A contract is concluded under a condition if its formation or termination depends on an uncertain event.134 A condition is a future uncertain event upon which the commencement (beginning) or termination of a legal transaction depends, whether by the will of a subject or based on the law. For an event to qualify as a condition, it must be uncertain and in the future, meaning it does not yet exist. The condition must also be lawful and possible.135
We distinguish between a suspensive condition and a resolutory condition.
A suspensive condition means that the contract will only take effect upon the fulfilment of the condition, meaning when an uncertain event, as defined at the time of the contract’s conclusion, occurs. Until the suspensive condition is fulfilled, the party to the legal transaction does not yet have a claim for performance.
A resolutory condition, on the other hand, means that a contract concluded under such a condition ceases to be valid if the condition is fulfilled.136 The parties may agree that the contract remains valid despite the fulfilment of the condition, but such an agreement must be explicit.
It is considered that the condition is fulfilled if its fulfilment is prevented contrary to the principle of good faith and fair dealing by the party to whose detriment it was set. Conversely, it is considered unfulfilled if its fulfilment is induced contrary to the principle of good faith and fair dealing by the party for whose benefit it was set. 137
A contract that includes a condition contrary to the constitution, mandatory regulations, or moral principles is null and void. Likewise, a contract concluded under an impossible suspensive condition is null and void, while an impossible resolutory condition is considered non-existent.138
The Obligations Code (OZ) thus sets clear rules regarding the effectiveness of contracts under conditions, ensuring legal certainty and clarity in business transactions. Concluding legal transactions under conditions allows parties to adjust their obligations in accordance with specific future events or circumstances.
