Also known as:implied conditions · condition implied in fact · condition implied in law
Written by attorneys · grounded in primary & secondary sources — see below
2 senses
1
in donative transfers
A future interest in a trust or will is not subject to an implied condition requiring the beneficiary to survive the distribution date or any other post-creation time or event. The beneficiary's interest passes through the beneficiary's estate if death occurs before distribution.
2
Sense 1
1
in donative transfers
A future interest in a trust or will is not subject to an implied condition requiring the beneficiary to survive the distribution date or any other post-creation time or event. The beneficiary's interest passes through the beneficiary's estate if death occurs before distribution.
Sources & Authorities· 1 source
Select any source to read its text and confirm it supports the definition.
Restatements
Sense 2
2
in contracts
A condition implied by law that excuses a party's performance when a specified thing ceases to exist or a contemplated event fails to occur, rendering performance impossible without the party's fault.
Sources & Authorities· 1 source
Select any source to read its text and confirm it supports the definition.
A condition implied by law that excuses a party's performance when a specified thing ceases to exist or a contemplated event fails to occur, rendering performance impossible without the party's fault.
Each sense below has its own examples, sources, and questions.
Examples1
Future Interest Passes Through Estate
Grantor created a trust directing income to A for life, then principal to A's children X, Y, and Z. Y died before A but left descendants who survived A. On A's death the trustee distributed one-third of the principal to Y's estate rather than treating Y's share as failed for lack of survival.
Frequently Asked2
Does a future interest in a single-generation class gift carry an implied survival requirement?+
No. The traditional rule provides that a future interest in a single-generation class gift is not subject to an implied condition requiring survival of the distribution date. The deceased class member's share passes through the member's estate.
Supporting sources
Does an implied condition of survival apply to postponed multiple-generation class gifts?+
Yes. The Restatement provides an exception for postponed multiple-generation class gifts, which are subject to an implied condition that class members survive the distribution date.
Supporting sources
5
Music Hall Destruction Excuses Performance
Isabelle Inman contracted to rent a music hall from Ira Irving for a series of concerts. Before the first performance the hall burned down without either party's fault. Irving was excused from providing the hall and Inman was excused from paying rent because the contract was subject to an implied condition that the hall continue to exist.
Taylor v. Caldwell3 B. & S. 825, 122 Eng. Rep. 309 (1863)
Coronation Procession Failure Excuses Payment
Idris Ives agreed to pay Ivan Ivanov £50 to view the coronation procession from Ivanov's rooms. When the procession was cancelled, Ives refused the balance. The contract was subject to an implied condition that the procession occur, excusing Ives from payment.
Krell v. HenryL.R. 2 K.B. 740 (Ct. App. 1903)
Arbitration Clause Covers Implied Conditions
India Inoue signed an employment arbitration agreement covering claims that termination violated any express or implied condition of employment. When she later sued for wrongful termination, the court enforced arbitration because the clause expressly reached disputes involving implied conditions.
Armendariz v. Foundation Health Psychcare Services, Inc.24 Cal.4th 83, 114 (2000)
Mortgage Moratorium Upheld During Depression
Iris Irons obtained a mortgage from Ironwood Capital. When economic conditions made payment impossible, a state statute extended the redemption period. The statute was upheld because contracts are subject to implied conditions arising from unforeseen public emergencies.
Home Building & Loan Association v. Blaisdell290 U.S. 398, 54 S.Ct. 231, 78 L.Ed. 413 (1934)
Island Manufacturing contracted with Indigo Textiles to install plumbing using Reading pipe. The contractor used equivalent pipe of equal quality. Indigo Textiles refused payment. The court held that the implied condition of exact compliance was satisfied by substantial performance, so payment was due.
Jacob & Youngs v. Kent230 N.Y. 239, 129 N.E. 889 (1921)
Frequently Asked2
When does an implied condition excuse performance in a contract?+
An implied condition excuses performance when the parties must have known from the nature of the contract that performance could not occur unless a particular thing continued to exist. If that thing perishes without the contractor's fault, the contract is discharged.
Supporting sources
Can parties create an implied condition by their conduct or statements?+
Courts examine surrounding circumstances and statements to decide whether property was given subject to an implied condition, such as an engagement gift conditioned on marriage occurring.
Supporting sources
L.R. 2 K.B. 740 (Ct. App. 1903)Contracts
…for the return of his £25 deposit on the ground of total failure of consideration. Darling J. held that there was an implied condition that the procession should take place and gave judgment for the defendant. The plaintiff appealed. The real question in this case is the extent of the application in English law of the…