Conditions Step by Step

 

CONDITIONS STEP BY  STEP Condition Note: Note: Interpretation/construction rules apply. 1) Determine NATURE OF TERM a) Promise: Promise: An undertaking to act or refrain from acting in a specified way at some future time. Condition:: An event that that is not certain to occur. b) Condition c) Promissory Condition: Condition: An event that is not certain certain to occur, but one party ha has s promised will occur.

2) Determine TYPE OF CONDITION a) Express: Express: Language in in K directly directly creates creates condition. condition. i.e. “On condition that”, “Provided “Provided that”, or some other very obvious means of conveying that the K is conditional somehow somehow.. present, but contextual evidence evidence supports understandin understanding g b) Implied in Fact: Fact: No language present, that condition was meant by the parties. c) Constructive Constructive:: No language/context language/context supports condition, condition, but implied at law law if the circumstances circumstanc es and nature of the K compel the conclusion that the condition should exist as a matter of policy, or that if the parties had addressed the issue, they reasonably would have intended it to be part of their K.

3) Determine SEQUENCE OF CONDITION (no specified order = interpretation/construction) fulfillment must precede precede the performanc performance e contingent upon it. a) Precedent: Precedent: Condition’s fulfillment i.e. Zoning board outcome either creates Buyer’s duty to perform or duty does not arise. and Seller b) Concurrent: Concurrent : Conditions fulfilled at the same time. i.e. Buyer paying and conveying title. c) Subsequent: Subsequent : Condition occurs after performance. performance. i.e. Zoning Zoning board board outcome after K is signed either keeps Buyer’s duty to perform in effect or discharges the duty that arose at the K.

4) Determine CONDITION’S EFFECT ON K  Compliance:: Apply express/implied express/implied in fact condition condition terms strictly, even even if result a) Strict Compliance is harsh. construed condition condition terms reasonably. b) Substantive Compliance: Compliance: Apply construed