Conditions to Performance

Question 1

What are the two types of express conditions?

Answer 1

There are two different types of express conditions. (1) Condition precedents must occur before the party’s legal duty to perform is triggered. (2) Condition subsequents terminate the party’s duty to perform upon the occurrence of the event.

Question 2

Express conditions rule

Answer 2

The rule for express conditions breaks down into three steps:

• (1) Did the parties intend for there to be a condition? This requires clear and unambiguous language.
• (2) If so, has the condition occurred? The event must match the terms exactly; substantial performance does not apply.
• (3) If not, is the condition excused? A condition may be excused by:
  
  • (a) express waiver excusing the condition (consideration necessary if material),
  • (b) estoppel (other party promises to waive the condition and the party whose performance is conditional reasonably relies on that promise),
  • (c) wrongful hindrance of the condition by the party whose performance is conditional, or
  • (d) the condition causing a forfeiture to either party.

Question 3

Constructive conditions (implied by law)

Answer 3

Constructive conditions are implied by law when there is neither an express condition nor a condition implied by fact. There are two rules for constructive conditions:

• (1) When one party’s performance takes a longer period of time than the other party, that performance is due first. (For example, duty to mow one’s lawn versus the duty to pay).
• (2) If the two performances can be done more or less at the same time, then they must be performed at the same time.

The doctrine of substantial performance does not apply to express conditions. However, substantial performance does apply to constructive conditions. Because the parties never expressly agreed to the constructive condition, courts treat these terms like promises. Consequently, a partial breach by one party does not provide a right to the other party to terminate the agreement.