Short answer. Yes, this is valid. Article 1182 of the Civil Code distinguishes between conditions that depend on the debtor's own will — which make the obligation void — and conditions that depend on chance or the will of a third person, which are perfectly permissible and take effect under the Code's rules.
What the law says
If it depends upon chance or upon the will of a third person, the obligation shall take effect in conformity with the provisions of this Code.
Civil Code, Article 1182 — Potestative, Casual, and Mixed Conditions. Read the full provision →
Three types of conditions, three different outcomes
Article 1182 draws a sharp line based on whose will controls whether the condition happens. A condition that depends solely on the debtor's own will is called a potestative condition on the debtor's side, and it makes the obligation void — a debtor who can decide at will whether to be bound is not really bound at all. By contrast, a condition depending on chance (a casual condition) or on the will of a third person (a mixed or casual condition) does not carry this defect. The obligation is valid and takes effect once the condition occurs or fails.
Why third-party conditions are permitted
When a condition turns on what a third party decides, neither debtor nor creditor controls the outcome. This creates genuine uncertainty — the hallmark of a true conditional obligation — without giving one side an unfair escape hatch. For example, a promise to pay upon a buyer's approval by a bank, upon a landlord's consent to assignment, or upon a government agency issuing a permit all depend on a third party's decision. None of these are void. The obligation stands, suspended until the third party acts or the time for them to act expires.
What happens once the condition is resolved
Once the third party makes the decision that the condition requires, the obligation's fate is determined. If the condition is fulfilled — the third party does what was required — the obligation takes effect and must be performed. If the third party refuses or acts contrary to the condition, the obligation does not arise, unless the parties agreed that preventing fulfillment through bad faith revives liability. The timing and manner of performance are governed by whatever the parties agreed and by the general rules on obligations under the Civil Code.
Watch for disguised potestative conditions
Not every condition mentioning a third party is genuinely third-party dependent. If the debtor effectively controls the third party — for instance, through ownership, direction, or a pre-arrangement — a court may treat the condition as potestative in disguise and strike down the obligation. Similarly, if the condition is framed as depending on a third party but the debtor has the practical ability to make it happen or prevent it, the third-party label may not save the arrangement. The substance, not just the wording, determines which category applies.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Rolando T. Catungal, et al. vs. Angel S. Rodriguez, G.R. No. 146839, March 23, 2011 — read the decision on LawPhil →
- Pilipino Telephone Corporation vs. Radiomarine Network, Inc, G.R. No. 152092, August 4, 2010 — read the decision on LawPhil →
- Fidela Del Castillo Vda. De Mistica vs. Spouses Bernardino Naguiat, et al, G.R. No. 137909, December 11, 2003 — read the decision on LawPhil →
- Roberto L. Yupangco and Regina y De Ocampo vs. O.J. Development and Trading Corporation, G.R. No. 242074, November 10, 2021 — read the decision on LawPhil →