Contract Law Simplified: Conditions

[@KasieCollins]

This was so amazingly helpful. Thank you!

[@BizLaw]

@@KasieCollins so glad it helps. And of You’re looking for another take, my new podcast episode on this just dropped @ podcasts.apple.com/us/podcast/organized-the-business-law-breakdown/id1763432331?i=1000676136859

[@AmitKapoor-e1s]

Where a conditional offer is made - is it right that is the condition is "condition precedent", then the contract is void until the condition is met (regardless of whether the offeree has accepted it previously). Also, if the condition is "condition subsequent", then the contract is 'voidable' when the condition fails to be met.

[@BizLaw]

You are on the right track, but let me correct your use of legal terminology. "Void" means the contract effectively does not exist. On the other hand - when a conditional offer is made but not performed, then the contract is valid (not void) - but the obligations therein are not due. In other words, when a condition is unperformed, the contract exists, but it does not [yet] put legal obligations on one or the other party.

[@comment630]

When analyzing whether a term is a condition, promise, or promissory condition. Can you give some common examples of conditional language? I would imagine it would be "conditioned upon..." or "if...then". Do you have any other common language examples that appear within clauses that reference express conditions? Thanks for the helpful video!

[@BizLaw]

You are right. If X, then Y, is prototypical conditional language. Similar language includes: "on condition that," "upon happening of," "whether...where," etc. But also condition language can be implied by the content. A term might be conditional even where it lacks these patent (intrinsic) signifiers of conditionality, because latent (extrinsic) circumstances reveal conditional intentions.

[@trisix99]

I'm wondering if you can give an example of a promissory condition? Also, I'm wondering why the condition in Jacob & Young v Kent was not an explicit condition or term? Thank you so much!

[@BizLaw]

Sure -- because most contractual promissory are promissory conditions! Recall that contracts require an exchange of promise -- this is the consideration doctrine. If promises are given in exchange for each other, then they are mutually conditional on each other, too. For example, if you promise to buy someone's car on Friday for $10,000 in the local Starbucks parking lot, and if they don't show up with the car, do you have to pay the money? Of course not! Why? Because your promise to pay the $10,000 is IMPLICITELY conditioned on their tendering the car. Their promise to sell you the car is both a promise -- you can sue for failure to tender the car -- and a condition -- you do not have to perform your obligation of paying if the car is not made available to you. There are more complex examples, but, in the main, we should strive to understand that the major promises in contracts are also implicit conditions on the others' mutual performance.

[@clippersfan8898]

@@BizLawawesome! I am just confused on how it is a promise and a condition though. I see the promise but what is the condition?thank you!

[@concordocean4929]

Is de minimus rule applicable to "substantial performance"? Thanks.

[@BizLaw]

Can you elaborate on what is the "de minimus" rule? As I understand it, any "de minimus" breach would result in substantial performance, by definition, but perhaps that is because I am not aware of a special "de minimus" rule in contract law.

[@BizLaw]

No, but the rules are similar. The de minimus rule is a subjective standard of materiality, as is the substantial performance rule. The difference is, how material. The question is similar to how we'd think about burdens of proof. "Beyond a reasonable doubt" is a higher standard that "preponderance of the evidence," but, qualitatively, how should we measure each? Some say >50% versus >99%, but what does 99% confidence mean to a jury? I'd argue these subjective concepts. So, the underlying concept of de minimus and substantial performance is similar - both speak to a subjective impression of how much a burden is born - but there is no direct application of the de minimus concept to substantial performance.

[@concordocean4929]

@@BizLaw Thank you.

[@concordocean4929]

Can I understand as: Part performance vs complete performance -->substantial performance triggers mutually at implied term Promise vs condition --> condition precedent as an on switch at beginning --> condition subsequent as an off switch at beginning Mutuality -->implied promise in return for promise

[@BizLaw]

I agree with 2 out of 3 statements, let me amend the third. First, you are correct that substantial performance triggers a mutual obligation subject to an implied condition. Second, you are further correct that mutuality is the concept that promises are implicitly conditional to one another. However, a condition precedent is one that is "off" at beginning -- some event must occur before a promise subject to a condition precedent becomes due or "on." Whereas a condition subsequent is "on" at beginning, and the event turns "off" the conditional promise. Conditions precedent/sequent are a rather technical and confusing vestige -- I think you've understood the most important concepts by distinguishing "express conditions" (which are either "on" or "off") from "implied conditions" (which can be "completely performed," "substantially performed," "materially breached," or "totally breached).

[@concordocean4929]

@@BizLaw Thank you very much for your enlightenment.