Law on Obligations and Contracts

Pure Obligations, Conditional Obligations

 Pure Obligation

What is a “pure obligation”?

A pure obligation is an obligation the effectivity or

extinguishment of which does not depend on the fulfillment of a
condition or on the arrival or expiration of a term or period.

A pure obligation is immediately demandable.

 Pure Obligation

What is a “pure obligation”? (continued)

“Every obligation whose performance does not depend upon a

future or uncertain event, or upon a past event unknown to the
parties, is demandable at once.”

- Article 1179, Civil Code

 Conditional Obligation

What is a “conditional obligation”?

A conditional obligation is an obligation the effectivity or

extinguishment of which depends on the fulfillment of a
condition.
 Conditional Obligation

What is a “conditional obligation”? (continued)

“In conditional obligations, the acquisition of rights, as well as

the extinguishment or loss of those already acquired, shall
depend upon the happening of the event which constitutes the
condition.”

- Article 1181, Civil Code

 Conditional Obligation

What is a “condition”?

A condition is a future and uncertain event or a past and unknown

event on the happening of which the effectivity or
extinguishment of an obligation depends.
 Conditional Obligation

What are the kinds of conditions?

a. suspensive condition

b. resolutory condition
 Conditional Obligation

What is a “suspensive condition”?

A suspensive condition is a condition the fulfillment of which

will give rise to an obligation.

It may also be called “condition precedent” or “condition

antecedent”.
 Conditional Obligation

Example of a suspensive condition:

F and G entered into a contract where F promised that if G would

ever be injured in an accident and be hospitalized, F would
compensate G’s hospitalization expenses.
 Conditional Obligation

Example of a suspensive condition, continued:

In this case, the obligation of F is subject to a suspensive

condition.
 Conditional Obligation

What is a “resolutory condition”?

A resolutory condition is a condition the fulfillment of which will

extinguish an obligation that already exists.

It may also be called “condition subsequent”.

 Conditional Obligation

What is a “resolutory condition”? (continued)

“Every obligation which contains a resolutory condition shall

also be demandable, without prejudice to the effects of the
happening of the event.”

- Article 1179, Civil Code

 Conditional Obligation

Example of a resolutory condition:

J sold a cellphone to K for PhP15,000.00. J promised that he will

repair the phone free of charge if manufacturing defects in the
phone would be discovered later.
 Conditional Obligation

Example of a resolutory condition, continued:

However, they agreed that the obligation of J to repair the phone

for free would be extinguished if the phone would be damaged by
liquids or impacts.
 Conditional Obligation

Example of a resolutory condition, continued:

In this case, the obligation of J to repair the phone of K free of

charge is subject to a resolutory condition.
 Conditional Obligation

What are the kinds of conditions?

a. potestative

b. casual

c. mixed
 Conditional Obligation

What is a “potestative condition”?

A potestative condition is a condition the fulfillment of which

depends on the will of one of the parties to the obligation.
 Conditional Obligation

Example of a potestative condition:

J borrowed a laptop from K and promised to return it

immediately when K demands its return.

In this case, the happening of the condition depends on the will of

K, the creditor.
 Conditional Obligation

What is the effect of a potestative condition?

The effect of a potestative condition depends on whether the

condition is suspensive or resolutory and whether its fulfillment
depends on the will of the debtor or the creditor.
 Conditional Obligation

What is the effect if the fulfillment of the suspensive condition

depends solely on the will of the debtor?

“When the fulfillment of the condition depends upon the sole will
of the debtor, the conditional obligation shall be void.”

- Article 1182, Civil Code

 Conditional Obligation

Example of suspensive condition that depends solely on the will

of the debtor:

L promised to give M PhP100,000.00 if L starts a new business.

The fulfillment of the suspensive condition in this scenario
depends on the will of L alone.

In this case, the entire obligation of L is void.

 Conditional Obligation

What is the effect if the fulfillment of the suspensive condition

depends solely on the will of the debtor? (continued)

However, if there is a pre-existing obligation which does not

depend on the debtor’s fulfillment of the potestative condition,
the condition is void while the obligation remains valid.
 Conditional Obligation

Example of pre-existing obligation:

N borrowed PhP5,000.00 from P and promised to pay it back on

December 1, 2015.

When the due date arrived and P demanded payment, N promised

to pay after he has sold his car to raise the money. P agreed.
 Conditional Obligation

Example of pre-existing obligation, continued:

In this case, the fulfillment of the condition depends on the will

of N, the debtor.

The condition is void but the obligation of N to pay remains valid

because it already existed before N and P agreed on the
condition.
 Conditional Obligation

What is the effect if the fulfillment of the suspensive condition

depends solely on the will of the creditor?

If the fulfillment of the condition depends solely on the will of

the creditor, the obligation remains valid.
 Conditional Obligation

Example:

Q promised to pay PhP20,000.00 to S if S would deliver to him a

handcrafted cabinet.

In this case the fulfillment of the condition depends solely on the

will of the creditor. The obligation remains valid.
 Conditional Obligation

What is the effect if the fulfillment of the resolutory condition

depends on the will of the debtor?

The obligation remains valid. Since the condition is resolutory,

there is already an immediately demandable obligation.
Fulfillment of the condition only extinguishes of the rights of the
creditor.
 Conditional Obligation

Example:

T sold a photocopier to V. T promised that if the photocopier

would ever malfunction, he would lend V with another copier
until he has repaired and returned the malfunctioning
photocopier.
 Conditional Obligation

Example, continued:

In this case, the obligation of T to lend a replacement copier to V

is subject to a resolutory condition.

The happening of the condition depends on the will of T, the

debtor.

The obligation remains valid.

 Conditional Obligation

What is a “casual condition”?

A casual condition is a condition the fulfillment of which

depends on chance or on the will of a third person.
 Conditional Obligation

What is the effect if the fulfillment of the condition depends on

chance or on the will of a third person?

“If it depends upon chance or upon the will of a third person, the
obligation shall take effect in conformity with the provisions of
this Code.”

- Article 1182, Civil Code

 Conditional Obligation

Example of a condition that depends on chance:

T promised to pay PhP1,000,000.00 to V if V’s house would be

completely destroyed by an earthquake.

In this case, the fulfillment of the condition depends on chance.

 Conditional Obligation

Example of a condition that depends on the will of a third person:

W promised to serve as the legal counsel of X if Z would sue X.

In this case, the fulfillment of the condition depends on the will

of a third person.
 Conditional Obligation

What is a “mixed condition”?

A mixed condition is a condition the fulfillment of which

depends partly on chance and partly on the will of a third person.
 Conditional Obligation

What is the effect if the fulfillment of the condition depends

partly on chance and partly on the will of a third person?

If the fulfillment of the condition depends partly on chance and

partly on the will of a third person, the obligation remains valid.
 Conditional Obligation

Example of a condition that depends partly on chance and partly

on the will of a third person:

F sold a medical device to G for use in patients. F promised to

pay PhP100,000.00 to G if the device malfunctions and injures a
patient and said patient sues G.
 Conditional Obligation

Example of a condition that depends partly on chance and partly

on the will of a third person, continued:

In this case, the fulfillment of the condition depends partly on

chance and partly on the will of a third person.
 Conditional Obligation

What is the effect if there is a condition but its fulfillment is

impossible?

“Impossible conditions, those contrary to good customs or public

policy and those prohibited by law shall annul the obligation
which depends upon them.
 Conditional Obligation

What is the effect if there is a condition but its fulfillment is

impossible? (continued)

If the obligation is divisible, that part thereof which is not

affected by the impossible or unlawful condition shall be valid.”

- Article 1183, Civil Code

 Conditional Obligation

Example of a physically impossible condition:

J promised to pay K PhP5,000.00 if K can drive a package from

Mandaluyong to Tarlac in five minutes.

In this case, the condition is physically impossible to fulfill.

 Conditional Obligation

Example of a legally impossible condition:

L promised to pay M PhP100,000.00 if M will burn down the

house of Q.

In this case, fulfillment of the condition is prohibited by law.

 Conditional Obligation

What is the effect if the condition is not to do an impossible

thing?

“The condition not to do an impossible thing shall be considered

as not having been agreed upon.”

- Article 1183, Civil Code

 Conditional Obligation

What is the effect if the suspensive condition is that some event

happen at a determinate time?

“The condition that some event happen at a determinate time

shall extinguish the obligation as soon as the time expires or if it
has become indubitable that the event will not take place.”

- Article 1184, Civil Code

 Conditional Obligation

Example No. 1:

N sold a car to P for PhP1,000,000.00. N promised that he would

repair the car free of charge if it would have any engine trouble
because of defects within a year from its purchase.
 Conditional Obligation

Example No. 1, continued:

One year has passed, but the car still has not had any engine
trouble.

In this case, the obligation of N shall be extinguished because the

time has expired and the event has not happened.
 Conditional Obligation

Example No. 2:

N sold a car to P for PhP1,000,000.00. N promised that he would

repair the car free of charge if it would have any engine trouble
because of defects within a year from its purchase.
 Conditional Obligation

Example No. 2, continued:

However, one week after the sale, P drunkenly drove the car off a
cliff. P survived the incident, but the car exploded into a hundred
pieces.
 Conditional Obligation

Example No. 2, continued:

In this case, the obligation of N shall be extinguished because it

has become clear that the event will not happen.
 Conditional Obligation

What is the effect if the suspensive condition is that some event

will not happen at a determinate time?

“The condition that some event will not happen at a determinate

time shall render the obligation effective from the moment the
time indicated has elapsed,
 Conditional Obligation

What is the effect if the suspensive condition is that some event

will not happen at a determinate time? (continued)

or if it has become evident that the event cannot occur.”

- Article 1185, Civil Code

 Conditional Obligation

Example No. 1:

Q rented an apartment from T and gave a security deposit of

PhP20,000.00. T promised to return the deposit of Q if Q would
not cause any damage to the fixtures of the apartment for a period
of one year.
 Conditional Obligation

Example No. 1, continued:

One year has passed and Q has not caused any damage to the
apartment’s fixtures.

In this case, the obligation of T to return the deposit shall become

effective because the time they stipulated has elapsed.
 Conditional Obligation

Example No. 2:

Q rented an apartment from T and gave a security deposit of

PhP20,000.00. T promised to return the deposit of Q if Q would
not cause any damage to the fixtures of the apartment within one
year.
 Conditional Obligation

Example No. 2, continued:

However, one week after Q moved into the apartment, the

building was burned down and completely destroyed by V, the
mortal enemy of T.
 Conditional Obligation

Example No. 2, continued:

In this case, the obligation of T to return the deposit to Q shall

become effective because it has become obvious that the event
cannot occur.
 Conditional Obligation

What is the effect if the debtor voluntarily prevents the

fulfillment of the suspensive condition?

“The condition shall be deemed fulfilled when the obligor

voluntarily prevents its fulfillment.”

- Article 1186, Civil Code

 Conditional Obligation

Example:

W needed to sell his parcel of land for PhP1,000,000.00 but did

not know anybody who was interested in it. So, W asked for the
help of X.
 Conditional Obligation

Example, continued:

They agreed that W would pay X PhP50,000.00 if the latter can

find someone who will buy the lot, get the buyer to sign a
contract of sale, and collect the selling price from said buyer.
 Conditional Obligation

Example, continued:

One month later, X reported to W that Z was ready to buy the lot.

At this point, W decided to secretly get Z to sign a contract of

sale and collect the selling price himself, so that he would not
have to pay X PhP50,000.00.
 Conditional Obligation

Example, continued:

In this case, the suspensive condition shall be deemed fulfilled

because W, the debtor with respect to the obligation to pay
PhP50,000.00, voluntarily prevented its fulfillment.
 Conditional Obligation

What is the effect if the determinate thing due is lost, deteriorates,

or is improved before the suspensive condition is fulfilled?

According to Article 1189 of the Civil Code, the following rules

shall apply:
 Conditional Obligation

What is the effect if the determinate thing due is lost before the
suspensive condition is fulfilled?

If the thing is lost without fault on the part of the debtor, the
obligation shall be extinguished.
 Conditional Obligation

What is the effect if the determinate thing due is lost before the
suspensive condition is fulfilled? (continued)

If the thing is lost because of the fault of the debtor, he shall be

obliged to pay damages.
 Conditional Obligation

What is the effect if the determinate thing due is lost before the
suspensive condition is fulfilled? (continued)

According to Article 1189, the thing due is considered lost when

it perishes, or goes out of commerce, or disappears in such a way
that its existence is unknown or it cannot be recovered.
 Conditional Obligation

What is the effect if the determinate thing due deteriorates before

the suspensive condition is fulfilled?

If the thing deteriorates without fault on the part of the debtor, the
impairment shall be borne by the creditor.
 Conditional Obligation

What is the effect if the determinate thing due deteriorates before

the suspensive condition is fulfilled? (continued)

If the thing deteriorates because of the fault of the debtor, the

creditor may choose between the rescission of the obligation and
its fulfillment, with a right to demand payment of damages in
either case.
 Conditional Obligation

What is the effect if the determinate thing due is improved before

the suspensive condition is fulfilled?

If the thing is improved by its nature, or by time, the

improvement shall inure to the benefit of the creditor.
 Conditional Obligation

What is the effect if the determinate thing due is improved before

the suspensive condition is fulfilled? (continued)

If the thing is improved at the expense of the debtor, he shall

have no other right than that granted to the usufructuary.
 Conditional Obligation

What is the effect if the determinate thing due is improved before

the suspensive condition is fulfilled? (continued)

“The usufructuary may make on the property held in usufruct

such useful improvements or expenses for mere pleasure as he
may deem proper, provided he does not alter its form or
substance;
 Conditional Obligation

What is the effect if the determinate thing due is improved before

the suspensive condition is fulfilled? (continued)

but he shall have no right to be indemnified therefor.

 Conditional Obligation

What is the effect if the determinate thing due is improved before

the suspensive condition is fulfilled? (continued)

He may, however, remove such improvements, should it be

possible to do so without damage to the property.”

- Article 579, Civil Code

 Conditional Obligation

What is the effect if the determinate thing due is improved before

the suspensive condition is fulfilled? (continued)

“The usufructuary may set off the improvements he may have

made on the property against any damage to the same.”

- Article 580, Civil Code

 References

De Leon, H. S. & De Leon, H. M. (2014). The Law on

Obligations and Contracts, 2011 ed. Manila: Rex Book Store.

Jurado, Desiderio P. (2010). Comments & Jurisprudence on

Obligations and Contracts. Manila: Rex Book Store.
 Assignment

Read the following provisions of law:

Civil Code
Articles 1180, 1193, 1194, 1195, 1196, 1197, 1198, 1199, 1200,
1201, 1202, 1203, 1204, 1205, 1206