A condition precedent is a legal term used in contracts and agreements that refers to a specific event or condition that must occur or be fulfilled before a party is obligated to perform their duties under the contract. In other words, it is a condition that must be satisfied before a contractual obligation becomes enforceable.
For example, in a real estate transaction, a common condition precedent might be that the buyer secures financing for the property purchase. If the buyer does not obtain the necessary financing, the obligation to go through with the purchase may not arise.
Conditions precedent can serve various purposes, including protecting parties from uncertain future events or ensuring that certain criteria are met before the contractual relationship takes effect. If the condition precedent is not met, the parties may not be required to perform their obligations under the contract.