Contracts & ExecutionQuestion 852 of 1605
A 'condition precedent' in a contract is:
a.A clause requiring arbitration
b.A term that automatically voids the contract
c.An event that must occur before a party's duty to perform arises
d.A promise to pay liquidated damages
Explanation
A condition precedent is an event that must occur before a party becomes obligated to perform. For example, a subcontract may state that the general contractor's duty to pay the sub is conditioned on the general first receiving payment from the owner. Until the condition is satisfied (or excused), the conditioned duty does not arise. It is not an automatic voiding term, a damages clause, or an arbitration provision.
Practice all 1605 questions free — no signup required.
Related questions on this topic
- California license law requires that certain contractor agreements be reduced to writing. Beyond consumer protection, one general business reason a contractor benefits from a written contract is that it:
- Under California Contractors State License Law, an unlicensed person who performs work requiring a license generally faces which severe contract-related consequence?
- A properly licensed contractor completes a commercial tenant improvement and is not paid. The contractor's ability to sue for the unpaid balance is generally supported because:
- A 'pay-if-paid' clause in a subcontract attempts to make the general contractor's receipt of payment from the owner a:
- The 'implied covenant of good faith and fair dealing' that accompanies most contracts requires that:
- A bilateral contract is distinguished from a unilateral contract in that a bilateral contract involves:
Last reviewed: · editorial process
Sen Lin, PrepPass Founder · Verified against California CSLB Contractor License Law & Business Exam · How we review
Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)