What is an example of a condition precedent?
In a contract, a condition precedent is an event that must occur before the parties are obligated to perform. For example, an insurance contract may require the insurer to pay to rebuild the customer’s home if it is destroyed by fire during the policy period. The fire is a condition precedent.
What is condition precedent clause?
A clause is a true condition precedent if the satisfaction of the condition within the clause is dependent on a future uncertain event, the happening of which depends entirely on the will of a third party.
What is the difference between a condition and a condition precedent?
A condition precedent always comes before the creation of an interest. A condition subsequent always follows the vesting of an interest which is already complete.
What is the legal effect of a condition precedent?
A “condition precedent” is one that is to be performed before the agreement becomes effective, and which calls for the happening of some event or the performance of some act after the terms of the contract have been arrested on, before the contract shall be binding on the parties.
What happen if an express It has not been fulfilled?
If the first party does not uphold their end of the agreement, the second party cannot complete theirs, and the contract may be considered null and void, or under breach of contract, per the express conditions.
Is payment a condition precedent?
Subcontracts may state that the subcontractor will be paid when the prime contractor is paid, or that the subcontractor will be paid only if the prime contractor is paid, and still others state that payment of the prime contractor is a condition precedent to the obligation of the prime to pay the subcontractor.
What is an example of a condition precedent in?
A condition precedent is also common in estate planning, and in establishing trusts . For example, a parent can set up a trust for his her her child, but make receipt of the money in the trust based on the child fulfilling a condition. This condition is referred to as the condition precedent on inheritance.
What is the opposite of “condition precedent”?
Condition Subsequent. A condition subsequent is the opposite of a condition precedent, as it is a condition that, if it occurs, terminates the contract or agreement, or brings to an end a party’s duties.
What is the plural of condition precedent?
condition precedent (plural conditions precedent) (law) a condition imposed on an agreement that must be satisfied before property is transferred between parties. (law) a condition depending upon an uncertain event which must be fulfilled before an obligation arises or a legal transaction takes effect.