Condition Precedent Contract Law Example

A condition precedent is when something is to happen or a situation must arise before or before a party has a performance obligation. SECTION 2.Previous. As a prerequisite for the effectiveness of this change number two, buyer, seller and Ocwen Loan Servicing, LLC as a service provider must have a letter of service instruction in the form and substance that is reasonably acceptable to buyer. 11.2 Termination for non-compliance with the conditions precedent. If, for any reason (including non-compliance with the conditions of Section 2.1 prior to the expiration of the conditional period), the condition precedent is not fully met in the conditional period, this Agreement will automatically terminate in its entirety on the day following the last day of the term precedent. Retirement conditions may also include conditions precedent. Pensions are usually paid only after an employee has completed a certain number of years of work in good standing in a company. If an employee is fired from their position before reaching the set date, they risk losing some, if not all, of their pension benefits. These provisions also have two important features. First, a party must fulfill its contractual obligations before asking the other party for the same. Second, a particular event must take place before a party is granted a right of performance or has the opportunity to sue the other party for damages.

SECTION 2. Condition precedent. As a condition of entry into force of this amendment number three, Seller must have paid Buyer (i) the May 2014 Renewal Obligation Fee and (ii) the first payment of the June 2014 Renewal Obligation Fee (each as defined in the Price Cover Letter). Real estate contracts almost always contain a condition precedent. For example, in a mortgage contract, there may be a condition precedent related to the sale of a home. This provision could stipulate that the condition of the house must be assessed in order to determine the value of the property. After this review, the lender and the buyer must agree on the valuation and appraisal before the mortgage agreement becomes binding. A good way to understand a condition precedent is an event that triggers something else. For example, if you respect your part of the contract, the other party must fulfill its responsibilities. If they are included in a contract, a condition precedent is a requirement that must be met before the parties are to fulfill their obligations.

A condition precedent is a legal term that describes a condition or event that must occur before the entry into force of a particular contract or obligations are expected of either party. Precedents can also be used in deeds on real estate. If these provisions are contained in an act, an event or act should take place before the title is transferred to another person. Imagine a ship arriving at a port and you agree to buy the cargo and unload it from the ship. You may include a condition precedent in this Agreement that when your daughter marries, ownership of the cargo you purchased will be transferred to her. Create document automations that allow you, your employees and customers to automatically fill out contract templates. Precedents are also prevalent in wills and trusts, where the transfer of money or property takes place only after certain conditions are met, such as when an heir is married or has reached a certain age. For example, let`s say you`re a teenager named in a parent`s will.

Since you are young, your parent may add a condition precedent to their will that you must complete a university degree before receiving your inheritance. Other conditions precedent that can be added to a will or trust include the requirement that the heir be of a certain age before receiving or marrying his or her inheritance before the trust is executed. 3. Effectiveness of this amendment; Condition precedent. The provisions of this amendment shall be deemed to have entered into force from the date of this amendment, but such effectiveness is expressly subject to the receipt by the Agents of consideration for such change, which shall be executed and delivered by duly authorized officials of the Borrower, the other creditor Party, the required lenders and the Agent. Conditions are facts or situations that must (or do not occur) for one or both parties to have an obligation to perform a contract. A condition precedent is a condition or event that must occur before a right, claim, duty or interest occurs. Next, compare the condition. You can define the condition precedent as a contractual clause. However, for a condition precedent to be valid, it must meet several important requirements, so it is a good idea to study this problem in more detail. 3 minutes of reading time Virtually any type of contract can contain a condition precedent.

For example, it can be very common to include precedents in trusts and wills.