What You'll Learn

  • Condition versus promise
  • Types of conditions
  • Satisfaction clauses
  • Waiver and estoppel
  • Excusing nonoccurrence

Educational information only; not legal advice. This article is a general study aid and should be checked against current authority and course materials.

Forfeiture

1. Condition vs. Promise

Concept Effect of nonperformance or nonoccurrence

Promise Breach; damages follow, and a material breach may excuse the other party.

Condition The conditioned duty does not become due or is discharged, unless the condition is waived or excused.

Promissory condition The same event is both promised and made a condition; nonoccurrence can create breach and affect the other duty.

2. Types of Conditions

● Condition precedent: must occur before a duty becomes due. ● Condition subsequent: terminates an existing duty; less common in Contracts analysis. ● Concurrent conditions: performances are due at the same time, such as payment against delivery. ● Express condition: stated with language such as “if,” “provided that,” “subject to,” “upon,” or “on condition that.” Strict compliance is ordinarily expected. ● Constructive or implied condition: supplied by law to connect dependent performances and avoid injustice.

Key Takeaway

A phrase like “when paid” may describe timing rather than create a true condition that the duty disappears if a third party never pays. The outlines emphasize intent: is payment delayed until an event, or made contingent on whether the event ever occurs?

3. Satisfaction Clauses Are Not Automatically Illusory

Subject matter Standard

Personal taste, aesthetics, judgment, or fancy Subjective good faith: the promisor must honestly be dissatisfied and may not act capriciously.

Mechanical fitness, utility, quality, commercial value, or conformity to specifications Objective reasonableness: would a reasonable person be satisfied?

The good-faith limitation prevents the promisor from having unlimited discretion. Even a subjective satisfaction condition therefore creates a real obligation.

4. Waiver and Estoppel

Waiver

The party protected by a condition may expressly state that performance will be accepted despite nonoccurrence, or impliedly waive the condition by knowingly accepting nonconforming performance. The outlines caution that waiver is less available when the condition is a material part of the exchange.

Estoppel

An obligor may be prevented from insisting on a condition after promising to perform despite nonoccurrence and inducing reasonable, foreseeable, detrimental reliance. The condition is excused because it would be unfair to reverse course after the obligee changed position.

5. Other Grounds for Excuse

● Prevention or bad faith: a party that wrongfully causes nonoccurrence cannot rely on the condition it defeated. ● Impracticability: a nonmaterial condition may be excused when occurrence becomes impracticable under the doctrine described in the outlines. ● Disproportionate forfeiture: a court may excuse a nonmaterial condition when the obligee substantially relied or performed and the forfeiture would greatly exceed the harm caused by excuse. ● Prospective repudiation: a clear refusal to perform can excuse remaining conditions on the nonbreaching party’s performance.

Key Takeaway

A painting contract says payment is due only if the work is completed by May 15. The painter begins on May 20 while the owner watches, directs the work, and accepts the completed painting. If timeliness was not material, the owner’s knowing acceptance supports implied waiver. If the date was central to an event occurring May 16, the result is much harder.

Exam Tip

  1. Quote the condition language. 2. Classify precedent, subsequent, concurrent, express, or constructive. 3. Identify the protected party. 4. State the satisfaction standard if relevant. 5. Ask whether occurrence failed. 6. Analyze prevention, waiver, estoppel, impracticability, or disproportionate forfeiture. 7. State the effect on the duty.

Common Mistake

Calling every contractual duty a condition; treating nonoccurrence as breach; applying substantial performance to an express condition without excuse analysis; allowing bad-faith dissatisfaction; and finding waiver without knowledge of the nonoccurrence.

Primary Authorities

  • ● Restatement (Second) of Contracts: conditions, waiver, and excuse principles.

  • ● The satisfaction, estoppel, waiver, and disproportionate-forfeiture framework described in the uploaded Contracts outlines.

Exam-ready conclusion

Conditions allocate risk by controlling when duties arise. Apply their language carefully, use good faith for satisfaction, and separately analyze whether equity or the protected party’s conduct excuses strict compliance.