Which type of contractual condition must be fulfilled before a party is required to perform?

A condition precedent is a specific type of contractual condition that must be satisfied before an obligation to perform arises under a contract. In essence, it acts as a prerequisite to the performance of contractual duties. For instance, in a sales contract, if one party must secure financing before completing the purchase of goods, the financing is a condition precedent. Until this condition is fulfilled, the other party is not obligated to fulfill their part of the contract.

This concept is crucial because it sets clear criteria that must be met for a contract to be enforceable and ensures that parties understand their obligations in relation to these conditions. It establishes the timing and order of performance, which can influence the overall dynamic of the agreement and the expectations of the involved parties.