R2d § 227
Standards of Preference with Regard to Conditions
(1) In resolving doubts as to whether an event is made a condition of an obligor's duty, and as to the nature of such an event, an interpretation is preferred that will reduce the obligee's risk of forfeiture, unless the event is within the obligee's control or the circumstances indicate that he has assumed the risk. (2) Unless the contract is of a type under which only one party generally undertakes duties, when it is doubtful whether (a) a duty is imposed on an obligee that an event occur, or (b) the event is made a condition of the obligor's duty, or (c) the event is made a condition of the obligor's duty and a duty is imposed on the obligee that the event occur, the first interpretation is preferred if the event is within the obligee's control. (3) In case of doubt, an interpretation under which an event is a condition of an obligor's duty is preferred over an interpretation under which the non-occurrence of the event is a ground for discharge of that duty after it has become a duty to perform.
Professor's notes
Elements: (1) when an obligor's duty is doubtful, an interpretation is preferred that will reduce the obligee's risk of forfeiture, UNLESS the event was within the obligee's control or the circumstances indicate he assumed the risk; (2) when it is doubtful whether words create a promise or an express condition, they are interpreted as creating a promise.
Morin Building Products v. Baystone operationalizes: "satisfaction" clause read with reasonable-person standard to avoid forfeiture.
Common misunderstanding: students apply express conditions strictly without checking § 227. Courts work hard to avoid forfeiture: a fully performed party losing the deal because of a technical non-occurrence. (1) tilts interpretation toward promise rather than condition when language is ambiguous. This is lifnim mishurat hadin: softening the strict din of express conditions to prevent disproportionate loss.
Text
R2d § 227. Standards of Preference with Regard to Conditions.
(1) In resolving doubts as to whether an event is made a condition of an obligor’s duty, and as to the nature of such an event, an interpretation is preferred that will reduce the obligee’s risk of forfeiture, unless the event is within the obligee’s control or the circumstances indicate that he has assumed the risk.
(2) Unless the contract is of a type under which only one party generally undertakes duties, when it is doubtful whether
(a) a duty is imposed on an obligee that an event occur, or
(b) the event is made a condition of the obligor’s duty, or
(c) the event is made a condition of the obligor’s duty and a duty is imposed on the obligee that the event occur,
the first interpretation is preferred if the event is within the obligee’s control.
(3) In case of doubt, an interpretation under which an event is a condition of an obligor’s duty is preferred over an interpretation under which the non-occurrence of the event is a ground for discharge of that duty after it has become a duty to perform.