Condition precedent and condition subsequent are two legal concepts that are often used in the context of contracts and conditional transfers. While both types of conditions affect the enforceability of a contract or transfer, they differ in terms of when they apply and the consequences that follow if they are not fulfilled.
Condition Precedent
A condition precedent is a condition that must be fulfilled before a contract or transfer becomes effective.
In other words, the condition must be met before the parties are bound to perform their obligations. If the condition is not fulfilled, the contract or transfer is considered void or unenforceable.
Example: a contract for the sale of a house may be conditional on the buyer obtaining financing from a lender. In this case, the condition precedent is the buyer obtaining financing, and until this condition is met, the contract is not binding on either party.
Condition Subsequent
A condition subsequent is a condition that, if it occurs, terminates or modifies an existing contract or transfer.
In other words, the contract or transfer is effective until the condition is met, at which point it may be terminated or modified.
Example: a lease agreement may provide that the lease will terminate if the tenant fails to pay rent for two consecutive months. In this case, the condition subsequent is the failure to pay rent, and if this condition is met, the lease may be terminated.
| CONDITION PRECEDENT | CONDITION SUBSEQUENT |
|---|---|
| Must be fulfilled before a contract or transfer becomes effective. | Applies after a contract or transfer has become effective. |
| Failure to fulfill results in the contract or transfer being void or unenforceable. | May terminate or modify an existing contract or transfer. |
| Usually the responsibility of one party to fulfill. | May be the responsibility of either party or outside of their control. |
