Contract Glossary

Condition Precedent

Definition

An event or action that must happen before a contract obligation kicks in. Until the condition is met, the party doesn't have to perform. Think of it as a trigger, no trigger, no obligation.

In Practice

Your contract says payment is due 'upon successful completion of the prototype.' That's a condition precedent, the client doesn't have to pay until you deliver a working prototype. Conditions precedent are everywhere: funding contingencies in real estate, board approvals in corporate deals, and regulatory approvals in licensing agreements.