Legal Definitions - casual condition

A casual condition in a contract refers to a future, uncertain event that must occur before a party's obligation becomes due, and whose fulfillment depends entirely on chance or the actions of a third party, rather than on the will or efforts of the contracting parties themselves. It is a condition outside the direct control of those who made the agreement.

Here are some examples illustrating a casual condition:

• Example 1: Real Estate Development

  A property developer agrees to purchase a parcel of land from a private owner, but the contract includes a clause stating that the sale is contingent upon the local planning commission approving the developer's application for a zoning change from residential to commercial within nine months. If the planning commission denies the application, the developer is not obligated to buy the land.

  Explanation: The approval of the zoning change by the planning commission is a casual condition. Neither the developer nor the landowner can directly control the commission's decision; it depends on the independent judgment of a third party (the planning commission) and their assessment of local regulations and community impact. The outcome is outside the direct control of the contracting parties.

• Example 2: Performance Bonus

  A company offers its sales team a special bonus payment if the national consumer confidence index, as reported by a specific economic research firm, rises above a certain threshold by the end of the quarter. If the index does not reach that level, the bonus is not paid.

  Explanation: The increase in the national consumer confidence index is a casual condition. The sales team and the company cannot directly influence or control this broad economic indicator; it depends on numerous external market forces, public sentiment, and government policies, making it largely a matter of chance from the perspective of the contract.

• Example 3: Art Commission

  An artist agrees to paint a large mural for a client, but the final payment for the commission is conditional upon the client securing a grant from a specific arts foundation to cover the project's costs. If the grant application is unsuccessful, the client is not obligated to make the final payment.

  Explanation: The approval of the grant by the arts foundation is a casual condition. While the client can submit a strong application, they cannot force the foundation (a third party) to award the grant. The foundation's decision is independent and outside the direct control of either the artist or the client, making it a condition based on a third party's will.