Legal Definitions - condition subsequent

Term: condition subsequent

A condition subsequent is an event or situation that, if it occurs after an agreement has been made or an ownership interest has been granted, will terminate an existing obligation or right. Essentially, it's a trigger that can end something that is already in effect. Unlike conditions that must happen before something begins (known as condition precedents), a condition subsequent takes effect to dissolve or end an existing duty or ownership.

• Example 1 (Employment Contract):

  A software engineer signs an employment contract with a defense contractor. The contract includes a clause stating that the engineer's employment will be immediately terminated if they fail to maintain their top-secret security clearance. The engineer begins working and holds the clearance.

  Explanation: The engineer's employment and the company's obligation to pay them already exist. The failure to maintain the security clearance is the condition subsequent. If this event occurs, it will terminate the employment contract and the company's obligation to the engineer.

• Example 2 (Commercial Lease Agreement):

  A restaurant leases a space in a shopping mall for a five-year term. The lease agreement specifies that if the mall's overall occupancy rate drops below 60% for a continuous period of twelve months, the restaurant has the option to terminate its lease early without penalty.

  Explanation: The restaurant's obligation to pay rent and occupy the space is already in effect. The condition subsequent is the sustained drop in the mall's occupancy rate. If this event happens, it gives the restaurant the right to end its existing lease obligations.

• Example 3 (Property Grant):

  A philanthropist donates a large tract of land to a local conservancy group "on the condition that the land is perpetually maintained as a public nature preserve." The deed further states that if the conservancy ever attempts to sell or develop the land for commercial purposes, the philanthropist's heirs retain the right to reclaim ownership of the property.

  Explanation: The conservancy group already owns the land. The condition subsequent is the potential future event of the conservancy selling or developing the land commercially. If this event occurs, it would terminate the conservancy's ownership, giving the philanthropist's heirs the right to repossess the property.