conditional contract

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conditional contract

A conditional contract is signed with a clause that depends on a future event.

Definition
  1. Noun:
    • A contract whose performance depends on a fact or event that affects legal relations: A conditional contract is a legal agreement where the duties or obligations of the parties are not absolute but are triggered or extinguished based on the occurrence or non-occurrence of a specified future event. This event must be uncertain and must affect the legal relationship established by the contract.
Usage
  • General Use: Used primarily in legal, business, and formal contexts to describe agreements that are not immediately binding in full.
  • Key Concept: The core idea is contingency. The contract's enforceability or the requirement to perform is contingent upon a condition.
Examples
  • Noun:
    • The sale of the house was based on a conditional contract that required the buyer to secure financing within 30 days.
    • They signed a conditional contract for the merger, pending regulatory approval from the government.
Advanced Usage
  • "Condition precedent": A condition that must be fulfilled before a party's duty to perform arises under the contract.
    • The funding was subject to a condition precedent of the company providing a satisfactory audit report.
  • "Condition subsequent": A condition that, if it occurs, terminates an existing duty or obligation under the contract.
    • The license agreement contained a condition subsequent that would terminate the rights if the product failed safety tests.
Variants and Related Words
  • Condition (n): A future and uncertain event on which the existence or performance of an obligation depends.
  • Contingent contract (n): A term often used synonymously with conditional contract, emphasizing the contingent nature of the obligations.
  • Executory contract (n): A contract in which one or more parties have not yet fulfilled their obligations.
Synonyms
  • Contingent agreement
  • Provisional contract
Related Phrases
  • Subject to [condition]: A phrase used in contract language to introduce a condition.
    • The offer is subject to a satisfactory home inspection.
  • Dependent upon: Relying on something else for its existence or occurrence.
    • The entire deal is dependent upon shareholder approval.
conditional contract

A conditional contract is signed with a clause that depends on a future event.

Noun
  1. a contract whose performance depends on a fact or event that affects legal relations