What is a Condition Subsequent? Definition
In the world of business, there are a lot of terms that get thrown around. Some of them are common knowledge, while others only apply to specific situations. Condition subsequent is one of those terms. A condition subsequent is a condition in a contract that, if not met, voids the contract. In other words, it’s a way out of the agreement for one or both parties. This could be because the conditions of the original contract are no longer met or because something else has happened that makes it impossible or impractical to continue with the agreement.
What is a condition subsequent?
A condition subsequent is a type of contract clause that modifies or cancels the obligation of one party if a specific event occurs. The occurrence of the event voids the contract or alters the terms of the agreement. Common events that may trigger a condition subsequent include non-payment, breach of contract, and failure to meet a specified milestone.
What are some examples of condition subsequent?
There are numerous examples of condition subsequent. A few examples are as follows:
If a company goes out of business, the employees may be eligible for unemployment benefits.
If a person is convicted of a crime, they may lose their right to vote.
If a student fails to maintain a certain GPA, they may be placed on academic probation.
How can you avoid a condition subsequent?
There are a few ways that you can avoid triggering a condition subsequent. First, be sure to clearly state in the contract what will happen if the condition is not met. This will help to prevent any misunderstanding down the road. Secondly, make sure that all parties involved in the contract understand the consequences of not meeting the condition. Finally, have a contingency plan in place in case the condition is not met. This could involve having another source of funding lined up or having a backup plan for how to proceed with the project.
What happens if you breach a condition subsequent?
If you breach a condition subsequent, the original grantor may retake the property that was granted to you. The grantor may also sue you for damages.
Conclusion
A condition subsequent is a contractual clause that modifies or rescinds rights or obligations if a specific event occurs. The purpose of a condition subsequent is to protect one of the parties to the contract from unforeseen events that may occur after the contract is signed. While some contracts contain clauses that allow for modifications to be made without the consent of all parties, most contracts require all parties to agree to any changes before they become binding. In order for a condition subsequent to be enforceable, it must be clear and unambiguous so that both parties understand their rights and obligations under the contract.