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Contract & Commercial Law vocabulary · Mergers & Acquisitions

Condition precedent

Meaning in contract & commercial law, with examples

nounCommon term

In contract & commercial law, condition precedent means: An event or action that must happen before a contract, or a particular obligation in it, takes effect, such as a regulatory approval.

In Turkish: ön koşul, geciktirici şart

How it is used

The plural is 'conditions precedent', often shortened to CPs. In M&A, typical CPs are competition clearance, shareholder approval and third-party consents. A party may 'satisfy' or 'waive' a CP, and a 'long-stop date' sets the final deadline.

Example sentences

  1. Approval by the Competition Authority is a condition precedent to closing.

  2. If the conditions precedent are not satisfied by 31 December, either party may walk away.

Common collocations

  • satisfy a condition precedent
  • waive a condition precedent
  • CP satisfaction
  • long-stop date
  • conditionAn essential term of a contract whose breach allows the other party to terminate; also an event that must happen before an obligation starts or that brings it to an end.
  • closingThe final stage of a deal, when the last documents are signed or exchanged, the price is paid and ownership passes to the buyer.
  • share purchase agreementThe main contract in a company acquisition, under which the seller transfers shares in the target company to the buyer for an agreed price.
  • waiverThe giving up of a legal right or claim, either expressly in writing or through conduct, so that it can no longer be enforced.

More terms: Mergers & Acquisitions

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This page explains English vocabulary for learners. It is not legal advice.