Question

Frequently, real estate contracts are conditioned on an event such as the buyer’s ability to sell his current home by a certain date. If the home does not sell, the condition does not arise, and the parties have no duty to perform and are thus discharged from the contract. This is an example of a contract that is subject to a_______.

Answer 1

Answer: condition precedent

         

Explanation: In simple words, a condition precedent refers to the set of affairs or contract that are necessary to happen in a contract or else no contractual duty will arise on both sides of the contract. Thus it can be considered as a contract that must occur.

In the given case, the real estate contract arise on the condition that the buyer sells his current home or otherwise no contract exist. Hence this act could be considered as condition precedent.