Condition precedent

1. Condition Precedent

2. A condition precedent

• is a condition or an event that must happen
before a contract is in effect.
• A condition precedent can also trigger what
each person must do under a contract.

3.

• For instance, in the example, the agreement
to purchase the house does not become
effective until the inspector determines that
the property passes inspection.
• However, if the inspector indicates that the
house fails inspection, then there is no binding
agreement.

4.

• Condition precedent clause can be written in
any variety of ways
• There is no one correct way to draft a
condition precedent clause

5. In a loan agreement

• a condition that must be satisfied by the
borrower before it may request a drawdown
and the lender is obliged to lend.
• Unless otherwise provided, the rest of the
loan agreement (including any obligation of
the borrower to pay fees) will be binding on
the borrower on execution of the loan
agreement.

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• Thank you for your attention!!!