What is Condition Precedent?

A condition precedent is a legal term for something that must occur before another thing occurs. In other words, it is a condition that must precede or predate a specified event. It is, in effect, the catalyst that causes something else to occur.

The idea of a condition precedent is common in contract law. A contract can stipulate that something will occur if and only if another event occurs. That other specified event is the condition precedent.

If there is a dispute as to whether the condition was fulfilled, a court can resolve the dispute by looking at the language in the contract describing the condition precedent. The court can then determine whether the condition was fulfilled. When including condition precedents in either contracts or wills, the terms of the condition must be clear.

This means that the contract or legal document must state exactly what the condition is. If the condition is not clearly stated, the court must interpret the condition in light of the parties' intent. The court normally looks at the legal document as a whole in order to determine if the condition was fulfilled.

A condition precedent is also common in estate planning, and in establishing trusts. For example, a parent can set up a trust for his her her child, but make receipt of the money in the trust based on the child fulfilling a condition. This condition is referred to as the condition precedent on inheritance.

Such a condition can also be established in a will. For example, a parent can stipulate that a child is to inherit only if that child is married at the time, or if that child has graduated from college. Likewise, in a trust context, a parent can stipulate that a child is to begin earning income or receiving assets from the trust only upon fulfilling certain criteria.

The criteria that the child must fulfill, such as graduating form college, is thus a condition that must precede inheritance. These conditions can be anything that a person wishes, as long as they do not violate public policy. For example, a parent could not stipulate that a child must commit murder before inheriting, because fulfilling the condition would violate the law.

When a condition is stated as a requirement for something to occur, normally the contract or other legal doctrine will stipulate what happens if the condition is not fulfilled. For example, if a contract becomes active only when a condition is fulfilled, the terms of the contract will often state what is to happen if the condition is never fulfilled. The same is true when condition precedents are included in wills or trust documents.