What is a condition precedent in a contract?

A condition precedent in a contract refers to an event or circumstance that must occur before a party is required to perform their contractual obligations. This means that if the specified condition does not occur, the party's duty to perform may be suspended or entirely negated. For example, in a real estate contract, the buyer's obligation to purchase may be contingent upon obtaining financing; if the buyer is unable to secure that financing, the obligation to complete the purchase does not arise.

In contrast, other phrases like an obligation fulfilled after the contract is signed does not capture the concept of a condition precedent, as it describes a condition subsequent. A clause that allows for changes in contract terms relates to contract modification, not the initial obligation trigger. Finally, fulfilling all obligations under a contract pertains to performance or completion and is unrelated to the concept of a condition that must occur prior to performance. Thus, identifying that a condition precedent specifically requires an event to occur before performance is key in understanding its role in contract law.