Types of Contractual Conditions

Types of Contractual Conditions

A condition refers to a commitment or obligation. In legal terms, a condition is a subsidiary obligation incorporated into a principal obligation, namely the contract. It represents a mutual undertaking by which the parties bind themselves to perform or refrain from a specific act within the contract.

Validity and Invalidity of Contractual Conditions Under the Civil Code

Legal Nature of Conditions

A condition constitutes a secondary obligation attached to the principal contract. The relationship between a contract and its conditions is one of principal and accessory.

The existence of a condition depends on the validity of the contract. However, the invalidity or lapse of a condition does not necessarily affect the validity of the contract itself.

Conditions follow the legal status of the contract in all respects, including necessity, permissibility, validity, non-enforceability, and nullity. If the contract is void, the condition is also void.

If the contract is valid, the condition is valid. If the contract is non-enforceable, the condition is likewise non-enforceable.

The parties to a contract may include any condition they deem appropriate, provided that such condition is not among the invalid conditions that are detrimental to the contract.

Types of Conditions

Valid Conditions

Pursuant to Article 234 of the Civil Code, valid conditions are divided into three categories:

• Condition of attribute.
• Condition of result.
• Condition of the act, whether affirmative or negative.

Condition of Attribute

A condition of attribute relates to a specific quality or characteristic of the subject matter of the contract, provided that the subject matter is a tangible external object. Accordingly, two requirements must be met. First, the subject matter of the transaction must be a tangible object. Second, the condition must relate to one of its attributes.

For example, a person may purchase a parcel of land on the condition that it has a width of 50 meters and a length of 100 meters. In this case, the subject matter is a tangible object, and the condition concerns its quantitative attributes. Therefore, a condition of attribute refers to a condition relating to the quality or quantity of the subject matter, such as purchasing a carpet made of silk wool or acquiring an item on the condition that it is antique.

Condition of Result

A condition of result refers to a condition whereby the realization of a specific legal effect is stipulated to occur automatically upon conclusion of the contract. In other words, the parties agree that by entering into the contract, another legal consequence shall simultaneously arise.

An example is a lease agreement that includes an option to acquire ownership, under which the leased property is transferred to the tenant at the end of the lease term.

Condition of the Act

According to Article 234 of the Civil Code, a condition of an act involves an obligation imposed on one of the contracting parties or on a third party to perform or refrain from performing a specific act.

The act may be a legal act, such as entering into another contract, or a material act, such as constructing a building or creating a work of art.

A condition of an act may be either affirmative or negative. An affirmative condition of the act requires the obligated party to perform a specific act. For example, in a contract for the sale of a house, the buyer may undertake to donate a vehicle to the seller free of charge or to construct a three-story building at their own expense.

A negative condition of an act requires the obligated party to refrain from performing a specific act. For instance, in a lease agreement, the tenant may be prohibited from subleasing the property to a third party.

Invalid Conditions

Articles 232 and 233 of the Civil Code distinguish between invalid conditions that do not invalidate the contract and invalid conditions that render the contract void. Accordingly, conditions are divided into two main categories:

• Invalid conditions that do not invalidate the contract.
• Invalid conditions that invalidate the contract.

Invalid Conditions That Do Not Invalidate the Contract

Pursuant to Article 232 of the Civil Code, the following conditions are invalid but do not invalidate the contract:

• A condition that is impossible to perform.
• A condition that lacks rational benefit or utility.
• An unlawful condition.

Impossible Conditions

The purpose of including a condition in a contract is to bring about its realization. If performance of the condition is impossible, whether it concerns the delivery of property or the performance of an act, the intended benefit to the beneficiary cannot be achieved, rendering the condition invalid.

Such a condition is treated as nonexistent, meaning that the parties have no genuine intent to perform it. As a result, its invalidity does not affect the contract. For example, if in the sale of a house the buyer stipulates that the seller must transfer a parrot free of charge within two days, but it is later discovered that the parrot had escaped before the contract was signed, the buyer may be entitled to damages. Another example is a construction contract requiring completion of a twenty-story building within one month.

Conditions Without Rational Benefit

The benefit referred to must be rational and reasonable. A condition lacking such benefit is considered meaningless by reasonable persons, and the law regards its performance as legally ineffective. Therefore, such a condition is invalid for lacking purpose and effect.

Unlawful Conditions

An unlawful condition contravenes applicable statutory laws. Since the performance of an unlawful act is legally impermissible, the law does not support enforcing such a condition. A condition lacking legal support is not recognized as a legal right and is legally ineffective and void.

Invalid Conditions That Invalidate the Contract

Conditions Contrary to the Essence of the Contract

Every contract has inherent legal effects. A condition that contradicts the essential nature of the contract is invalid and also renders the contract void. The essential effect of a contract constitutes its core substance, and removal of this effect eliminates the existence of the contract itself.

Just as it is impossible to request salt that is not salty, it is equally impossible to recognize a contract while denying its essential legal effect. The essential effect of a contract is inseparable from the contract itself.

Ambiguous Conditions Causing Uncertainty in the Subject Matter

If a condition incorporated into a contract creates uncertainty regarding the subject matter or the consideration, one of the essential requirements for the contract’s validity is undermined, rendering it invalid.

Since the principal contract becomes void, there remains no basis for the survival of the condition, which is merely an accessory obligation.

Frequently Asked Questions About Types of Contractual Conditions