Condition Precedent

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A condition precedent is a condition or an event that must occur before a right, claim, duty, or interests arises. Compare condition subsequent.

In a contract, a condition precedent is an event that must occur before the parties are obligated to perform. For example, an insurance contract may require the insurer to pay to rebuild the customer’s home if it is destroyed by fire during the policy period. The fire is a condition precedent. The fire must occur before the insurer is obligated to pay.

Courts prefer to interpret a clause in a contract as a promise rather than a condition precedent to avoid forfeiture. The Second Restatement of Contracts has dropped the term “condition precedent” and simply refers to it as “condition.”

In property, a condition precedent is an event at which the vesting of a property interest occurs. If the condition does not occur before a specified time, the condition fails, and the property interest does not vest.

[Last updated in May of 2020 by the Wex Definitions Team]