Condition Precedent

In one sentence

An event that must happen before a party's obligation to perform becomes due.

Plain English

A condition precedent is something that must occur first before a party has to perform their contract duties. If the condition doesn't happen, the obligation never kicks in. For example, a condition might be "if the house inspection passes" or "once financing is approved." If the condition fails, neither party owes performance.

Ad slot

Example

A buyer agrees to purchase a house "contingent on a satisfactory home inspection." The home inspection is a condition precedent. If the inspection reveals major problems and the buyer exercises the right to cancel, the buyer owes nothing and the seller can't force the sale. The condition precedent wasn't satisfied, so the buyer's payment obligation never arose.

Used in a sentence

“The contract's condition precedent required board approval before either party had to perform.”

Related terms

Condition Subsequent

An event that, if it occurs, ends or excuses performance under a contract.

Concurrent Conditions

Contract obligations that must be performed at the same time by both parties.

Implied Conditions

Conditions that courts infer must be met even though the parties did not state them.

Material Breach

A significant failure to perform a contract obligation that defeats its core purpose.

Substantial Performance

Completing most of a contract obligation in good faith, even if not perfectly.

Offer

A proposal to enter into a binding agreement on specific terms.

Acceptance

Agreeing to the exact terms of an offer, creating a binding contract.

Consideration

Something of value exchanged by each party to make a contract binding.

This page is a plain-English reference and is not legal advice. Laws vary by jurisdiction and change over time. For specific situations consult a licensed attorney.