What does a "condition subsequent" imply in a contract?

• A. A condition that upholds the contract
• B. A condition that causes the contract to become invalid if a certain event occurs
• C. A standard term that must always be included
• D. A mandatory obligation of the parties involved

Answer: (B)

A "condition subsequent" in a contract refers to a specific event or condition that, if it occurs, can lead to the termination or invalidation of the contract. This means that the continuation of the contractual obligations depends on the occurrence of this event. For example, if a contract stipulates that it will be voided if a particular regulatory change takes place, that regulatory change serves as a condition subsequent. If that event happens, the parties are no longer bound by the terms of the contract. This concept is key in contract law as it outlines specific contingencies that may affect the obligations of the involved parties. Understanding this term helps in recognizing how contracts can be structured with various conditions that influence their enforceability.