Condition Precedent and Condition Subsequent: Meaning and Differences
1. Meaning of Condition Precedent and Condition Subsequent
In legal terms, conditions refer to specific requirements that must be fulfilled for a legal obligation to arise, continue, or terminate. These conditions are classified into:
- Condition Precedent – A condition that must be fulfilled before a right, duty, or interest comes into effect.
- Condition Subsequent – A condition that terminates an existing right, duty, or interest upon its occurrence.
These concepts are primarily governed by the Contract Act, 1872, and the Transfer of Property Act, 1882 (TPA).
2. Condition Precedent (Section 25 of TPA)
A Condition Precedent is a condition that must be fulfilled before a transfer of property or legal obligation becomes effective. If the condition is not met, the transaction or right does not take effect.
Examples of Condition Precedent:
- Gift with a Condition – A person gifts a house to his nephew only if he completes his law degree. The nephew must first complete the degree before the gift becomes effective.
- Sale of Property – A buyer agrees to purchase land only if the seller obtains legal clearance from authorities. If the clearance is not obtained, the sale does not happen.
- Employment Offer – A job offer is made to a candidate subject to passing a medical test. The candidate must pass the test before joining.
Legal Effect:
- If the condition is not fulfilled, the transfer or obligation does not take effect.
- If the condition is impossible or illegal, the transfer is void.
3. Condition Subsequent (Section 29 of TPA)
A Condition Subsequent is a condition that, when it occurs, terminates an existing right, interest, or obligation. If the condition takes place, the legal effect comes to an end.
Examples of Condition Subsequent:
- Revocable Gift – A father gifts land to his son but specifies that if the son moves abroad permanently, the gift will be revoked. If the son settles abroad, the gift is terminated.
- Lease Agreement – A tenant is given a lease until he starts his own business. If the tenant starts a business, the lease automatically ends.
- Employment Contract – A company hires an employee but can terminate the contract if the employee is convicted of a crime. If convicted, the employment ends.
Legal Effect:
- If the condition occurs, the right or interest is extinguished.
- If the condition is uncertain or vague, it may not be legally enforceable.
4. Key Differences Between Condition Precedent and Condition Subsequent
Basis | Condition Precedent | Condition Subsequent |
---|---|---|
Definition | A condition that must be fulfilled before a right or obligation arises. | A condition that terminates an existing right or obligation. |
Effect | If the condition is not fulfilled, the transaction does not take effect. | If the condition occurs, the existing right is extinguished. |
Example | A scholarship is given only if the student scores 90% marks. | A scholarship is canceled if the student fails in any subject. |
Legal Impact | No legal right is created until the condition is satisfied. | A legal right is created but is revoked upon the condition happening. |
5. Conclusion
- A Condition Precedent ensures that an obligation does not arise until a certain event occurs.
- A Condition Subsequent results in termination of an existing obligation upon the occurrence of an event.
- Both are used in contracts, property transfers, and legal agreements to regulate rights and obligations.
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