In the forthcoming blogs, I will post my comments on each best practice rule on drafting ‘conditions’. As a step up to all those blogs, I collected the complete set of best practice rules here. If you believe there is another best practice rule, let me know!
Below are best practice principles and rules of good practice related to drafting conditions, conditional clauses and triggering events. Where a reference is made to a “condition”, the same applies to “triggering events” and, albeit to a slightly lesser extent, to conditional clauses. The best practice rules refer to conditions being ‘satisfied’ or not; there is no difference in meaning intended with the word ‘fulfilled’ and the same principles apply to conditions that should not be fulfilled in order for the object of that condition to have its effect.
1) The object of the condition, conditional phrase or triggering event should be clearly defined.
2) Bring conditions that relate to the same object together in one article or section of the agreement.
3) Divide conditions clearly, subject-by-subject and consider enumerating them.
4) Each condition and each conditional clause should be formulated such that it is capable of being either ‘satisfied’ (or ‘fulfilled’) or not.
5) Never include a warranty, an obligation or other operative clause in a condition.
6) Avoid reformulating exceptions as a condition.
7) Do not phrase the key obligation of an agreement as a condition.
8) Conditions referring to the absence of a fact or the non-occurrence of an event would require a statement in writing that such fact is absent or that such event has not occurred.
9) Do not include a best efforts provision in connection with a condition, unless it specifies a required (i.e., a particular or preferred) course of action in a meaningful manner.
10) Conditions are for the benefit of both parties, unless otherwise specified.
11) Include a deadline before which all conditions must be satisfied.
12) Specify the effects of non-fulfilment of a condition.