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ARTICLE 1179. EVERY OBLIGATION WHOSE 2. PAST BUT UNKNOWN - A condition may refer to a
PERFORMANCE DOES NOT DEPEND UPON A past event unknown to the parties. (infra.) If it refers to a
FUTURE OR UNCERTAIN EVENT, OR UPON A PAST future event, both its very occurrence and the time of
EVENT UNKNOWN TO THE PARTIES, IS such occurrence must be uncertain; otherwise, it is not a
DEMANDABLE ONCE. condition.
EVERY OBLIGATION WHICH CONTAIN A * Two principal kinds of condition
RESOLUTORY CONDITION SHALL ALSO BE
1. SUSPENSIVE CONDITION (condition precedent or
DEMANDABLE, WITHOUT PREJUDICE TO THE
condition antecedent) - or one the fulfillment of which will
EFFECTS OF THE HAPPENING OF THE EVENT.
give rise to an obligation (or right). In other words, the
PURE OBLIGATION - is one which is not subject to any demandability of the obligation is suspended until the
condition and no specific date is mentioned for its happening of a future and uncertain event which
fulfillment and is, therefore, immediately demandable. constitutes the condition.
CONDITIONAL OBLIGATION - is one whose 2. RESOLUTORY CONDITION (condition subsequent) -
consequences are subject in one way or another to the or one the fulfillment of which will extinguish an obligation
fulfillment of a condition. (or right) already existing.
CONDITION - is a future and uncertain event, upon the ARTICLE 1180. WHEN THE DEBTOR BINDS HIMSELF
happening of which, the effectivity or extinguishment of TO PAY WHEN HIS MEANS PERMIT HIM TO DO SO,
an obligation (or rights) subject to it depends. THE OBLIGATION SHALL BE DEEMED TO BE ONE
WITH A PERIOD, SUBJECT TO THE PROVISIONS OF
* Characteristics of a condition
ARTICLE 1197.
1. FUTURE AND UNCERTAIN - In order to constitute an
PERIOD - is a future and certain event upon the arrival of
event a condition, it is not enough that it be future; it must
which the obligation subject to it either arises or is
also be uncertain.
extinguished.
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 THE DEBTOR PROMISES TO PAY WHEN HIS UPON THE WILL OF A THIRD PERSON, THE
MEANS PERMIT HIM TO DO SO OBLIGATION SHALL TAKE EFFECT IN CONFORMITY
 OTHER CASES WITH THE PROVISIONS OF THIS CODE.
ARTICLE 1181. IN CONDITIONAL OBLIGATIONS, * Classification of conditions
THE ACQUISITION OF RIGHTS, AS WELL AS THE
1. AS TO EFFECT:
EXTINGUISHMENT OR LOSS OF THOSE ALREADY
ACQUIRED, SHALL DEPEND UPON THE HAPPENING  SUSPENSIVE – the happening of which gives rise
OF THE EVENT WHICH CONSTITUTES THE to the obligation
CONDITION.  RESOLUTORY – the happening of which
extinguishes the obligation
* Effect of happening of condition
2. AS TO FORM:
1. ACQUISITION OF RIGHTS - In obligations subject to
a suspensive condition, the acquisition of rights by the  EXPRESS – the condition is clearly stated
creditor depends upon the happening of the event which  IMPLIED – the condition is merely inferred
constitutes the condition.
3. AS TO POSSIBILITY:
2. LOSS OF RIGHTS ALREADY ACQUIRED - In
 POSSIBLE – the condition is capable of fulfillment,
obligations subject to a resolutory condition, the
legally and physically
happening of the event which constitutes the condition
 IMPOSSIBLE – the condition is not capable of
produces the extinguishment or loss of rights already
fulfillment, legally or physically
acquired.
4. AS TO CAUSE OR ORIGIN:
ARTICLE 1182. WHEN THE FULFILLMENT OF THE
CONDITION DEPENDS UPON THE SOLE WILL OF  POTESTATIVE – the condition depends upon the
THE DEBTOR, THE CONDITIONAL OBLIGATION will of one of the contracting parties
SHALL BE VOID. IF IT DEPENDS UPON CHANCE OR  CASUAL – the condition depends upon chance or
upon the will of a third person
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 MIXED - the condition depends partly upon chance 1. CONDITIONAL OBLIGATION VOID – Where the
and partly upon the will of a third person potestative condition depends solely upon the will of the
debtor, the conditional obligation shall be void because
5. AS TO MODE:
its validity and compliance is left to the will of the debtor
 POSITIVE – the condition consists in the (Art. 1308.) and it cannot, therefore, be legally
performance of an act demanded.3 In order not to be liable, the debtor will not
 NEGATIVE – the condition consists in the omission just fulfill the condition. There is no burden on the debtor
of an act and consequently, no juridical tie is created. (Art. 1156.)
6. AS TO NUMBERS: 2. ONLY THE CONDITION VOID - If the obligation is a
pre-existing one, and, therefore, does not depend for its
 CONJUNCTIVE – there are several conditions and
existence upon the fulfillment by the debtor of the
all must be fulfilled
potestative condition, only the condition is void leaving
 DISJUNCTIVE – there are several conditions and
unaffected the obligation itself. Here, the condition is
only one or some of them must be fulfilled
imposed not on the birth of the obligation but on its
7. AS TO DIVISIBILITY: fulfillment.
 DIVISIBLE – the condition is susceptible of partial CASUAL CONDITION - If the suspensive condition
performance depends upon chance or upon the will of a third person,
 INDIVISIBLE – the condition is not susceptible of the obligation subject to it is valid.
partial performance
MIXED CONDITION - The obligation is valid if the
POTESTATIVE CONDITION - is a condition suspensive suspensive condition depends partly upon chance and
in nature and which depends upon the sole will of one of partly upon the will of a third person.
the contracting parties.
*Where suspensive condition depends upon will of debtor
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ARTICLE 1183. IMPOSSIBLE CONDITIONS, THOSE ARTICLE 1184. THE CONDITION THAT SOME EVENT
CONTRARY TO GOOD CUSTOMS OR PUBLIC HAPPEN AT A DETERMINATE TIME SHALL
POLICY AND THOSE PROHIBITED BY LAW SHALL EXTINGUISH THE OBLIGATION AS SOON AS THE
ANNUL THE OBLIGATION WHICH DEPENDS UPON TIME EXPIRES OR IF IT HAS BECOME INDUBITABLE
THEM. IF THE OBLIGATION IS DIVISIBLE, THAT THAT THE EVENT WILL NOT TAKE PLACE.
PART THEREOF WHICH IS NOT AFFECTED BY THE
POSITIVE CONDITION
IMPOSSIBLE OR UNLAWFUL CONDITION SHALL BE
VALID. ARTICLE 1185. THE CONDITION THAT SOME EVENT
WILL NOT HAPPEN AT A DETERMINATE TIME
THE CONDITION NOT TO DO AN IMPOSSIBLE THING
SHALL RENDER THE OBLIGATION EFFECTIVE
SHALL BE CONSIDERED AS NOT HAVING BEEN
FROM THE MOMENT THE TIME INDICATED HAS
AGRRED UPON.
ELAPSED, OR IF IT HAS BECOME EVIDENT THAT
* Two kinds of impossible conditions THE EVENT CANNOT OCCUR.
PHYSICALLY IMPOSSIBLE CONDITIONS – when they, IF NO TIME HAS BEEN FIXED, THE CONDITION
in the nature of things, cannot exist or cannot be done. SHALL BE DEEMED FULFILLED AT SUCH TIME AS
MAY HAVE PROBABLY BEEN CONTEMPLATED,
LEGALLY IMPOSSIBLE CONDITIONS – when they are
BEARING IN MIND THE NATURE OF OBLIGATION.
contrary to law, morals, good customs, public order, or
public policy. NEGATIVE CONDITION
* Effect of impossible conditions ARTICLE 1186. THE CONDITION SHALL DEEMED
FULFILLED WHEN THE OBLIGOR VOLUNTARILY
 CONDITIONAL OBLIGATION VOID
PREVENTS ITS FULFILLMENT.
 CONDITIONAL OBLIGATION VALID
 ONLY THE AFFECTED OBLIGATION VOID * Constructive fulfillment of suspensive condition.
 ONLY THE CONDITION VOID
There are three (3) requisites for the application of this
article:
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(1) The condition is suspensive; PERSON CONSTITUTING THE SAME WAS

DIFFERENT.
(2) The obligor actually prevents the fulfillment of the
condition; and IN OBLIGATIONS TO DO AND NOT TO DO, THE
COURTS SHALL DETERMINE, IN EACH CASE, THE
(3) He acts voluntarily.
RETROACTIVE EFFECT OF THE CONDITION THAT
The law does not require that the obligor acts with HAS BEEN COMPLIED WITH.
malice or fraud as long as his purpose is to prevent the
* Retroactive effects of fulfillment of suspensive
fulfillment of the condition. He should not be allowed to
condition.
profit from his own fault or bad faith to the prejudice of
the obligee. In a reciprocal obligation like a contract of  IN OBLIGATIONS TO GIVE
sale, both parties are mutually obligors and also obligee.  IN OBLIGATIONS TO DO OR NOT TO DO
ARTICLE 1187. THE EFFECTS OF A CONDITIONAL * Retroactive effects as to fruits and interests in
OBLIGATION TO GIVE, ONCE THE CONDITION HAS obligations to give.
BEEN FULFILLED, SHALL RETROACT TO THE DAY
 IN RECIPROCAL OBLIGATIONS
OF THE CONSTITUTION OF THE OBLIGATION.
 IN UNILATERAL OBLIGATIONS
NEVERTHELESS, WHEN THE OBLIGATION IMPOSES
RECIPROCAL PRESTATIONS UPON THE PARTIES, ARTICLE 1188. THE CREDITOR MAY, BEFORE THE
THE FRUITS AND THE INTERESTS DURING THE FULFILLMENT OF THE CONDITIO, BRING THE
PENDENCY OF THE CONDITION SHALL BE DEEMED APPROPRIATE ACTIONS FOR THE PRESERVATION
TO HAVE BEEN MUTUALLY COMPENSATED. IF THE OF HIS RIGHT.
OBLIGATION IS UNILATERAL, THE DEBTOR SHALL
THE DEBTOR MAR RECOVER WHAT DURING THE
APPROPRIATE THE FRUITS AND INTERESTS
SAME TIME HE HAS PAID BY MISTAKE IN CASE OF
RECEIVED, UNLESS FROM THE NATURE AND
A SUSPENSIVE CONDITION.
CIRCUMSTANCES OF THE OBLIGATION IT SHOULD
BE INFERRED THAT THE INTENTION OF THE
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* Rights pending fulfillment of suspensive condition. 1. IF THE THING IS LOST WITHOUT THE FAULT
OF THE DEBTOR, THE OBLIGATION SHALL BE
 RIGHTS OF CERIDTOR - He may take or bring
EXTINGUISHED;
appropriate actions for the preservation of his right,
2. IF THE THING IS LOST THROUGH THE FAULT
as the debtor may render nugatory the obligation
OF THE DEBTOR, HE SHALL BE OBLIGED TO
upon the happening of the condition. Thus, he may
PAY DAMAGES; IT IS UNDERSTOOD THAT
go to court to prevent the alienation or
THE THING IS LOST WHEN IT PERISHES, OR
concealment of the property of the debtor or to
GOES OUT OF COMMERCE, OR DISAPPEARS
have his right annotated in the registry of property.
IN SUCH A WAY THAT ITS EXISTENCE IS
 RIGHTS OF DEBTOR - He is entitled to recover
UNKNOWN OR IT CANNOT BE RECOVERED;
what he has paid by mistake prior to the happening
3. WHEN THE THING DETERIORATES WITHOUT
of the suspensive condition. This right is granted to
THE FAULT OF THE DEBTOR, THE
the debtor because the creditor may or may not be
IMPAIRMENT IS TO BE BORNE BY THE
able to fulfill the condition imposed and hence, it is
CREDITOR;
not certain that the obligation will arise. This is a
4. IF IT DETERIORATES THROUGH THE FAULT
case of solutio indebiti which is based on the
OF THE DEBTOR, THE CREDITOR MAY
principle that no one shall enrich himself at the
CHOOSE BETWEEN THE RESCISSION OF THE
expense of another.
OBLIGATION AND ITS FULFILLMENT, WITH
ARTICLE 1189. WHEN THE CONDITIONS HAVE INDEMNITY FOR DAMAGES IN EITHER CASE;
BEEN IMPOSED WITH THE INTENTION OF 5. IF THE THING IS IMPROVED BY ITS NATURE,
SUSPENDING THE EFFICACY OF AN OBLIGATION OR BY TIME, THE IMPROVEMENT SHALL
TO GIVE, THE FOLLOWING RULES SHALL BE INURE TO THE BENEFIT OF THE CREDITOR;
OBSERVED IN CASE OF THE IMPROVEMENT, LOSS 6. IF IT IS IMPROVED AT THE EXPENSE OF THE
OR DETERIORATION OF THE THIG DURING THE DEBTOR, HE SHALL HAVE NO OTHER RIGHT
PENDECY OF THE CONDITION; THAN THAT GRANTED TO THE
USUFRUCTUARY.
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* Requisites for application of Article 1189. be recovered (Art. 1189[2].), whether as a matter of fact
(e.g., a particular ring is dropped from a ship at sea) or of
Article 1189 applies only if:
law (e.g., a property is lost through prescription).
(1) The obligation is a real obligation;
* Rules in case of loss, deterioration, or improvement of
(2) The object is a specific or determinate thing; thing during pendency of suspensive condition.
(3) The obligation is subject to a suspensive condition;  LOSS OF THING WITHOUT DEBTOR’S FAULT
(4) The condition is fulfilled; and
 LOSS OF THING THROUGH DEBTOR’S FAULT
 DETERIORATION OF THING WITHOUT
(5) There is loss, deterioration, or improvement of the DEBTOR’S FAULT
thing during the pendency of the happening on one  DETERIORATION OF THING THROUGH
condition. DEBTOR’S FAULT
* Kinds of Loss  IMPROVEMENT OF THING BY NATURE OR BY
TIME
1. PHYSICAL LOSS - when a thing perishes as when a  IMPROVEMENT OF THING AT EXPENSE OF
house is burned and reduced to ashes DEBTOR
2. LEGAL LOSS - when a thing goes out of commerce USUFRUCT – is the right to enjoy the use and fruits of a
(e.g., when it is expropriated) or when a thing heretofore thing belonging to another.
legal becomes illegal (e.g., during the Japanese
occupation, American dollars had become impossible ARTICLE 1190. WHEN THE CONDITIONS HAVE FOR
since their use was forbidden by the belligerent THEIR PURPOSE THE EXTINGUISHMENT OF AN
occupant); or OBLIGATION TO GIVE, THE PARTIES, UPON THE
FULFILLMENT OF SAID CONDITIONS, SHALL
3. CIVIL LOSS - when a thing disappears in such a way RETURN TO EACH OTHER WHAT THEY HAVE
that its existence is unknown (e.g., a particular dog has RECEIVED.
been missing for sometime); or even if known, it cannot
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IN CASE OF LOSS, DETERIORATION OR ARTICLE 1191. THE POWER TO RESCIND

IMPROVEMENT OF THE THING, THE PROVISIONS OBLIGATIONS IS IMPLIED IN RECIPROCAL ONES, IN
WHICH, WITH RESPECT TO THE DEBTOR, ARE LAID CASE ONE OF THE OBLIGORS SHOULD NOT
DOWN IN THE PRECEDING ARTICLE SHALL BE COMPLY WITH WHAT IS INCUMBENT UPON HIM.
APPLIED TO THE PARTY WHO IS BOUND TO
THE INJURED PARTY MAY CHOOSE BETWEEN THE
RETURN.
FULFILLMENT AND THE RESCISSION OF THE
AS FOR OBLIGATIONS TO DO AND NOT TO DO, THE OBLIGATION, WITH THE PAYMENT OF DAMAGES IN
PROVISIONS OF THE SECOND PARAGRAPH OF EITHER CASE. HE MAY ALSO SEEK RESCISSION,
ARTICLE 1187 SHALL BE OBSERVED AS REGARDS EVEN AFTER HE HAS CHOSEN FULFILLMENT, IF
THE EFFECT OF THE EXTINGUISHMENT OF THE THE LATTER SHOULD BECOME IMPOSSIBLE.
OBLIGATION.
THE COURT SHALL DECREE THE RESCISSION
* Effects of fulfillment of resolutory condition. CLAIMED, UNLESS THERE BE JUST CAUSE
AUTHORIZING THE FIXING OF A PERIOD.
(1) In obligations to give. — When the resolutory
condition in an obligation to give is fulfilled, the obligation THIS IS UNDERSTOOD TO BE WITHOUT PREJUDICE
is extinguished (Art. 1181.) and the parties are obliged to TO THE RIGHTS OF THIRD PERSONS WHO HAVE
return to each other what they have received under the ACQUIRED THE THING, IN ACCORDANCE WITH
obligation. ARTICLES 1385 AND 1388 AND THE MORTGAGE
LAW.
(2) In obligations to do or not to do. — In some
obligations, the courts shall determine the retroactive * Kinds of obligation according to the person obliged.
effect of the fulfillment of the resolutory condition (par. 2.)
They are:
as in the case where the condition is suspensive. (Art.
1187, par. 2.) The courts in the exercise of discretion (1) Unilateral. — when only one party is obliged to
may even disallow retroactivity taking into account the comply with a prestation.
circumstances of each case.
 Page |9

(2) Bilateral. — when both parties are mutually bound * Limitations on right to demand rescission.
to each other. In other words, both parties are
(1) Resort to the courts.
debtors and creditors of each other. Bilateral
obligations may be reciprocal or non-reciprocal. (2) Power of court to fix period.
 Reciprocal obligations are those which
(3) Right of third persons.
arise from the same cause and in which
each party is a debtor and creditor of the (4) Substantial violation.
other, such that the performance of one is (4) Waiver or right.
designed to be the equivalent and the
condition for the performance of the other. (5) Compliance by aggrieved party with his
 Non-reciprocal obligations are those obligation.
which do not impose simultaneous and (6) Slight or substantial violation.
correlative performance on both parties. In
other words, the performance of one party is (7) Contract to sell.
not dependent upon the simultaneous (8) Sales of real property and of personal property in
performance by the other of his own installments.
obligation.
(9) Judicial compromise.
* Remedies in reciprocal obligations
(10) Arbitration clause in a contract.
1. CHOICE OF REMEDIES
* Rescission without previous judicial decree.
RESCISSION – is the remedy available to an oblige
when the obligor fails to comply with his obligation, to  WHERE AUTOMATIC RESCISSION EXPRESSLY
abrogate their contract as if it was never entered into, STIPULATED - The parties, may validly enter into
with the right to recover damages. an agreement that violation of the terms of the
contract would cause cancellation thereof even
2. REMEDY OF RESCISSION FOR NON-COMPLIANCE without judicial intervention or permission or
 P a g e | 10

termination. This stipulation is in the nature of a of the obligation. In this case, the liability of the first
resolutory condition. infractor should be equitably reduced.
 WHERE CONTRACT STILL EXECUTORY - — In
2. FIRST INFRACTOR CANNOT BE DETERMINED. –
the absence of stipulation to the contrary, the right
One party violated his obligation followed by the other,
to rescind a contract must be invoked judicially; it
but it cannot be determined which of them was the first
cannot be exercised solely on a party’s own
infractor. The rule is that the contract shall be deemed
judgment that the other has committed a breach of
extinguished and each shall bear his own damages. This
the obligation
means that the contract shall not be enforced. In effect,
COMPROMISE - is an agreement between two or more the court shall not provide remedy to either of the parties,
persons who, for preventing or putting an end to a who must suffer the damages allegedly sustained by
lawsuit, adjust their respective positions by mutual them.
consent in the way they feel they can live with.
ARTICLE 1193. OBLIGATIONS FOR WHOSE
ARTICLE 1192. IN CASE BOTH PARTIES HAVE FULFILLMENT A DAY CERTAIN HAS BEEN FIXED,
COMMITTED A BREACH OF THE OBLIGATION, THE SHALL BE DEMANDABLE ONLY WHEN THAT DAY
LIABILITY OF THE FIRST INFRACTOR SHALL BE COMES.
EQUITABLY TEMPERED BY THE COURTS. IF IT
OBLIGATIONS WITH A RESOLUTORY PERIOD TAKE
CANNOT BE DETERMINED WHICH OF THE PARTIES
EFFECT AT ONCE, BUT TERMINATE UPON ARRIVAL
FIRST VIOLATED THE CONTRACT, THE SAME
OF THE DAY CERTAIN.
SHALL BE DEEMED EXTINGUISHED, AND EACH
ALL BEAR HIS OWN DAMAGES. A DAY CERTAIN IS UNDERSTOOD TO BE WHAT
WHICH MUST NECESSARILY COME, ALTHOUGH IT
* Where both parties are guilty of breach
MAY NOT BE KNOWN WHEN.
1. FIRST INFRACTOR KNOWN. – One party violated his
IF THE UNCERTAINTY CONSISTS IN WHETHER THE
obligation; subsequently, the other also violated his part
DAY WILL COME OR NOT, THE OBLIGATION IS
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CONDITIONAL, AND IT SHALL BE REGULATED BY the fact that the obligation existed. On the other hand, a
THE RULES OF THE PRECEDING SECTION. condition causes an obligation to arise or to cease.
OBLIGATION WITH A PERIOD - is one whose effects or (4) As to effect, when left to debtor’s will. — A period
consequences are subjected in one way or another to the which depends upon the will of the debtor empowers the
expiration or arrival of said period or term. court to fix the duration thereof (Art. 1197, par. 2.), while
a condition which depends upon the sole will of the
PERIOD - is a future and certain event upon the arrival of
debtor invalidates the obligation
which the obligation (or right) subject to it either arises or
is terminated. It is a day certain which must necessarily (5) As to retroactivity of effects. — Unless there is an
come (like the year 2005; next Christmas), although it agreement to the contrary, the arrival of a period does
may not be known when, like the death of a person. not have any retroactive effect, while the happening of a
condition has retroactive effect.
* Period and condition distinguished.
Like a condition (see Art. 1183.), a period must be
The differences are as follows:
possible. If the period is impossible (e.g., February 30,
(1) As to fulfillment. — A period is a certain event which because it will never come; within 24 hours to deliver a
must happen sooner or later at a date known beforehand, ship in foreign country because it is too short), the
or at a time which cannot be determined, while a obligation is void.
condition is an uncertain event
* Kinds of period or term.
(2) As to time. — A period refers only to the future, while
They are:
a condition may refer also to a past event unknown to the
parties (1) According to effect:
(3) As to influence on the obligation. — A period (a) Suspensive period (ex die). — The obligation
merely fixes the time for the efficaciousness of the begins only from a day certain upon the arrival of the
obligation. If suspensive, it cannot prevent the birth of the period
obligation in due time; if resolutory, it does not invalidate
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(b) Resolutory period (in diem). — The obligation ARTICLE 1195. ANYTHING PAID OR DELIVERED
is valid up to a day certain and terminates upon the BEFORE THE ARRIVAL OF THE PERIOD, THE
arrival of the period. OBLIGOR BEING UNAWARE OF THE PERIOD OR
BELIEVING THAT THE OBLIGATION HAS BECOME
(2) According to source:
DUE AND DEMANDABLE, MAY BE RECOVERED,
(a) Legal period. — When it is provided for by WITH THE FRUITS, AND INTERESTS.
laws
ARTICLE 1196. WHENEVER IN AN OBLIGATION A
(b) Conventional or voluntary period. — When it PERIOD IS DESIGNATED, IT IS PRESUMED TO HAVE
is agreed to by the parties BEEN ESTABLISHED FOR THE BENEFIT OF BOTH
THE CREDITOR AND THE DEBTOR, UNLESS FROM
(c) Judicial period. — When it is fixed by the
THE TENOR OF THE SAME OR ORTHER
court.
CIRCUMSTANCES, IT SHOULD APPEAR THAT THE
(3) According to definiteness: PERIOD HAS BEEN ESTABLISHED IN FAVOR OF
(a) Definite period. — When it is fixed or it is ONE OR OF THE OTHER.
known when it will come * Exceptions to the general rule.
(b) Indefinite period. — When it is not fixed or it is (1) Term is for the benefit of the debtor alone. — He
not known when it will come. Where the period is not cannot be compelled to pay prematurely, but he can, if he
fixed but a period is intended, the courts are usually desires, do so.
empowered by law to fix the same.
(2) Term is for the benefit of the creditor. — He may
ARTICLE 1194. IN CASE OF LOSS, DETERIORATION demand fulfillment even before the arrival of the term but
OR IMPROVEMENT OF THE THING BEFORE THE the debtor cannot require him to accept payment before
ARRIVAL OF THE DAY CERTAIN, THE RULES IN the expiration of the stipulated period
ARTICLE 1189 SHALL BE OBSERVED.
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ARTICLE 1197. IF THE OBLIGATION DOES NOT FIX  DURATION OF THE PERIOD DEPENDS UPON
A PERIOD, BUT FROM ITS NATURE AD THE THE WILL OF THE DEBTOR
CIRCUMSTANCES IT CAN BE INFERRED THAT A
* Legal effect where suspensive period/ condition
PERIOD WAS INTENDED, THE COURTS MAY FIX
depends upon will of debtor.
THE DURATION THEREOF.
 EXISTENCE OF OBLIGATION
THE COURTS SHALL ALSO FIX THE DURATION OF
 VALIDITY OF OBLIGATION
THE PERIOD WHEN IT DEPENDS UPON THE WILL
OF THE DEBTOR. * Period fixed cannot be changed by the courts.

IN EVERY CASE, THE COURT SHALL DETERMINE 1. PERIOD AGREED UPON BY THE PARTIES – If there
SUCH PERIOD AS MAY UNDER THE is a period agreed upon by the parties and it has already
CIRCUMSTANCES HAVE BEEN PROBABLY lapsed or expired, the court cannot fi x another period.
CONTEMPLATED BY THE PARTIES. ONCE FIXED BY
2. PERIOD FIXED BY THE COURTS –From the very
THE COURTS, THE PERIOD CANNOT BE CHANGED
moment the parties give their acceptance and consent to
BY THEM.
the period fixed by the court, said period acquires the
* Court generally without power to fix a period. nature of a covenant, because the effect of such
acceptance and consent by the parties is exactly the
The period mentioned in the above provision refers to a
same as if they had expressly agreed upon it, and having
judicial period as distinguished from the period fixed by
been agreed upon by them, it becomes a law governing
the parties in their contract which is known as
their contract. The period fixed in a final judgment is res
contractual period.
judicata and as such forms an integral part of the
* Exceptions to the general rule. imperfect contract which gave rise to its designation by
the court, and thence, forward part of a perfect and
 NO PERIOD IS FIXED BUT A PERIOD WAS
binding contract. Consequently, the court cannot change
INTENDED
it. (Barretto vs. City of Manila, 11 Phil. 624 [1908].)
 P a g e | 14

However, the parties may modify the term by a new * When obligation can be demanded before lapse of
agreement. period.
ARTICLE 1198. THE DEBTOR SHALL LOSE EVERY (1) When debtor becomes insolvent.
RIGHT TO MAKE USE OF THE PERIOD:
(2) When debtor does not furnish guaranties or securities
1. WHEN AFTER THE OBLIGATION HAS BEEN promised.
CONTRACTED, HE BECOMES INSOLVENT,
(3) When guaranties or securities given have been
UNLESS HE GIVES A GUARANTY OR
impaired or have disappeared
SECURITY FOR THE DEBT;
2. WHEN HE DOES NOT FURNISH TO THE (4) When debtor violates an undertaking.
CREDITOR THE GUARANTIES OR SECURITIES
(5) When debtor attempts to abscond.
WHICH HE HAS PROMISED;
3. WHEN HIS OWN ACTS HE HAS IMPAIRED SAID
GUARANTIES OR SECURITIES AFTER THEIR
ESTABLISHMENT, AND WHEN THROUGH A
FORTUITOUS EVENT THEY DISAPPEAR,
UNLESS HE IMMEDIATELY GIVES NEW ONES
EQUALLY SATISFACTORY;
4. WHEN THE DEBTOR VIOLATES ANY
UNDERTAKING, IN CONSIDERATION OF
WHICH THE CREDITOR AGREED TO THE
PERIOD;
5. WHEN THE DEBTOR ATTEMPTS TO
ABSCOND.