Condition Precedent

In contract and real estate law, a condition precedent is a specific event or requirement that must occur before a contract becomes fully effective or before a party is obligated to perform. Until the condition precedent is satisfied, the rights and duties under the contract or transfer of property do not take effect. Common examples in real estate include a buyer obtaining financing, approval of an inspection, or the issuance of a clear title report. Conditions precedent help protect parties by ensuring that certain essential requirements are met before they are legally bound to complete a transaction.