24 Jul RESOLUTIVE CONDITIONS-SUSPENSIVE CONDITIONS
The contracting parties to an agreement are free to make their agreement conditional upon the occurrence of a future event or the action of a third party. This is achieved by including a condition, i.e. a specific term or requirement.
In order for the condition (term) to be valid, the following must be met:
- The term must originate in an agreement of the parties.
- It must relate to an event that is uncertain (not simply the lapse of a certain period of time, because then the event is certain).
- The content of the condition must be clear, not contradictory, not illegal and not referring to something impossible (Art. 208 of Greek Civil Code).
- Specific form is required only if it is contained in an agreement for which a form is required.
Moreover, the way the parties link their agreement with the occurrence of the event has consequences as to whether the agreement will begin to develop its effects immediately or only after the occurrence of the event, i.e. at the stage when the condition is fulfilled.
In particular, a distinction should be made between suspensive condition and resolutive condition.
As regards the suspensive condition (Art. 201 of Greek Civil Code):
- it suspends the effectiveness of the contract until the future event upon which it depends on occurs.
- the agreement will only become effective when and if the future event on which it depends on takes place.
As regards the resolutive condition (Art. 202 of Greek Civil Code):
- it extinguishes the effectiveness of the contract when and if the future event on which it depends on occurs.
- The agreement takes effect but comes to an end if the event occurs.
As soon as a condition is validly agreed (either suspensive or resolutive), the following situation arises:
- The obligor upon condition is obliged to refrain from any action that could culpably damage or prejudice the conditional right, otherwise they will be obliged to pay compensation (Art. 204 Greek Civil Code).
- If the obligor upon condition, contrary to good faith, prevents the fulfilment of the condition, the condition will be deemed to have been fulfilled and the agreement will take effect irrespective of the prevention (Art. 207 Greek Civil Code).
- A transfer of a conditional right that takes place while the condition is pending is void if it prejudices or impairs the result that depends upon the condition (Art. 206 Greek Civil Code).
In the case of purchase and sale agreement of real estate by credit (e.g. payment via bank transfer), there is usually an additional agreement (resolutive condition) that if the buyer does not pay the price within the stipulated period, the ownership of the real estate will return to the seller, in which case the procedure to be followed is the following:
(i) If the buyer makes full payment of the price, a notarial deed of payment and removal of the condition will have to be drawn up, followed by the recording of the deed in the transcription books.
(ii) If the payment of the price does not take place, a notarial deed of non-payment of the price and fulfilment of the condition must be drawn up, followed by the recording of the deed in the transcription books.
The above applies mutatis mutandis in the case of a sale of property subject to a suspensive condition, i.e. where the seller retains ownership of the property until the buyer has paid the full price.
Finally, it should be noted that if the transfer of ownership of the property is cancelled either due to the removal of the suspensive condition or due to the fulfilment of the resolutive condition, half of the tax paid is returned (Article 16 par.2 of Law No 1587/1950).
 Literature sources:
- A. Georgiades, General Principles of Civil Law, Ant. N. Sakkoulas, Athens-Komotini, 2007, pp. 449 ff.
- K. Pantelidou, General Principles of Civil Law, Sakkoulas, Athens-Thessaloniki, 2016, pp. 517 ff.