Jack gives a mortgage over his home to the Bank of Montreal. The mortgage contract is signed on June 3, 2003. After it is signed, Jack, upon reviewing the terms notices that there is a provision that states that he is to procure fire insurance coverage for the home. This kind of provision is known as a condition precedent.

Question

Quizplus · Accepted Answer

A condition precedent is a condition that must be met before a contract becomes effective or before an obligation must be performed. In this case, the provision is a covenant or obligation within the contract, not a condition precedent.

Jack Gives a Mortgage Over His Home to the Bank