What is a condition precedent?

A condition precedent is an event or action that must occur before the creation of an enforceable contract in North Carolina. This event must be agreed upon in the contract itself and must occur before any duty or obligation under the contract begins. For example, if two parties are entering into an agreement to sell a car, the condition precedent might be that the buyer must first put down a deposit of $500 as a sign of good faith. Until the buyer puts down the deposit, neither party has an obligation to fulfill the agreement, and the buyer can back out. Once the condition precedent is satisfied, the agreement is binding and the two parties have certain obligations under the contract. The purpose of a condition precedent is to provide protection for both parties by ensuring that they are both ready to fulfill the agreement before they are bound by it. This adds a layer of security and stability, and helps ensure that both parties are in agreement before the contract is enforced.

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