves the obligation to convey title until the buyer fulfills a condition—commonly full payment.

Full payment is treated as a suspensive condition to the seller’s obligation to transfer ownership/title.
If the buyer does not complete payment, it is often analyzed not as breach of an existing obligation to convey title, but as non-fulfillment of the suspensive condition for that conveyance obligation.
The seller may not need the same rescission framework to “undo” a sale because, conceptually, the obligation to convey title never became demandable.

C. Why it matters in remedies

Suspensive (contract to sell): failure of condition → seller’s duty to convey does not arise; the fight often shifts to refunds, forfeitures, and statutory protections (notably for residential installment sales).
Resolutory (sale/rescission): breach of an existing obligation → Art. 1191 resolution, restitution, damages, and procedural requirements.

D. Statutory overlay: installment sales of real property (Maceda Law)

For many residential real estate installment arrangements, R.A. 6552 (Maceda Law) provides buyer protections (e.g., grace periods and refund rules depending on years paid). This statute frequently intersects with contract-to-sell structures and affects how cancellation/forfeiture clauses operate in practice.

10) Express resolutory conditions vs. rescission under Article 1191

A. Conventional (express) resolutory condition

Parties may stipulate that the contract will be extinguished upon a stated event (e.g., “upon failure to maintain permits, the contract automatically terminates”). When triggered, mutual restitution principles apply (Art. 1190), subject to the contract, law, and equity.

B. Legal (implied) resolutory condition in reciprocal obligations (Art. 1191)

Article 1191 treats reciprocal obligations as carrying an implied power to rescind/resolve when one party fails to comply.

Important operational differences:

Article 1191 is anchored on breach and remedies (fulfillment vs rescission, plus damages).
Many situations require judicial action or at least compliance with contractual/statutory procedures before a unilateral cancellation becomes effective (depending on the contract and the governing statute).

11) A practical comparison (with the legally significant consequences)

Suspensive condition

Effect now: obligation/effect is in suspense
Demandability: not demandable until condition happens
Right of creditor: mere expectancy (protectable)
Breach/default before condition: generally none (as to the suspended prestation)
If condition happens: obligation becomes effective; retroactivity rules may apply (Art. 1187)
If condition fails: obligation never becomes demandable / is ineffective
Classic use: contract to sell; performance contingent on approvals, permits, financing

Resolutory condition

Effect now: obligation/effect is effective immediately
Demandability: demandable at once
Right of creditor: vested but defeasible
Breach/default before condition: possible immediately
If condition happens: obligation extinguished; mutual restitution (Art. 1190)
If condition does not happen: obligation remains absolute
Classic use: termination events; reversion clauses; rescission logic in reciprocal contracts

12) Drafting and interpretation issues in Philippine practice

A. Use clear “trigger” language

Suspensive: “This shall take effect only upon…”, “subject to the condition that…”, “provided that the obligation to deliver arises only if…”
Resolutory: “shall terminate upon…”, “automatically cancelled if…”, “shall be extinguished when…”

Avoid mixing “effective immediately” phrasing with “only upon” phrasing in the same clause unless the intention is carefully separated (e.g., obligations effective now, but a particular prestation is suspended).

B. Allocate consequences expressly

For either type, spell out:

what happens to payments made,
who keeps fruits/earnings,
who bears risk of loss (consistent with mandatory law),
what notice is required,
whether termination is automatic or requires a process,
how disputes about condition occurrence are resolved (certification, documentary proof, third-party verification).

C. Avoid prohibited/illusory structures

Suspensive conditions dependent on the sole will of the debtor invite nullity concerns (Art. 1182).
Conditions that are impossible or unlawful risk invalidating the obligation or being disregarded, depending on structure (Art. 1183).

D. Consider third-party effects

Because conditional arrangements can create competing claims, parties often use:

annotations on titles (for real property),
escrow arrangements,
registration where applicable,
covenants restricting alienation pending conditions.

13) Illustrative scenarios (Philippine transaction patterns)

Bank loan approval clause
- “Sale is effective only if buyer obtains a housing loan by May 30.” → typically suspensive (no loan, no obligation to convey as defined).
Contract to sell condominium unit
- “Developer will execute deed of absolute sale upon full payment.” → seller’s duty to convey title is often treated as suspensive.
Lease termination upon sale
- “Lease begins now, but terminates if premises are sold.” → resolutory (effective now, extinguished later if event occurs).
Service contract terminable upon failure of accreditation
- “Agreement is effective now; it terminates if accreditation is revoked.” → resolutory.

14) Bottom line

A suspensive condition delays the birth (or enforceability) of a specific obligation or contractual effect until an uncertain event occurs; until then, the beneficiary holds only an expectancy, though protectable. A resolutory condition allows the obligation or effect to operate immediately, but subjects it to being undone if a stated uncertain event occurs—typically with restitution under the Civil Code’s framework.

In Philippine practice, the distinction is not academic: it shapes when obligations become demandable, whether non-occurrence is breach or mere failure of condition, what remedies apply under Arts. 1187–1191, and how transactions—especially real estate installment arrangements—are structured and enforced.