Whether it Contains a Condition

Question 1

Conditions may be either

Answer 1

(1) Expressed in a stipulation or
(2) implied by the law, the nature of the contract, or the intent of the parties.

Question 2

Expressed -

Answer 2

Parties specifically say a condition applies.

Question 3

3 ways conditions are implied…

Answer 3

Implied by the law - when a buyer reserves view or trial of the thing bought, sale is not complete until buyer gives seller approval.

Implied by the nature of the contract - Example: sale of a future thing.

Implied by the intent of the parties -
Example: Offer to buy with cash and loan money through NOLA homestead on regular terms ➨ implied obligation to apply for loan.

Question 4

Types of Conditional Obligations

Answer 4

Suspensive Conditions
&
Resolutory Conditions

Question 5

Suspensive Conditions

Answer 5

If the obligation may not be enforced until the uncertain event occurs, the condition is suspensive.

Basically the parties are agreeing that the obligation is not due at all until the event occurs.
A suspensive condition suspends the effect of the obligation.

Question 6

What kind of condition is it if the obligee CANNOT demand performance unless and until the event happens?

Answer 6

Suspensive.

Question 7

If the obligor performs prior to the fulfillment of the condition, because performance was not due, he/she can recover under the theory of ___________________.

Answer 7

payment of a thing not owed

Question 8

For an obligation with a suspensive condition, when does prescription run against the obligee’s right to enforce?

Answer 8

Prescription does NOT run against the obligee’s right to enforce until condition happens.

Question 9

Who has the risk of loss with suspensive conditions?

Answer 9

The owner of the thing.

The obligee can protect his/her rights.

Question 10

If a suspensive condition is unlawful or impossible…

Answer 10

the whole obligation is null.

Question 11

An exception to the nullity rule:
If a suspensive condition that is illegal, immoral, or impossible is attached to a gratuitous obligation (donation)…

Answer 11

the condition will be read out and the donation will stand.

Question 12

A suspensive condition that depends solely on the whim of the obligor…

Answer 12

makes the obligation null.

Question 13

A suspensive condition that depends solely on the whim of the obligee…

Answer 13

is valid.

Question 14

If the obligation may be immediately enforced but will come to an end when the uncertain event occurs…

Answer 14

the condition is resolutory.

Question 15

With a resolutory condition, the obligation is immediately enforceable but ends…

Answer 15

on the happening of the uncertain event.

Question 16

If a resolutory condition is unlawful or impossible…

Answer 16

the condition is just “read out” and the obligation stands.

Question 17

If a resolutory condition depends solely on the will of the obligor…

Answer 17

…it must be fulfilled in good faith.

Question 18

A condition is considered to have been fulfilled if it is NOT fulfilled because of…

Answer 18

the fault (negligent/intentional) of a party with an interest in having it NOT fulfilled.

Question 19

In a situation where a condition is deemed fulfilled because it was not fulfilled due to a party’s fault, the obligation becomes enforceable, BUT…

Answer 19

the party NOT at fault may only get damages rather than specific performance if specific performance has become impossible because of the nonfulfillment of the condition.

Question 20

If the condition is supposed to happen within a certain time and it doesn’t…

Answer 20

the condition is considered to have failed.

Question 21

If no time is specified for the fulfillment of a condition…

Answer 21

the condition must be fulfilled within a reasonable time or else it fails.

Question 22

If the condition is that an event shall NOT occur within a fixed time…

Answer 22

it is fulfilled when the time passes without the event occurring and obligation is enforceable.

Question 23

If the condition is that an event shall NOT occur…

Answer 23

once it is certain the event will not occur, it is fulfilled.

Question 24

If the condition is that an event shall occur within a fixed time and that time elapses without the occurrence of the event…

Answer 24

the condition is considered to have failed.

Question 25

If no time has been fixed for the occurrence of the event…

Answer 25

the condition may be fulfilled within a reasonable time.

Whether or not a time has been fixed, the condition is considered to have failed once it is certain that the event will not occur.

Question 26

If the condition is that an event shall not occur within a fixed time…

Answer 26

it is considered as fulfilled once that time has elapsed without the event having occurred.

Question 27

Fulfillment of a condition has effects that are retroactive to the inception of the obligation. Nevertheless…

Answer 27

that fulfillment does not impair the validity of acts of administration duly performed by a party, nor affect the ownership of fruits produced while the condition was pending. Likewise, fulfillment of the condition does not impair the right acquired by third persons while the condition was pending.

Question 28

General Rule: Once a condition is fulfilled, the effects of the obligation are…

Answer 28

retroactive.

Question 29

For a suspensive condition: Once the uncertain event happens…

Answer 29

it’s as if the obligation that was conditioned on the event happening existed from the moment the agreement was made.

Question 30

For a resolutory condition: Once the event happens…

Answer 30

it’s as if the obligation never existed at all. The obligor must return the thing and obligee must return any price.

Question 31

3 Exceptions to the General Rule of Retroactivity:

Answer 31

Does not impair acts of administration performed or affect ownership of fruits produced while the condition was pending.

Does not affect rights of 3Ps acquired in good faith while the condition was pending (subject to public records doctrine for immovables).

In a contract for continuous or periodic performance, fulfillment of a resolutory condition does not affect performance rendered before fulfillment.