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What Is Condition Precedent?

Some court cases often set a milestone or an example for other court cases to follow. This is because such cases are often necessary to judge based on the circumstances rather than the actual letter of the law. When this happens, the court case is said to be a legal precedent, or a legal ruling that can be referenced or looked to. Other precedents exist in reference to an event or instance that must happen before another event or instance can happen. This type of precedent is referred to as a condition precedent.

Thus, a condition precedent needs a condition or a catalyst to cause another event or instance to occur. This type of precedent is commonly found within the area of contract law. This is because a contract can provide the instance or event that will allow another instance or event to happen. For example, a buyer and a seller enter into a contract with the expressed terms that the buyer will only pay upon the receipt of the seller’s goods. In this instance, the receipt of the seller’s good is the condition that must be fulfilled before the buyer pays. Thus, the receipt of the goods is the condition precedent.

It is also common for condition precedent to be used in estate planning and in creating trusts. For example, a parent can create a trust for his or her child, but the child can only gain access to the trust upon fulfillment of a condition stipulated by the parent.

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