I. Why “conditions” matter in Philippine private law

Philippine civil law treats many obligations as pure (demandable at once) or conditional (their effect depends on an event). Conditions are not mere “fine print”—they determine:

When an obligation becomes enforceable (or ends),
Whether ownership or rights are acquired or must be returned,
Who bears the risk if the thing is lost while waiting, and
What remedies apply when the event happens (or is prevented in bad faith).

The core rules are in Civil Code Articles 1179 to 1192 (Obligations and Contracts).

II. The Civil Code concept of a “condition”

A. What a condition is

A condition is an event that is:

Future and uncertain, or
Past but unknown to the parties,

such that the acquisition or extinguishment of rights depends on it (see the Civil Code’s general rule on conditional obligations).

Examples:

Future and uncertain: “I will sell you the lot if your housing loan is approved.”
Past but unknown: “I will pay you if the shipment already arrived yesterday (unknown to both of us).”

B. Condition vs. period (term): the most common confusion

A period/term is a future event that is certain to happen, even if the exact date is unknown.

Condition: uncertain event → may or may not happen
Period: certain event → will happen (e.g., “on December 31,” “upon death,” “when the ship arrives” if arrival is certain)

This matters because conditional obligations behave differently (retroactivity, risk allocation, restitution, etc.).

III. The two headline types: suspensive vs. resolutory

A. Suspensive condition (condition precedent)

A suspensive condition is one where the obligation (or the parties’ right to demand performance) starts only if the condition happens.

Effect: rights are in suspense (“expectancy”) while the condition is pending.
If the condition happens: the obligation becomes effective/demandable.
If it fails: the obligation generally does not become effective.

Typical use: loan approval clauses, permits, certifications, board approvals, availability of titles, successful tests or inspections.

B. Resolutory condition (condition subsequent)

A resolutory condition is one where the obligation is effective at once, but ends if the condition happens.

Effect: parties can demand performance immediately, but what is acquired is subject to being undone.
If the condition happens: the obligation is extinguished, usually with restitution (returning what was received).

Typical use: “This donation is effective now, but if the donee sells the donated property within 5 years, the donation is revoked.” Also appears (expressly or impliedly) in reciprocal contracts where breach triggers resolution/rescission.

IV. Side-by-side comparison (quick reference)

Issue	Suspensive Condition	Resolutory Condition
When obligation is demandable	Not yet (pending condition)	At once
Nature of right while pending	Expectancy (inchoate)	Vested but defeasible
If condition happens	Obligation becomes effective (or demandable)	Obligation is extinguished
If condition fails	Obligation generally does not arise (or does not become effective)	Obligation continues (since the terminating event didn’t occur)
Retroactive effects	Generally retroactive to the moment the obligation was constituted (subject to rules on fruits/interests and the nature of obligation)	Typically restitution as though the obligation did not exist, subject to Civil Code rules
Risk of loss pending	Governed by Civil Code rules on loss/deterioration/improvement during pendency	Similar rules apply; restitution framework becomes central
Debtor’s control over condition	If fulfillment depends solely on debtor’s will (suspensive), obligation is void	Resolutory conditions are generally treated differently; validity issues usually arise from mutuality and fairness, not the same suspensive rule

V. Suspensive conditions in detail (Philippine Civil Code mechanics)

A. Demandability and delay (no default yet)

Because the obligation is not yet demandable, delay (mora) generally cannot begin while the suspensive condition is pending. You cannot normally sue to compel performance of the main prestation until the condition happens.

B. Protective acts while waiting (preservation)

Even while waiting, the law recognizes that a party may take steps to preserve rights, such as:

registering notices where relevant (e.g., real property situations),
seeking to prevent dissipation of the subject matter,
demanding that the other party refrain from acts that would defeat the condition.

C. Retroactivity once fulfilled (and its limits)

As a general civil-law principle, once a suspensive condition is fulfilled, the effects may “relate back” to the time the obligation was constituted. But the Civil Code draws important distinctions:

For obligations to give (especially determinate things), retroactivity is meaningful (ownership, risk, fruits).
For obligations to do or not to do, retroactivity is often limited by practical realities (you cannot “undo time” in the same way).

D. Fruits and interests

The Civil Code treats fruits and interests with nuance. In many situations:

Fruits/interests are not automatically owed during the pendency unless the law, contract, or the nature of the obligation indicates otherwise.
Parties can (and often should) allocate this explicitly in the contract.

E. Loss, deterioration, or improvement pending the condition (obligations to give)

For obligations to give a determinate thing subject to a suspensive condition, the Civil Code provides a structured set of consequences while the condition is pending:

If the thing is lost without the obligor’s fault → obligation is extinguished.
If lost through the obligor’s fault → obligor is liable for damages.
If deteriorated without fault → impairment is borne as the law provides (typically the creditor bears it once the obligation becomes effective, but the Code’s specific rule controls).
If deteriorated through fault → damages.
If improved by nature or time → benefit typically accrues as the law provides.
If improved at the obligor’s expense → the obligor’s rights resemble those of a usufructuary (the Civil Code uses this framework).

These rules are central in real estate and specific-property transactions where something happens while approvals are pending.

F. Conditions with a time limit

The Civil Code separately treats:

Positive conditions (an event must happen) within a determinate time: if time expires (or it becomes certain the event cannot happen), the condition fails and the obligation does not become effective.
Negative conditions (an event must not happen) within a determinate time: the obligation becomes effective when time expires (or when it becomes evident the event cannot happen).

This is common in “permit by X date” clauses.

G. Constructive fulfillment (prevention in bad faith)

A critical doctrine: if the party who would be burdened by the condition voluntarily prevents its fulfillment, the law may treat the condition as deemed fulfilled. This prevents strategic sabotage (e.g., seller blocks a required inspection to avoid being bound).

VI. Resolutory conditions in detail (what changes when the obligation is effective now)

A. Demandability is immediate

The hallmark is in the Civil Code’s formulation: obligations subject to a resolutory condition are generally demandable at once, but may later be extinguished.

So:

performance can be required immediately, and
rights acquired are real and enforceable—but defeasible.

B. What happens when the resolutory condition occurs: extinction + restitution

When the condition is fulfilled, the obligation ends—and the law commonly requires parties to be restored, as far as possible, to their prior positions through mutual restitution:

return of the thing delivered, and
return of the price or prestation received,
plus adjustments governed by Civil Code rules on loss/deterioration/improvement and, where applicable, fruits/interests.

This is why resolutory conditions are often described as “effective now, but subject to being undone.”

C. Risk allocation and changes to the thing

When the relationship is later unwound, the Civil Code’s framework on:

loss, deterioration, and improvement, and
fault vs. fortuitous events becomes decisive in determining who bears the consequences.

D. Potestative “I can end it whenever I want”: validity is not automatic

A frequent drafting pitfall is a “resolutory condition” that gives one party unilateral power to terminate at will.

Even if the Civil Code’s strict voiding rule targets suspensive conditions dependent solely on the debtor’s will, a unilateral “I can cancel anytime” clause can still be attacked under broader Civil Code principles, especially:

Mutuality of contracts (a contract’s validity and compliance cannot be left solely to one party’s will),
Good faith, and
Rules on abuse of rights.

So, while resolutory conditions can be valid, they should be framed around objective events or balanced termination mechanisms (notice, cause, clear triggers, restitution mechanics).

VII. The implied resolutory condition in reciprocal obligations (Civil Code Art. 1191 doctrine)

In Philippine civil law, reciprocal obligations (e.g., sale: deliver the thing ↔ pay the price) carry an implied resolutory condition: if one party does not comply, the other may seek resolution/rescission.

Key points (doctrinally important in practice):

The remedy under Article 1191 is often described as resolution (sometimes called “rescission” in the Code) based on breach.
It differs from rescission under Articles 1380 et seq. (the “rescissible contracts” regime), which is about economic prejudice/lesion and specific grounds—not simple breach.

Judicial vs. extrajudicial resolution

Philippine doctrine recognizes that:

Courts have the authority to declare resolution and award damages, and
Contracts sometimes include clauses allowing extrajudicial cancellation upon breach; however, enforcement is commonly treated as being subject to judicial review if contested (the party who cancels extrajudicially acts at its own risk if later found unjustified).

This is where resolutory-condition thinking becomes concrete: breach operates like the “event” that triggers the extinguishment and restitution framework.

VIII. Philippine statutory overlays that often “override the clause” in practice

Even a well-drafted conditional clause can run into protective statutes, especially in installment contexts:

A. Real estate installment buyers (Maceda Law, RA 6552)

In covered sales of real property on installment, cancellation/resolution and forfeiture are regulated (grace periods, refund requirements in many cases). A contract clause that treats nonpayment as an automatic resolutory event may be limited by statute.

B. Personal property on installment (Recto Law: Civil Code Arts. 1484–1486)

For sales of personal property on installment, the seller’s remedies are limited (e.g., the “two or more installments” rule and restrictions on deficiency actions after certain remedies). Clauses effectively operating as resolutory conditions must still respect the statutory remedial scheme.

These overlays matter because many “resolutory” clauses are functionally default/cancellation clauses.

IX. Drafting and litigation issues: how courts typically analyze “conditions”

A. Is it truly a condition, or a promise/undertaking?

Sometimes parties label something a “condition” when it is really:

a warranty,
a covenant, or
a mode (especially in donations).

Courts look at substance:

Does the event control whether the obligation begins/ends?
Or is it simply a breach-triggering promise?

B. Who benefits from the condition—and can it be waived?

Many conditions are inserted for the benefit of one party (e.g., “subject to loan approval” for the buyer). If a condition is clearly for one party’s benefit, waiver questions arise—waiver is generally possible if it does not prejudice the other party or violate law/public policy, but the contract’s structure and fairness matter.

C. Burden of proof

In disputes:

the party asserting that the condition occurred bears the burden of proving occurrence,
the party asserting that the condition failed or was prevented in bad faith must prove the facts supporting that claim.

D. Real property: third-party effects and registrability

In real estate transactions, conditional transfers can affect third parties and registration issues. If rights are intended to bind third parties, parties often must consider:

annotation/registration practices,
possession and good faith purchasers,
whether the condition creates a defeasible title or merely personal rights.

(These issues become fact-intensive quickly and depend on the instrument and registration status.)

X. Practical examples (Philippine-style fact patterns)

1) Suspensive condition: loan approval

“Seller sells Lot A to Buyer provided that Buyer’s bank loan is approved within 60 days.”

Pending: seller generally cannot compel payment of the full price as if unconditional; buyer generally cannot compel delivery as if unconditional.
If approval is granted within 60 days: obligation becomes effective; disputes often shift to performance timing.
If seller blocks required documents to frustrate approval: constructive fulfillment arguments may arise.

2) Resolutory condition: donation with a condition subsequent

“Donation is effective now, but if the donee disposes of the property within five years, the donation is revoked.”

Donee acquires rights now, but they are defeasible.
If the triggering disposal occurs, extinction + restitution/reversion rules apply (and practical enforcement depends on the instrument, registration, and good faith third parties).

3) Reciprocal contract: implied resolutory condition via breach

Seller delivers; buyer fails to pay despite demand.

Seller may pursue Article 1191 resolution (plus damages), subject to statutory overlays (e.g., installment protections where applicable).

XI. Key takeaways

Suspensive condition = obligation is not yet demandable; rights are in expectancy; fulfillment makes it effective, often with structured retroactive effects.
Resolutory condition = obligation is demandable at once; rights are vested but defeasible; fulfillment extinguishes the obligation and typically triggers restitution.
The Civil Code supplies detailed default rules on time-limited conditions, prevention in bad faith, and loss/deterioration/improvement pending the condition—especially important for obligations to give determinate things.
Many real-world “resolutory” clauses are actually breach-resolution mechanisms and must be read alongside Article 1191, mutuality principles, good faith, and protective statutes (notably in installment sales).
The labels in the contract matter less than the function of the clause and the Civil Code consequences that follow.

Principal Civil Code anchors (Philippines)

Arts. 1179–1192: Pure and conditional obligations; effects of conditions; loss/deterioration/improvement; resolutory conditions; reciprocal obligations and resolution.
Art. 1308 (mutuality principle) and related good-faith/abuse-of-rights doctrines often shape the validity and enforcement of heavily one-sided “termination at will” arrangements.