A condition precedent is an event that must occur before a party’s duty to perform arises. It is not a promise, and the distinction decides who has breached.

If a term is a promise, failure to perform it is a breach and the other party may claim damages. If it is a condition, failure means the other party’s duty never arose at all — there is nothing to breach, and the deal simply does not proceed.

Contracts routinely blur the two. “Buyer shall obtain financing” reads as a promise; “Buyer’s obligation to close is conditioned on obtaining financing” reads as a condition. The same commercial arrangement, two very different outcomes when the financing fails.

Drafting points: state expressly whether a term is a condition; say who bears the risk if it is not satisfied; and address waiver — whether the party benefiting from the condition may proceed without it, which is usually intended and frequently unstated.

Prevention. A party who causes a condition to fail generally cannot rely on its failure. Good faith obligations attach to the efforts required to satisfy one, which is why “commercially reasonable efforts” appears so often beside them.