Non-standard situations require the parties to the contract to take the same approach. In some cases, in order to sell or produce something, it will be necessary to conclude a deal with a suspensive condition, that is, to make certain circumstances dependent on the specific situation.
Definition of a term in law
A clear definition of the term is given in the Civil Code. A suspensive condition is a specific situation that arises under certain circumstances that are agreed upon in the contract by the parties. A circumstance may be not only law, but also obligations. After the case provided for in the transaction occurs, the transaction shall be deemed completed.
A suspensive condition may provide for both the lawful behavior of one of the parties, and unlawful. For example, if one of the parties to the contract violates the current legislation, customs or tax, then the other party has the right to unilaterally refuse the transaction.
The condition may be random or testable. In the first case, it is the actions of third parties. In other words, these are external circumstances on which both sides depend. A test is a condition that completely depends on the actions of one of the parties to the transaction. The agreement may also contain a mixed condition, when rights arise not only in the case of actions of one of the parties, but also depends on the actions of state bodies or forces of nature.
Signs
Suspending conditions have a number of signs, more specifically:
- the transaction determines the time of occurrence of a particular case;
- the contract describes some circumstances;
- the parties are not sure that events will occur that will lead to the occurrence of the agreed conditions;
- the occurrence of the specified situations is possible, but not necessary.
The timing
When concluding a contract, the fact of the occurrence of a certain event should not have a 100% guarantee. Otherwise, such a condition will be considered as the need to comply with a certain period. In fact, the suspensive condition should only provide for the possibility of such an event.
It is important to know that the deadline for fulfilling obligations may depend on certain actions that one of the parties must take.
Examples
One striking example is a rent contract. In this case, the execution of the suspensive condition will be the death of the renter or the full payment of all payments by the payer of rent, in the amount of the purchase price.
An installment of payments may also act under a suspensive condition. In fact, rights arise only after all payments are made for the delivered goods or the services performed.
If we talk about a mortgage agreement, then, despite the registration of such a transaction and the borrower receiving all rights to real estate, until the debt is paid to the bank, the property will be encumbered. In this case, the buyer of the property will receive his ownership right only after the full repayment of the debt, and until that moment, he is not entitled to sell or carry out other legally significant actions with real estate.
A bank guarantee is to conclude a contract under a suspensive condition. Thanks to an agreement with a financial institution, legal entities get the opportunity to work with a deferred payment. In most cases, a deal with state-owned enterprises or institutions is possible only with a guarantee bank. In this case, the date of the onset of the deferred condition is the failure to fulfill its obligations by the enterprise for which the bank vouched. Although there is no 100% guarantee that this date will come. If the company has not paid off or has not fulfilled other obligations, the bank makes payments to the beneficiary, and the applicant receives debtor status.
Suspension conditions may also be provided for in the ordinary contract of sale of housing. For example, such documentation can come into force only after full settlements between the parties are carried out, about which the corresponding notarization on the document is affixed. Simply put, at the time of signing the securities a partial payment is made, but the buyer will be able to register his rights only after full payment of the cost of housing. As a rule, such agreements provide for a clear debt repayment date.
Separately, it should be noted gift agreement. Despite the fact that such transactions are gratuitous, the donor does not exclude the establishment of certain conditions for receiving the gift. For example, one of the parties promised to transfer the vehicle to the recipient 2 years after the transaction, but only if the child does not appear in his family. Then the gift transfer is delayed for another 2 years. In fact, it is impossible to plan a child’s birth unequivocally, and therefore the condition is suspensive.
Finally
It should be remembered that not only a certain event, but also volitional actions can act as a suspensive condition. Addiction can be made not only the actions of the parties to the transaction, but also third parties.