Lapse is the termination of a right, interest, duty or obligation as a result of the passage of time, or failure of a condition, or a change in circumstance.
- Lapse because of the passage of time
- An example of lapse because of the passage of time is that a party fails to accept an offer in time. This can lead to the complete void of the offer.
- Lapse because of failure of a condition
- For example, if a contract requires a party to perform certain action, and the party fails to perform, this party’s right lapses.
- Lapse because of change of circumstances
This type of lapse happens very often in property law, especially in testacy law. If a specific devise is written into a will, and the devisee dies before the testator, the devise lapses. To counter this effect, many jurisdictions in the United States has “anti-lapse statute”. This means the even if the circumstances changed, for example the devisee dies before the testator, the devise will still go to this devisee upon the testator’s death. However, anti-lapse statute can be prevented by simply stating that “the anti-lapse statute does not apply” in the will.
[Last updated in July of 2020 by the Wex Definitions Team]