Conditions Precedent

In one sentence

An event that must happen before a party's obligation under a contract kicks in.

Plain English

A condition precedent is something that has to occur before a party is required to perform their part of the contract. Think of it as a gate that must open before someone's duty begins. For example, if you buy a house "contingent on inspection," the inspection is a condition precedent—the seller doesn't have to close the deal until the inspection happens and you're satisfied. If the condition doesn't occur, the party waiting for it can usually cancel without penalty.

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Example

Sarah agrees to buy a car from a dealer, but only if she can get financing. The financing approval is a condition precedent. If the bank denies her loan, the condition fails, and Sarah can back out of the deal without penalty.

Used in a sentence

“The contract stated that payment was a condition precedent to the seller's obligation to deliver the goods.”

Related terms

Conditions Subsequent

An event that, if it happens, ends a party's obligation or allows them to cancel the contract.

Materiality

Whether a fact or breach is important enough to affect the contract's core purpose or value.

Implied Covenant of Good Faith and Fair Dealing

An unwritten promise in every contract that parties will act honestly and fairly toward each other.

Discharge

The release of a party from their contractual obligations.

Excuse for Nonperformance

A legal reason why someone doesn't have to perform their contract obligations.

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.