Conditions should be satisfiable

The nature of a condition implies that it is either triggered or not. This post discusses the aspect of satisfying a condition: best practice rule 4 in a series on drafting conditions.

4)      Each condition and each conditional clause should be formulated such that it is capable of being either ‘satisfied’ (or ‘fulfilled’) or not.

This is the same best practice rule as applies to drafting warranties (where each warranty should be capable of being either correct or incorrect). Conditions and triggering events are digital components of a contract (not analogue elements). Especially where a condition contains a subjective element, the trigger whether it is satisfied or not becomes fluent.

The more questionable the satisfaction of a condition is, the more likely it is that only one party determines whether or not it is satisfied. In that case, the condition may qualify as a potestative condition and be invalid or inoperative. Also, if the parameters for satisfying a condition are vague, the factor ‘reasonableness’ of invoking the condition becomes more important. After all, from a legal point of view, whether or not a condition is satisfied (or fulfilled) or not remains a matter of interpretation.

Mixing up conditions and obligations is a source of ambiguity. This is particularly sensitive if you explore the dividing line between a condition on the one hand and an obligation depending on the performance of another obligation on the other hand. For example, compare:

If Purchaser becomes aware of a matter which is likely to give rise to a Warranty Claim, Seller shall not be liable in respect of such Warranty Claim unless Purchaser has given notice of the relevant facts to Seller promptly after becoming aware of the matter or such facts.

If Purchaser becomes aware of a matter which is likely to give rise to a Warranty Claim, Purchaser shall give notice of the relevant facts to Seller promptly after becoming aware of the matter or such facts.

In the first example, a right to an indemnification exists (under the condition that the claim, which gives rise to the indemnification, is notified promptly); whereas in the second example, which is not a condition, such right to an indemnification is not affected if no prompt notice has been given. The second example is in fact a lex imperfecta in that the breach of the obligation to notify (promptly) remains a priori without consequences.
The failure to satisfy a condition results in the non-existence of a right or obligation to which the condition pertains; the failure to perform an obligation upon which another obligation or a right depends, results in a claim for restitution, a right to suspend performance or a claim for damages.

Grammatical recommendations. As a consequence of the rule that conditions should be capable of being correct or not, it is recommended to use the present tense in all conditions. The present perfect is also acceptable if the condition represents a preliminary question that needs to be settled (as opposed to a matter that needs to be negotiated and agreed on). Therefore, it is recommended to avoid the use of shall (or will).

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