The document discusses resolutive conditions in contracts. A resolutive condition immediately binds the contract upon agreement but allows the contract to terminate retroactively if the condition is met. This would end the rights and obligations of the parties and return them to the pre-contract state. An example given is an employment contract terminating if the employee commits a crime. The condition must be clearly defined and have a time period specified. Parties cannot deliberately cause a condition to be met to avoid obligations, as the law prevents using conditions in bad faith to gain benefits contrary to the original agreement.
The document discusses resolutive conditions in contracts. A resolutive condition immediately binds the contract upon agreement but allows the contract to terminate retroactively if the condition is met. This would end the rights and obligations of the parties and return them to the pre-contract state. An example given is an employment contract terminating if the employee commits a crime. The condition must be clearly defined and have a time period specified. Parties cannot deliberately cause a condition to be met to avoid obligations, as the law prevents using conditions in bad faith to gain benefits contrary to the original agreement.
The document discusses resolutive conditions in contracts. A resolutive condition immediately binds the contract upon agreement but allows the contract to terminate retroactively if the condition is met. This would end the rights and obligations of the parties and return them to the pre-contract state. An example given is an employment contract terminating if the employee commits a crime. The condition must be clearly defined and have a time period specified. Parties cannot deliberately cause a condition to be met to avoid obligations, as the law prevents using conditions in bad faith to gain benefits contrary to the original agreement.
The document discusses resolutive conditions in contracts. A resolutive condition immediately binds the contract upon agreement but allows the contract to terminate retroactively if the condition is met. This would end the rights and obligations of the parties and return them to the pre-contract state. An example given is an employment contract terminating if the employee commits a crime. The condition must be clearly defined and have a time period specified. Parties cannot deliberately cause a condition to be met to avoid obligations, as the law prevents using conditions in bad faith to gain benefits contrary to the original agreement.
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When dealing with a resolutive condition, the contract is immediately binding with all rights and
obligations coming into existence from day one of the contract and there is no suspension of these rights and obligations. Unlike a suspensive condition, if a resolutive condition is fulfilled, it would have the effect of terminating the contract with retrospect between the parties and the operation of the rights and obligations between the parties would immediately cease to exist. The parties would then need to be restored to their pre-contractual state, which is often complicated as this may for example require the unbundling of a complicated transaction. In this instance it may be better suited, to avoid such unbundling, to make use of a suspensive condition.
Whereas the fulfillment of a suspensive condition breathes life into otherwise inoperative rights and obligations, the fulfillment of a resolutive condition ends the existence of rights and obligations (or the entire contract). In the case of a resolutive condition, there is no suspension or postponement of terms in a contract or the validity of the contract/offer itself. Rights and obligations come into existence immediately upon agreement between the parties. If a resolutive condition is fulfilled, the operation of the rights and obligations cease.
For example: On the 01st of December Company X and Mr Y enter into a valid employment contract. The contract determines that if the employee commits a crime, the employment contract will immediately become null and void. Even though there was a valid employment contract in place, Mr Y can be asked to leave the company as soon as he commits a crime on the basis that the contract became void and unenforceable as soon as he committed the crime.
In the case where a resolutive condition is stipulated in a contract, the contract is immediately binding after the parties thereto have signed it, and will remain binding subject to the future event stipulated in the condition being fulfilled. An example is where it is stipulated that the contract will terminate if a national road is built next to the property sold, within a certain period. The event referred to in the condition must be accurately described and a time period must be specified for fulfilment (or non- fulfilment) of the condition.
If a condition is deliberately prevented from being fulfilled, the condition is deemed to have been fulfilled.
An example of this is when the buyer decides he does not want the property anymore and stalls the process of getting finance from a bank, until after the fulfilment date (of having to get a bond) agreed upon in the offer to purchase.
If a person donates a parcel of land to the City of Manila subject to the condition that the City shall transform it into a public park within a period of one year from the time of the perfection of the donation, the condition which is imposed is resolutory in character. For example: On 15 January 2004 Mr. X sold his property to Oak Tree (Pty) Ltd. The sale agreement provided that the sale would be cancelled and the parties would restore each other to their original position if the purchaser was unsuccessful in obtaining rezoning. Some time after taking possession of the property, the purchaser’s rezoning application failed. The sale of the property had to be transferred back to the Mr X and the purchase price remitted to Oak Tree (Pty) Ltd.
A resolutive condition is one which provides for the termination of the contract after an interim period of operation. It brings the contract to an end upon the happening of a specified event, for example.A fairly common resolutive condition in property deals is one that provides that the sale is to be regarded as void if the necessary planning permission is refused.
It has been held in cases relating to resolutive conditions that, where one party has deliberately caused the fulfilment of that condition thereby relieving him of an obligation which he bore up until the resolutive condition was fulfilled, he nevertheless continues to be bound, by application of a variant of the doctrine discussed above, and which might, rather clumsily, be referred to as the doctrine of fictional nonfulfilment. The parties are then required to act as though the resolutive condition had not been fulfilled.
Contracting parties are expected to keep their promises and the law will not countenance a situation where a party acting in bad faith obtains a benefit from his actions, contrary to what was intended when the deal was struck.
Resolutory condition refers to a condition whereby, upon fulfillment terminates an already enforceable obligation. It also entitles the parties to be resorted to their original positions. A resolutory condition is also implied in all commutative contracts. It takes effect in case either of the parties does not comply with his/her engagements, in which event the party complaining of the breach may sue for dissolution of the contract with damages. Resolutory condition is also known as resolutive condition, or dissolving condition.
