Also known as: subject to a condition subsequent · subject to conditions subsequent · condition subsequent
Written by attorneys · grounded in primary & secondary sources — see below
A limitation in a conveyance or contract by which the occurrence of a stated event empowers the grantor or obligee to terminate the grantee's or obligor's interest or duty. The interest or duty continues until the power is exercised.
Sierra Santos conveyed Blackacre to Steven Silva by deed stating that Silva would hold the land in fee simple but if the property ever ceased to be used as a family farm the grantor could reenter and terminate the estate. Silva later converted the land to a commercial warehouse. Santos exercised the power of termination and regained possession.
Stella Shapiro received a development permit from a water district on the condition that she dedicate a conservation easement if certain environmental thresholds were later exceeded. When the thresholds were crossed Shapiro refused to dedicate the easement. The district exercised its power to terminate the permit and halted the project.
Select any source to read its text and confirm it supports the definition.
Samuel Soto transferred stock to a trustee for the benefit of Sophia Singh with a provision allowing Soto to revoke the trust at any time. Soto later executed a revocation. Singh's beneficial interest terminated immediately upon the revocation.
Sydney Santos conveyed a building to a medical charity on the condition that it be used exclusively for treating incurables. When the charity began using the building for general medical research Santos's successor exercised the power of termination and recovered the property.
Sterling Manufacturing held property under a deed subject to a condition subsequent that would allow the grantor's heirs to terminate if a particular common-law rule were judicially altered. When the common-law rule was changed by statute rather than judicial decision the heirs could not exercise the power of termination.
A condition subsequent cuts off an existing duty once a stated event occurs. A condition precedent prevents a duty from arising until the event occurs. In the cloud-software contract the continuous outage was a condition subsequent that discharged LaunchPad's duty to pay after the event happened.
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An obligor cannot benefit from its own bad-faith failure to prevent the event. When a temporary regulatory hold was arguably preventable by better monitoring the duty to supply the drug was not discharged because the permanent-halt condition never occurred.
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The grantee receives a fee simple subject to condition subsequent. The estate continues until the grantor exercises the power of termination upon the stated event. The Restatement confirms that such language creates a defeasible fee rather than a fee simple absolute.
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The estate does not end automatically upon the event. Termination occurs only when the holder of the power of termination exercises that power. Until then the grantee remains in possession.
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…the government approves a development permit conditioned on the owner's conveyance of a property interest ( i.e. , imposes a condition subsequent), but also when the government denies a permit until the owner meets the condition ( i.e. , imposes a condition precedent). That means an owner may challenge the denial of a permit on the…