An agreement whose performance hinges on the occurrence or non-occurrence of a specified future event is conditional. This event, which is uncertain, must directly impact the obligations outlined within the agreement. For example, a property sale may be predicated on a satisfactory inspection report; the contract is only binding if the inspection results meet predetermined criteria.
Such arrangements offer flexibility and risk mitigation for involved parties. By tying contractual obligations to specific outcomes, the potential for disputes stemming from unforeseen circumstances is reduced. Historically, these agreements have facilitated transactions in sectors with inherent uncertainty, providing a structured framework to manage potential liabilities and enabling parties to proceed with confidence.
