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Conditions Precedent and Conditions Subsequent
Conditions Precedent and Conditions Subsequent  
By Brian Madigan LL.B.There is always a great deal of confusion and discussion concerning conditions and escape clauses contained in agreements relating to real estate. But, it is really rather straightforward and the documentation depends upon how the escape clause was written in the first place.There are really just two categories:1) pending deals (which require confirmation), and2) confirmed deals (which include an escape).Pending deals are generally described by a condition precedent clause, and confirmed deals with a provision for escape are evidenced by the condition subsequent clause. The condition precedent clause begins with the words "this agreement is conditional upon...." and the condition subsequent clause begins with the words "the purchaser shall have the right to terminate...".Conditions PrecedentThere is no deal, until the condition is fulfilled, satisfied or waived. Usually, the condition will relate to a specific matter like mortgage financing or the physical state of the premises. Once it is satisfied, then in order to confirm the transaction and make sure that there is a binding agreement between the parties, this matter needs to be documented within the relevant time period.This documentation can be accomplished in several ways which include either both parties signing ... more

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