Login Advisor Login Newsletters. Also in reference to a events which must occur before being eligible for other legal rights such as in Canada, an immigrant has to pass through the stage of permanent resident before applying for citizenship. A company that is acquired to operate as a subsidiary might need to produce results on a new product or generate a certain degree of sales within a set timeframe. The company signed a condition precedent with its employees that stated that they must collectively produce fifty widgets a day each or the bonuses promised would not be forthcoming.
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A conflict exists with the homes involving a verbal agreement. Express or implied stipulation in a contract that 1 a contracting party must perform its part before it can demand performance from the other s , or 2 a certain event must occur before a party has right to performance or to demand damages for non-performance.
Merger and acquisition deals may include condition precedents that govern the payout terms. Compare with condition subsequent.
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Close navigation. Once those conditions are met, the next installment of the acquisition payments will be made.
Related Terms Exculpatory Clause An exculpatory clause is a portion of a contract that relieves a party of liability if damages caused during the execution of the contract. Business contracts can feature numerous condition precedents that dictate the handling of different activities. In contracts that refer to a condition precedent it is entirely possible that one party will never have to fulfill his duties, because the condition was not met. The term condition precedent refers to something that must happen, or a circumstance that must exist, before something else will happen.
In the trust, the couple specify certain conditions precedent for each of their three children to inherit their wealth:. You Also Might Like...
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