Short answer. It depends on what the parties agreed to buy and sell. A sale of a chance that the thing will exist is valid even if nothing materializes — the buyer accepted the risk. But the sale of a vain hope or expectancy is void from the start under Article 1461 of the Civil Code.
What the law says
The efficacy of the sale of a mere hope or expectancy is deemed subject to the condition that the thing will come into existence. The sale of a vain hope or expectancy is void.
Civil Code, Article 1461 — Sale of Things With Potential Existence. Read the full provision →
Three types of future-thing sales under Article 1461
Article 1461 identifies three situations. First, things having a potential existence — such as the harvest of a crop not yet planted, or goods not yet manufactured — may validly be the object of a sale. Second, a sale of a mere hope or expectancy is treated as conditioned on the thing actually coming into existence; if it does not, the sale fails but was not void at the outset. Third, a sale of a vain hope or expectancy — one that was never realistically possible — is void, not merely unenforceable.
Selling a hope versus selling a vain hope
The line between a hope and a vain hope matters. A sale of a hope or expectancy means the parties genuinely believe there is a real chance that the thing will exist — the risk that it may not is what makes it a hope rather than a present sale. If the thing fails to materialize, the sale simply does not produce the expected result. A vain hope, by contrast, is one that was empty from the beginning — no real possibility ever existed. That is not a sale of a chance; it is a fiction, and Article 1461 declares it void.
How to tell which category applies to your situation
Whether a sale was of a genuine chance or of a vain hope depends on the facts at the time the contract was made, not the outcome. If the parties entered the agreement believing in good faith that the thing could come into existence — based on something real, not manufactured — the sale was of a hope or expectancy. If the seller knew, or should have known, that no such thing could ever arise, and the buyer was misled, the sale was of a vain hope. The difference may determine whether you have a contract that simply failed or one that was void from the moment it was signed.
Practical examples
A fisherman who sells next season's catch before it is taken is selling something with potential existence — the law permits it, and the buyer takes the risk of a poor season. A person who sells the proceeds of a lawsuit that no competent court would ever allow, or who sells rights in a property that the seller has no basis for claiming, may be selling a vain hope. A pre-selling developer who sells units in a condominium not yet built is selling something with potential existence, not a vain hope — provided the project is genuinely planned and executable. Context and the seller's knowledge at the time of the contract are what matter.
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.
- Spouses Mariano P. Marasigan and Josefina Leal vs. Chevron Phils., Inc., et al, G.R. No. 184015, February 8, 2012 — read the decision on LawPhil →
- Fidela Mananzala vs. Court of Appeals, et al, G.R. No. 115101, March 2, 1998 — read the decision on LawPhil →