Legal Definitions - mixed condition

A mixed condition in a contract refers to a situation where the fulfillment of a contractual obligation or the effectiveness of an agreement depends on two types of events:

• An event that is partly within the control or depends on the will of one of the parties involved in the contract.
• An event that is partly outside the control of that party, often depending on chance or the actions of a third party.

Essentially, it's a condition that isn't purely based on an external, random event (like the weather) nor purely on the whim of one party, but rather a combination of a party's action or decision and an external factor.

Here are some examples illustrating a mixed condition:

• Example 1: Real Estate Purchase

  A buyer signs a contract to purchase a house, but the agreement includes a clause stating that the purchase is conditional "if the buyer obtains a mortgage loan for at least 80% of the purchase price from a reputable lender and if the property appraises for at least the agreed-upon purchase price."

  This is a mixed condition because:

  • The buyer's ability to obtain a mortgage depends partly on their own efforts (applying for loans, providing financial documents) and partly on external factors (the lender's approval criteria, the buyer's credit history, current interest rates, and the overall housing market).
  • The property appraisal depends partly on the buyer's action of commissioning an appraisal and partly on the independent appraiser's professional judgment and market conditions, which are external to the buyer's sole control.

• Example 2: Business Expansion

  A company agrees to open a new branch office in a different city "if its internal market research team confirms sufficient local demand and if the city council grants the necessary zoning permits within six months."

  This illustrates a mixed condition because:

  • The market research team's confirmation of demand relies on the company's internal efforts and decisions (their will to conduct the research and interpret findings).
  • The granting of zoning permits depends on the actions and decisions of an external third party (the city council) and whether the proposed branch meets local regulations, which are outside the company's direct control.

• Example 3: Performance Bonus

  An employee is offered a substantial year-end bonus "if they achieve 120% of their individual sales target for the year and if the company's overall net profit increases by at least 10% compared to the previous fiscal year."

  This is a mixed condition because:

  • Achieving 120% of the individual sales target depends heavily on the employee's effort, skill, and strategic decisions (their will and actions).
  • The company's overall net profit increasing by 10% depends on many factors beyond that individual employee's control, such as the performance of other departments, broader economic conditions, management decisions, and market competition.