Martin enters into a verbal contract with Marlowe Ltd. to investigate their operations and their accounting systems, make recommendations as to how to improve them, and help implement the changes Marlowe Ltd. accepts. In the negotiations, Martin makes it clear that he cannot give Marlowe Ltd. a definite timetable and that it is clear that the whole process will take longer than a year. Part of their agreement is that either party may terminate the contract on 60 days' written notice to the other if the work is progressing unsatisfactorily. The agreement that the arrangement can be terminated is
A) a condition precedent.
B) a collateral agreement.
C) an implied term of the contract.
D) a condition subsequent.
E) past performance.

Question

Quizplus · Accepted Answer

The agreement that the arrangement can be terminated on 60 days' written notice if the work is progressing unsatisfactorily is a condition subsequent. This means that the contract can continue to operate unless and until the specified event (unsatisfactory progress) occurs, at which point either party may terminate the contract.

Martin Enters into a Verbal Contract with Marlowe Ltd