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What is a Resolutory Period?

  • A resolutory period is a specific timeframe attached to an obligation or contract. The fulfillment of the obligation or termination of the contract happens upon the arrival of this period.
  • It's important to understand that a resolutory period operates differently from a regular period or deadline. With a regular period, the obligation becomes due and must be fulfilled on a particular date. With a resolutory period, the contract comes to an end.

    • Key Points (Based on the Civil Code of the Philippines):

    • Article 1191 - Contracts with a resolutory period become effective at once but are terminated upon the arrival of the set period.
    • Article 1192 - If the obligation of either party becomes impossible to fulfill (due to no fault of the parties), the obligation is extinguished.
    • Article 1193 - In cases with a set period, the obligation only becomes demandable when that period arrives. However, there's the concept of a "day certain," a period that will undoubtedly happen, even if the exact date is unknown (e.g., a person's death).

    How Does a Resolutory Period Work?

    1. Establishing the Period: The parties involved must mutually agree upon the resolutory period. It's often expressly stated in the contract.
    2. Contract Takes Effect: The contract, along with its obligations, becomes effective immediately.
    3. Termination: Upon the arrival of the resolutory period, the contract is automatically terminated without any further action needed.

    Example:

    You enter a contract to rent an apartment for one year with a resolutory period. The contract starts immediately, but upon the one-year anniversary of the contract, the tenancy agreement automatically ends. You don't need to provide further notice to vacate.

    Why Use Resolutory Periods?

    • Predictability: Resolutory periods create certainty for both parties about the contract's duration.
    • Self-Executing: The contract terminates upon reaching the period, saving the parties from having to take additional legal action to end the agreement.
    • Flexibility: In specific situations where an automatic end to a contract is beneficial, resolutory periods can be a valuable tool.

    Note: Resolutory periods are different from "resolutory conditions." A resolutory condition is an event that, if it happens, will terminate the contract. A resolutory period is a specific duration.

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Location: Davao City, Davao del Sur, Philippines

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