Condition precedent CASES
In English law, a condition precedent is a contractual term specifying an event or condition that must occur before a party becomes obligated to perform their contractual duties.
Definition and Principles
A condition precedent effectively suspends contractual obligations until the specified condition is satisfied. If the condition is not fulfilled, obligations typically do not arise, and the contract may terminate or remain unenforceable.
Common Examples
- Obtaining necessary approvals or permits.
- Securing financing or investment.
- Completion of preliminary works or due diligence.
Legal Implications
- Clearly defines when obligations arise, reducing uncertainty.
- Non-fulfilment typically excuses parties from performance.
Practical Importance
Recognising conditions precedent helps manage contractual risks, ensures clarity around performance expectations, and avoids disputes relating to unmet preconditions.
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A ship was chartered for a specific voyage but was stranded and required extensive repairs, causing a delay of many months. The court held that this delay frustrated the commercial purpose of the venture, thereby releasing the charterers from their obligations. Facts The plaintiff, a shipowner, secured an insurance policy with the defendants for loss of freight on his ship, the Spirit of the Dawn. The policy covered perils of the sea. Subsequently, the plaintiff entered into a charterparty on 16 November 1871, for the ship to proceed ‘with all possible dispatch’ from Liverpool to Newport, and there load a
A sailor was promised a lump sum for a voyage from Jamaica to Liverpool but died before arrival. His widow sued for a proportionate payment but failed. The court ruled the contract was entire and required full performance for any payment to be due. Facts The defendant, Powell, the master of the ship ‘Governor Parry’, engaged T. Cutter to act as second mate for a voyage from Kingston, Jamaica to Liverpool. The defendant issued a promissory note which stated: ‘Ten days after the ship ‘Governor Parry,’ myself master, arrives at Liverpool, I promise to pay to Mr. T. Cutter the
