A condition precedent is a specific requirement that must be fulfilled before a contract becomes effective or before one party is obligated to perform their duties under an existing contract. Essentially, it acts as a trigger that activates the obligations of the parties involved in the agreement.
Condition precedents are commonly used in various areas of law, including contract law, real estate transactions, and business agreements. They ensure that certain conditions are met before the contract is enforceable. For example, in real estate, a buyer's obligation to purchase a property may depend on securing financing. Users can often manage these conditions through legal forms available from resources like US Legal Forms, which provide templates drafted by qualified attorneys.
Here are a couple of examples of abatement:
Example 1: A seller agrees to sell their house to a buyer, but the sale is contingent upon the buyer obtaining a mortgage. If the buyer does not secure financing, the seller is not obligated to complete the sale.
Example 2: (hypothetical example) A company agrees to hire a candidate, but the offer is contingent upon the candidate passing a background check. If the candidate fails the check, the company can withdraw the job offer.
Examples of state differences (not exhaustive):
| State | Condition Precedent Variations |
|---|---|
| California | Conditions must be explicitly stated in the contract. |
| New York | Conditions may be implied based on the contract's context. |
| Texas | Conditions can include both express and implied terms. |
This is not a complete list. State laws vary and users should consult local rules for specific guidance.
| Term | Definition | Difference |
|---|---|---|
| Condition Subsequent | A condition that, if it occurs, can terminate a party's obligations under a contract. | Condition precedent activates a contract; condition subsequent can end it. |
| Contingency | A condition that must be met for a contract to be valid. | Contingencies are often broader and may not always be legally binding. |
If you find yourself dealing with a condition precedent, consider the following steps:
Browse our library of 85,000+ state-specific legal templates.
A common example is a buyer needing to secure financing before purchasing a home.