What is a condition precedent?

A condition precedent refers to a specific event or criteria that must be fulfilled before an obligation or duty under a contract arises. In real estate transactions, for example, this might include obtaining financing, completing satisfactory inspections, or receiving necessary approvals from a governing body. Each of these conditions must be satisfied for the contract to become effective or for the parties to move forward with their obligations.

This concept is essential in various contracts, including those in real estate, as it outlines specific prerequisites that need to be met before the parties involved are legally bound to perform their contractual duties. Without these conditions being satisfied, the parties are generally not obligated to proceed with the agreement, which helps to mitigate risks associated with unforeseen circumstances that could affect the transaction.

The other choices cover different legal concepts but do not accurately encapsulate the definition of a condition precedent. For instance, an event that discharges a duty refers to conditions that terminate a party's obligations; means to evaluate contract performance relates to assessing the fulfillment of contractual terms, and legal requirements pertain more broadly to the enforcement and validity of contracts rather than the triggering of specific duties. Thus, the chosen definition correctly aligns with the fundamental nature of a condition precedent in contractual law.