Lucas offered to purchase Baker's snowmobile if he could arrange a loan with the bank for the funds. Lucas and Baker signed a written purchase agreement which did not mention the fact that Lucas did not have the necessary funds in his possession. The proviso "if he could arrange a loan with the bank for the funds" would be a condition precedent.

Question

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A condition precedent is an event or state of affairs that must occur before a duty to perform a promise in a contract arises. In this case, Lucas's ability to arrange a loan with the bank for the funds before the purchase agreement becomes binding is a condition precedent.

Lucas Offered to Purchase Baker's Snowmobile If He Could Arrange