A. Introduction

AuthorJohn D. McCamus
ProfessionProfessor of Law. Osgoode Hall Law School, York University
Pages672-675

Page 672

The terms of a contract are of two kinds. First, enforceable agreements contain promises or undertakings in which the promisor typically undertakes to do certain things in the future. Contractual promises may also take the form of a promise or guarantee that a particular statement is or will continue to be true.1Second, the typical agreement will contain terms, though they may often be implied rather than express terms, that stipulate or prescribe states of affairs that must exist, or not exist, if one or more of the undertakings in the agreement is to be enforceable. Under traditional usage, terms setting out these kinds of arrangements are referred to as "conditions." A simple building contract, for example, could contain a promise to build a house according to certain specifications on the part of the builder and a promise by the hirer to pay a certain contract price. Either expressly or by implication, the agreement may contain a further term that stipulates that the completion of the building by the builder is a state of affairs that must exist before the obligation of the hirer to pay the contract price becomes enforceable. Where the subject matter of the condition, as in this illustration, is the performance of one of the promises set out in the agreement, the condition is often referred to as a "promissory condition." A

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condition will often prescribe something other than the performance of a promise as the state of affairs that must exist before one or more of the promises in the agreement becomes enforceable. Thus, for example, the building contract might provide that the promises to build and to pay respectively are not enforceable until such time as a building permit has been issued by the local municipality. Such a condition may be referred to as a "non-promissory condition" because neither party has promised that the municipality will issue a building permit. If the municipality refuses, for some reason, to issue a building permit, neither the builder nor the hirer is obliged to perform its contractual promises and neither is in breach of its contractual obligations.

Conditions may also be subdivided into "conditions precedent" and "conditions subsequent." A condition precedent describes a state of affairs that must exist before one or more of the promises set out in the agreement becomes enforceable. The enforcement of the obligation, it is sometimes said, is suspended. If neither party has promised to...

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