Legal Definitions - dependent condition

In legal terms, a condition refers to an event or action that must occur or be performed before a party is required to fulfill their part of an agreement or contract. It's a prerequisite that affects the obligations of the parties involved.

A dependent condition is a specific type of condition where one party's obligation to perform their part of an agreement is entirely reliant upon the other party first fulfilling their own condition. Essentially, Party B's duty to act is dependent on Party A having already completed a specified action or event. If Party A fails to meet their condition, Party B is not obligated to perform their subsequent duty.

Here are some examples to illustrate this concept:

• Real Estate Purchase Agreement:

  Imagine a contract for buying a house where the buyer agrees to purchase the property, but only after the seller completes a specified set of repairs to the foundation. The buyer's obligation to proceed with the purchase (e.g., closing the deal and transferring funds) is a dependent condition. It is entirely dependent on the seller first completing the foundation repairs. If the seller fails to make the repairs as agreed, the buyer is typically no longer obligated to buy the house.

• Construction Project Contract:

  Consider a general contractor hiring a subcontractor to install all the plumbing in a new building. The contract states that the general contractor will make the final payment to the subcontractor only after the city inspector has officially approved all the plumbing work. The general contractor's obligation to make the final payment is a dependent condition. It depends on the successful completion and official approval of the plumbing work. If the city inspector fails to approve the work, the general contractor is not obligated to make that final payment until the issues are resolved and approval is granted.

• Business Partnership Agreement:

  Two business partners agree that Partner A will invest an additional $50,000 into the company, but only once Partner B successfully secures a new, major client contract worth over $1 million. Partner A's obligation to invest the additional capital is a dependent condition. It is contingent upon Partner B first achieving the specific milestone of securing the large client contract. If Partner B fails to secure such a contract, Partner A is not obligated to make the additional investment.