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A condition subsequent is a situation that terminates a previously valid contract. Closely related legal concepts are conditions precedent and conditions concurrent. Certain types of contracts have clauses built in providing information about what happens when or if a condition subsequent arises. Essentially, it is a condition in a contract that triggers termination of the agreement and eliminates rights, responsibilities, and obligations for both parties.
Conditions subsequent may take the form of events that occur while both parties are bound to the contract. These conditions can also involve the failure of events to occur, or the cessation of an ongoing occurrence. One example of a condition subsequent might be a divorce. In a prenuptial agreement, there may be a clause stating that in the event of a divorce, interest in any real property reverts to the original owner.
When a condition subsequent occurs, it terminates any duty to perform and can also terminate rights and interests that were present under the terms of the contract. It is important to read contracts carefully to identify any situations that might be conditions subsequent and to determine what happens if these situations arise. Since contract law can be extremely complicated and at times difficult to understand, having a lawyer review a proposed contract may be beneficial for certain types of agreements.
Certain types of contracts have conditions subsequent built into them as a general rule and such conditions may be spelled out in boilerplate contracts that people can use for generic agreements. In other cases, a condition subsequent is added into a contract to account for special circumstances or situations. Either party to a contract can request to have such conditions added and can also contest these and any other terms of the contract if they are believed to be potentially against someone's interests.
When a contract has a clause that includes a condition subsequent and people suspect that this hypothetical circumstance is going to become a reality, it may be advisable to ask an attorney for help before the circumstances arise. The attorney can help people negotiate the termination of the contract as smoothly as possible in the given circumstances and can provide advice and assistance to limit liability and protect interests. Specialists in contract law can often provide the most sound advice to people in this situation, as they are intimately familiar with how contracts work and with how contracts can be litigated.
@MrMoody - I do believe that term is often used in that manner. As for letting both parties off the hook, it would depend on the nature of the contract.
A guy I work with had his house burned down several months ago. It was the result of some guy lighting a cigarette and tossing it on the dry lawn on an extremely hot summer day.
The next thing you know, an inferno was blazing through the neighborhood and parts of it reached my friend’s house and basically turned it into ashes. It was too late to rescue it by the time the fire trucks came.
The point is that the insurance company covered the repairs (or new house), because of course that’s what they’re supposed to do. So I don’t think they’d be off the hook in that case.
But I do agree that in most contracts, an act of God makes it null and void.
I wonder if what is commonly called an “act of God’ would come under the legal definition of a condition subsequent?
I think it would actually, and you see this phrase used a lot in certain contracts. Basically, if some terrible weather event or something unexpected happens, the contract becomes null and void.
While I somewhat object to the term act of God to refer to these events, I think it’s fair to insist that these would be extenuating circumstances that would more or less let both parties off the hook.