Explain the differences between conditions precedent, conditions subsequent, and concurrent conditions.

Question

What will be an ideal response?

Answer 1

Generally, a party's contractual duty to perform arises at the time the contract is formed, even though the time for performing is set for a future date. The parties may, however, provide that a party's duty to perform is qualified by the happening of some event, or condition. If the event must occur before a party's duty to perform arises, this is called a condition precedent. For example, Tom promises to buy Mary's race car for $350,000 if the car wins the Indianapolis 500 race. The car's winning the race is a condition precedent to Tom's duty to buy. If the car does not win, a failure of condition has occurred, and Tom has no duty to buy the car.

If the happening of a condition discharges an existing duty to perform, this is called a condition subsequent. For example, Joan and Mike enter a contract requiring Joan to mow Mike's grass on July 3, the day before his big party on July 4, unless it rains. If it rains, Joan does not have to mow the grass, and Mike's duty to pay Joan is discharged.

If the contract calls for the parties to perform their duties at the same time, each party's duty to perform is conditioned on the other party's performance. These conditions are called concurrent conditions. Neither party can enforce the other party's promise without performing or tendering (offering) performance. For example, Pete agrees to buy Wendi's cookie store for $150,000. Pete does not have a duty to pay the $150,000 unless Wendi tenders the store. Wendi does not have a duty to give Pete the store unless Pete tenders the $150,000.