Conditions

Module VI opens with the doctrine that decides when a contractual duty becomes enforceable. A condition is an event that must occur before performance falls due. The pivotal move of the day is learning to tell a condition apart from a promise, because the two carry opposite consequences when they fail.

Conditions and the duty to perform

R2d § 224. A condition is an event, not certain to occur, which must occur before performance under a contract becomes due, unless its non-occurrence is excused. A condition does not itself create a duty; it qualifies one. That is why the failure of a condition is not a breach.

R2d § 225. When a condition cannot occur, the duty it qualified never comes due and is discharged. Critically, § 225(3) makes the non-occurrence of a condition a breach only if the party was also under a duty that the condition occur. Absent such a duty, the disappointed party may walk away or waive the condition and proceed — but may not insist that the other side renegotiate.

R2d § 226. An event is made a condition either by the parties’ own language (an express condition) or by the court supplying a term to fill a gap (a constructive condition). Express conditions are read for strict compliance; constructive conditions are softened by doctrines like substantial performance, which we reach next class. Classify each condition on two axes at once: by timing (precedent, concurrent, subsequent) and by source (express, implied-in-fact, constructive).

Cases

Kingston v. Preston (K.B. 1773) abandoned the old presumption that mutual promises are independent. Lord Mansfield held the buyer’s promise to provide good security was a condition precedent to the seller’s duty to hand over his business: because the parties evidently intended the security to come first, the seller need not perform until it did. This is the constructive condition that makes the dependent bilateral contract work.

Morrison v. Bare (Ohio Ct. App. 2007) holds the line between condition and promise. The seller’s failure to produce a bill showing the furnace was actually repaired meant the buyer’s duty to pay never came due — but it was not a breach. So the buyer could walk away or close anyway; he could not force the seller to repair-and-convey or to cut the price. Demanding new terms was merely an offer for a new contract, which the seller was free to reject.

What you should be able to do

Apply § 224 to label a term a condition or a promise, and predict the consequence of each on failure. Classify a closing-condition by timing and source, and explain why express conditions get strict compliance while constructive ones do not. Next class extends Kingston’s dependent-covenant logic into the promissory condition and the substantial-performance doctrine of Jacob & Youngs.