Condition precedent meaning

This Checklist This Checklist outlines the main points to weigh up when preparing, reviewing or negotiating a parent company guarantee (PCG) for an employer receiving one. While the terms ‘contractor’ and ‘employer’ are used, the same principles apply to a contractor–sub‑contractor arrangement or to an employer/contractor working with a consultant. As PCGs are commonly bespoke, the specific circumstances must always be assessed. Is the contractor obliged to deliver a PCG under the building contract? If not, there is no duty to supply one and provision will be a matter for negotiation. The contractor may still agree, to reassure the employer about its solvency and commitment to the project, and to create or preserve a constructive relationship with the employer. The employer should also confirm any specific timing for delivery of the PCG—for example, on contract signature, within a defined period after signing, or as a condition precedent to the first payment... Who do you want to be the guarantor?...

This Checklist concerns English law legal opinions customarily delivered by a lender’s solicitors as a condition precedent to drawdown of a loan facility. It proceeds, in particular, on the basis that the facility is bilateral, the lending bank is incorporated in the UK (United Kingdom) as lender, and the addressee of the opinion is the Lender, being the law firm’s client. It further proceeds on the footing that the Borrower is a company incorporated in England and Wales, the transaction documentation, upon which the opinion is given, is governed by English law, and the underlying loan is unsecured, without any security interests being taken. For assumptions typically included where security is granted, or where the transaction has a cross‑border element, see Additional assumptions to be considered where the loan is secured and Additional assumptions to be considered where the transaction has a cross‑border aspect below. It forms part of a set of checklists relating to legal opinions. The other Checklists are as follows: English law legal opinion-qualifications...

Legal Issues General comments This Checklist highlights the principal provisions and matters to consider when drafting and negotiating time of the essence clauses. What to watch out for For a Precedent time of the essence clause with comprehensive drafting notes, see Precedent: Time of the essence clause. For guidance on time of the essence, the exceptions to the general rule, and practical considerations for customers and suppliers, see Practice Note: Time of the essence. Nature of the term: condition, innominate term or warranty Time is of the essence where the parties expressly state that time will be of the essence. If time is of the essence, delay may entitle a party to terminate the contract and to claim damages. Without express wording, time will be of the essence only if it is a condition of the contract. Where the timing provision is interpreted as an innominate term or a warranty, the remedy is generally confined to damages, unless the breach is very serious or...

Original news Interserve Construction Ltd v Hitachi Zosen Inova AG [2017] EWHC 2633 (TCC), [2017] All ER (D) 82 (Nov) What are the practical implications of this case? Although the outcome rested largely on the parties’ bespoke terms, the case underscores the need to examine termination provisions with care both when contracting and before attempting to terminate. It also indicates that, when interpreting the parties’ chosen wording, the court is unlikely to construe it in a manner that fails to give operative effect to expressions such as ‘subject to’. What was the background? Hitachi, the EPC contractor for an energy from waste plant in Worcestershire, engaged Interserve as sub‑contractor. Dissatisfied with Interserve’s performance and delay, Hitachi served a notice under sub‑clause 43.1 of the sub‑contract, invoking grounds (h) and (q). Those grounds provided that, if Hitachi failed to proceed regularly or diligently with the works or committed a material breach: ‘…then, subject to Sub‑Clause 43.1A and without prejudice to any other rights or remedies which’...

DKB v DKC [2025] SGHC(I) 21 What are the practical implications of this case? Addressing the interface between enforcement and stay applications, the decision confirms that IAA 1994, s 6 is not limited to disputes arising before arbitration is on foot; it also supports stays of enforcement steps taken after the arbitral phase has ended. The basis for such a stay is a disagreement about the award creditor’s entitlement to enforce, where that question is referable to arbitration under any post-award agreement. At the same time, the case reminds us that, even if the court will not grant the primary relief of defeating the stay outright, it may give alternative relief by imposing a conditional stay. In the specific setting of enforcement proceedings, the court may condition the stay on the applicant commencing arbitration, a device expressly aimed at countering tactical delay. That sort of condition helps to deter tactical delay and to protect the enforcement of an existing award. The...

X and YCo v ZCo [2024] HKCFI 695 What are the practical implications of this case? The tribunal is not obliged to trawl through all documents and materials to locate the issues; it is for the parties to identify the key questions put to the tribunal for decision. The Hong Kong Courts will give short shrift to parties attempting to overturn awards on matters not addressed in opening and closing submissions for the hearing. Where a list of issues is agreed, parties must ensure every critical point is included, as it is the court’s ‘useful starting point’ when determining what issues were before the tribunal. What was the background? The plaintiffs entered into a Share Subscription and Purchase Agreement (SPA) under which ZCo purchased shares in the company from the second plaintiff (YCo). Upon completion of the SPA, ZCo held 65% of the company’s shares, with YCo retaining the remaining 35%...

Most lending deals involve the use of formal legal opinions issued by counsel. Commonly, they are required as a necessary condition precedent to funding, or before the finance documents are executed and put into effect. The recipient, most often the lender, receives confirmation of specified legal issues connected with the loan transaction at hand. While widely encountered across numerous lending structures, they can be challenging in both legal and practical terms, and should therefore be negotiated and settled at the earliest possible stage of the transaction process, during initial stages of the process itself...

It is essential that parties adhere to the proper process when advancing claims under FIDIC standard contracts. Failure to do so can have serious repercussions, potentially resulting in the claim being time-barred or the claimant’s entitlement being curtailed or reduced. This Practice Note reviews the steps for claims pursued by either Contractor or Employer under the 2017 FIDIC Red, Yellow and Silver Books, with particular attention to the granular procedure prescribed in clause 20.2. See also Flowcharts: Claims under the FIDIC Red and Yellow Books 2017 (clause 20.2), and Claims under the FIDIC Silver Book 2017 (clause 20.2). In the 2017 forms, Employer claims are handled identically to Contractor claims—whereas, in the 1999 editions, Employer claims were governed by their own, comparatively less stringent, framework under a distinct procedural regime then. For commentary on claims under the 1999 Red, Yellow and Silver Books, as well as the Pink and Gold Books, consult Practice Notes: FIDIC contracts (pre-2017 editions)—Contractor claims, and FIDIC contracts (pre-2017 editions)—Employer claims...

Conditions precedent in standard form contracts In many construction contracts, a party looking to pursue a claim under the contract must comply with a specified process as prescribed by the terms. Typically, the claiming party is required to serve a particular notice, which may then be followed by a further notice and/or fuller particulars, on the other party and/or the contract administrator, in a set form and meeting stated requirements as to content and layout. Frequently, these notice clauses also include a so‑called ‘time bar’, meaning the notice(s) must be given within a defined period specified by the contract. Where the time bar is expressed as a condition precedent, any failure to follow the contractual steps results in the claiming party losing its right to advance the claim, regardless of how compelling the underlying case might otherwise be, and even where the claim would otherwise be well‑founded. The inclusion of such time‑bar provisions has become increasingly prevalent, and they now feature in some standard form contracts (see Conditions precedent...

LR1. Date of the lease [ enter the date in full format DD-Month-Year ] LR2. Title Number[s] LR2.1 Landlord's title number [ s ] [ the title numbers from which this lease is granted. Leave blank if unregistered ] LR2.2 Other title numbers [ existing title number [ s ] against which entries relating to LR9, LR10, LR11 and LR13 are to be made ] LR3. Parties to this lease Landlord [ enter landlord's name and address ] Tenant [ enter tenant's name and address ] Other parties LR4. Property Where this clause conflicts with any other part of the lease, then, for registration purposes, this clause shall take precedence. [ enter details of the Property ] LR5. Prescribed statements etc LR5.1 Statements prescribed under rules 179 (dispositions in favour of a charity), 180 (dispositions by a charity) or 196 (leases under the Leasehold Reform, Housing and Urban...

STOP PRESS : Significant reforms to the UK prospectus regime came into force on 19 January 2026 Major changes to the UK regime for public offers and admissions to trading took effect on 19 January 2026. The framework for securities offers and UK market admissions is now chiefly contained in the Public Offers and Admissions to Trading Regulations 2024, SI 2024/105 (the POATRs), together with the FCA sourcebook, The Prospectus Rules: Admission to Trading on a Regulated Market (PRM). The UK Prospectus Regulation and the FCA Prospectus Regulation Rules have been repealed. The reforms aim to simplify capital raising and substantially lessen the circumstances in which a company must publish an FCA-approved prospectus for a further share issue. For full details of the changes, see Practice Note: UK prospectus regime reform. This Practice Note sets out the prospectus regime that applied before 19 January 2026...

This Deed is made on [ insert day and month ] 20[ insert year ] Parties [ Insert name of Chargor ], being a company incorporated in England and Wales, with registered number [ insert company number ], and whose registered office is at [ insert address ] (the “ Chargor ”); and 1 [ Insert name of Security Agent ], acting as security agent and trustee for the Finance Parties pursuant to the terms and conditions set out in the [ Facilities Agreement OR Intercreditor Agreement OR Security Trust Deed ] (the “ Security Agent ”). Recitals: (A) The Finance Parties have consented to provide loan facilities subject to the terms and conditions set out in the Facilities Agreement (as defined below). (B) As a condition precedent to the loan facilities becoming available, the Chargor must execute this Deed for the purpose of granting security in favour of the Security Agent in relation to the Secured Obligations (as defined below)...