Which description best characterizes a condition subsequent in contract law?

Which description best characterizes a condition subsequent in contract law?

• A. A term in a contract which provides that the contract will terminate on the happening of a particular event.
• B. A term which must be satisfied before a contract can come into existence.
• C. A non-essential term whose non-performance will not entitle rescission.
• D. A term whose consequences cannot be determined until after breach.

Answer: (A)

The concept tested is condition subsequent in contract law. A condition subsequent is a term that ends the contract when a specific event happens, so the obligations of the parties are discharged once that event occurs. The description stating that the contract will terminate on the happening of a particular event matches this idea precisely, because it ties the termination of the agreement to an event occurring after the contract has begun. To see why this is the right fit, consider how it differs from other types of conditions. A condition precedent must happen before the contract even comes into existence, so it would not describe termination after the contract has started. A non-essential term whose breach does not entitle rescission describes something that doesn’t automatically end the contract, which is not about terminating upon a future event. A term whose consequences are unknown until after breach doesn’t capture the idea of a predetermined event that terminates the contract.

The concept tested is condition subsequent in contract law. A condition subsequent is a term that ends the contract when a specific event happens, so the obligations of the parties are discharged once that event occurs. The description stating that the contract will terminate on the happening of a particular event matches this idea precisely, because it ties the termination of the agreement to an event occurring after the contract has begun.

To see why this is the right fit, consider how it differs from other types of conditions. A condition precedent must happen before the contract even comes into existence, so it would not describe termination after the contract has started. A non-essential term whose breach does not entitle rescission describes something that doesn’t automatically end the contract, which is not about terminating upon a future event. A term whose consequences are unknown until after breach doesn’t capture the idea of a predetermined event that terminates the contract.