Whether it Contains a Term Flashcards
Difference between obligations based on a condition and obligations based on a term:
Obligation subject to a condition (namely suspensive) you don’t have an obligation unless and until that certain event occurs.
With a term, you have an obligation from the day you make your agreement. The term just dictates when you have to perform.
If something is subject to a term…
It is happening. It is certain. Terms are not an “if/when.” The only question is when.
The period of time may be certain or uncertain, yet determinable. BUT
time passing is an absolute certainty.
The term…
Dictates WHEN to perform; and
Is a period of time attached to an obligation, where the arrival or expiration of the time dictates the beginning or ending of the performance of the obligation.
Creation of a term:
Conventional
Legal
Judicial
Conventional terms are created by…
contract.
Conventional terms can be:
express or implied by the nature of the contract.
A legal term is…
granted or imposed by law.
A judicial term is…
granted by a court.
Based on Whether It Triggers or Terminates Performance of the Obligation:
Suspensive v. Extinctive Terms.
Suspensive Term -
A suspensive term is a period of time that delays the right to demand performance of an obligation, although the obligation has been created and is in existence.
Suspensive Term General Rule:
Performance is not due until the arrival of the term.
Three EXCEPTIONS to the general rule that performance is not due until the arrival of the term:
If the obligor performs voluntarily (no error, fraud, or duress) before the term arrives, she cannot recover her performance (because she basically waived the benefit of the term).
If the obligation requires the solvency of the obligor, the term will be disregarded and the obligation will be immediately due if the obligor is judicially found to be insolvent.
If the obligor has promised to furnish security and does not do so or if the security furnished becomes insufficient, the obligee can require the obligor to perform immediately (or furnish sufficient security, in which case the term will still be effective). The choice belongs to the obligor. The obligee may take all lawful measures to preserve his right, including stopping goods in transit or getting an injunction.
For a suspensive term, the obligee cannot demand performance until the arrival of the term, so prescription…
does not run against his right to demand performance until the arrival of the term.
The arrival of the suspensive term automatically…
puts an obligor who fails to perform in default.
Extinctive term -
is a period of time that brings an end to the obligation or performance of it.
Extinguishes the obligation and ends the legal relationship between the parties.
Certain terms -
Based on Enumeration of Time Period/Date:
Specific date.
Number of days, weeks, months, etc.
Tied to a certain event.
Calculating Time:
If the term for performance is a period of time (like “30 days” as opposed to a specific date, like January 31, 2025), the term begins to run the day after the contract is made or the day after the occurrence of the event that marks the beginning of the term and it includes the last day of the period.
Uncertain Terms:
Where there is no fixed time specified BUT the term is determinable from the intent of parties.
Where there is no fixed time specified BUT the term is determinable by the occurrence of a future and certain event.
In all other cases where the time is undeterminable, performance must occur within a reasonable time (which can be set by the court).
General Rule: Benefitting from and Renunciation of a Term
There is a rebuttable presumption that a term is intended to benefit the obligor (the one performing).
Exception: Benefitting from and Renunciation of a Term
Unless the agreement or the circumstances show that the term was intended to benefit the obligee (the one receiving the performance) or both parties.
If a term benefits one party exclusively…
that party (and only that party) may renounce it.
