9 Conditional Contracts

Subject(s):

Third parties — Construction of contract — Formation of contract — Interpretation of contract — Performance of contract — Validity of contract

This chapter focuses on conditions that may impact on the formation of a contract. The typical ‘conditional contract’ is the agreement that is expressed to be ‘subject to’ the performance or occurrence of some event that is not certain to occur. The event itself is termed a ‘contingency’ and it is the contract or its performance that is termed ‘conditional’. The contingency may be one requiring some conduct or decision to be made by one of the parties, or a third party, or it may refer to some other event that is out of the control of anyone such as an act of nature. The chapter discusses the ‘subject to contract’ provisions; ‘subject to finance’ clauses; other ‘subject to’ clauses; time for the occurrence of contingency; waiver; and the consequences of the failure of a condition.