William enters into an agreement with Phyllis to advance $300 000 to Phyllis for the purchase of garage equipment.Phyllis agrees to give William a mortgage over her home as security for the advance of the money.The terms of the agreement contain an appraisal provision that the commitment to make the loan is subject to an appraisal of Phyllis' home of at least $350 000.The appraisal provision is known as:
A)an implied term.
B)a warranty.
C)a condition term.
D)a condition precedent.
E)a condition subsequent.

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 appraisal of Phyllis' home being at least $350,000 is a requirement that must be fulfilled before William is committed to make the loan, making it a condition precedent.

William Enters into an Agreement with Phyllis to Advance $300