If a contract states that the contract is "subject to the purchaser obtaining financing for $10,000 at 8% by 5:00 p.m. Friday, March 11," it means that
A) if the purchaser does not obtain the financing, he is in breach of contract.
B) if the purchaser does not obtain the financing, the contract is frustrated.
C) if the purchaser does obtain the financing and properly notifies the seller, the contract is then in full force and effect.
D) there is a contract whether the purchaser gets the financing or not, because the statement is just a statement of intention and doesn't affect the contract.
E) the obtaining of financing is a condition subsequent and ends the contract.

Question

Quizplus · Accepted Answer

This statement in the contract acts as a condition precedent, meaning that the contract will only be in full force and effect if the purchaser obtains the financing as specified. If the purchaser secures the financing and notifies the seller accordingly, the condition is met, and the contract becomes fully effective.

If a Contract States That the Contract Is "Subject to the Purchaser