What does "conditions precedent" refer to in contract law?

"Conditions precedent" in contract law refers to specific conditions or events that must occur before a party is obligated to perform their part of the contract. This term indicates that the performance of the contract is contingent upon the fulfillment of certain conditions. If these conditions are not met, the contract may be rendered void or the obligations may be delayed.

For instance, in a real estate contract, a condition precedent might be obtaining financing for the purchase of the property. Until that financing is secured, the buyer is not obligated to complete the transaction. Understanding this concept is vital because it helps parties navigate their responsibilities and the timeline of the contract execution effectively, ensuring that certain milestones are achieved before moving forward with the agreement.