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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.

Common in these contract types

ServicesFreelanceConsultingPartnershipLicensing

Frequently asked questions about condition precedent

A condition precedent must happen before an obligation begins. A condition subsequent, if it happens, ends an obligation that already exists. Example: 'Work starts after the deposit is received' (precedent). 'This license terminates if you're acquired by a competitor' (subsequent). One activates obligations; the other deactivates them.

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This content is for informational purposes only and does not constitute legal advice. For contracts with significant financial or legal implications, review by a qualified attorney is recommended.