Legal Definitions - condition precedent

A condition precedent refers to an event or action that must occur or be performed before a specific legal right, claim, duty, or interest comes into existence or becomes legally binding. It acts as a prerequisite; until this condition is met, the subsequent obligation or right does not arise.

In the context of contracts, a condition precedent is an event that must take place before one or both parties are required to fulfill their contractual obligations. If the condition does not occur, the parties may not be bound to perform.

In property law, a condition precedent is an event that must happen before a person gains a full and legally recognized ownership interest in property. If the condition is not met, the property interest may never transfer or "vest."

• Example 1: Real Estate Purchase Agreement

  Imagine a buyer agrees to purchase a house, but the contract includes a clause stating that the sale is "contingent upon a satisfactory home inspection."

  This "satisfactory home inspection" is the condition precedent. The buyer's legal obligation to complete the purchase does not become binding until the inspection has been performed and deemed satisfactory. If the inspection reveals major issues that the buyer finds unacceptable, the condition is not met, and the buyer is typically not obligated to proceed with the purchase.

• Example 2: Employment Offer

  A company extends a job offer to a candidate, but the offer letter specifies that employment is "contingent upon the successful completion of a background check and drug screening."

  The "successful completion of a background check and drug screening" constitutes the condition precedent. The company's duty to hire the candidate, and the candidate's right to employment, only arise once these checks have been completed to the company's satisfaction. If the candidate fails either check, the condition precedent is not met, and the job offer can be withdrawn without the company incurring an obligation to employ.

• Example 3: Inheritance in a Will

  A will specifies that a grandchild will inherit a specific investment portfolio "upon reaching the age of 25."

  "Reaching the age of 25" is the condition precedent. The grandchild does not have a vested legal right to the investment portfolio until their 25th birthday. If the grandchild passes away before reaching 25, the condition is not met, and the inheritance would typically pass to an alternate beneficiary as specified in the will, or according to other legal rules.