Which of the following is a contract with a condition subsequent?
A) Rhonda enters into a contract to buy a new car conditional upon her getting a loan from her bank.
B) Roger bought a smartphone but he may return the phone within ten days and get all of his money back.
C) Susanne and Ethan sign a contract to buy a new home, on the condition that their current home sale is finalized in the next 30 days.
D) All of these are examples of condition subsequent.

Question

Quizplus · Accepted Answer

A condition subsequent is a condition that, when it occurs, can end a party's contractual obligation. Option B describes a situation where the continuation of the contract (keeping the smartphone) is dependent on a condition not occurring within a specific time frame (returning the phone within ten days). If the condition occurs (the phone is returned), the contractual obligation ends, which fits the definition of a condition subsequent. Options A and C describe conditions precedent, where the contract's obligations only begin if a condition is met.

Which of the Following Is a Contract with a Condition