Humber/Ontario Real Estate Course 4 Exam Practice

How can a comparison be made between a condition precedent and a condition subsequent?

1. A condition subsequent can be waived, but a condition precedent cannot.

2. Agreement involving a condition subsequent needs a mutual release, whereas a condition precedent requires termination notice.

3. Removal of a condition precedent relies on third-party approval, unlike a condition subsequent.

4. Agreement forms if an offer includes a condition subsequent, unlike a condition precedent.

The correct answer is: Agreement forms if an offer includes a condition subsequent, unlike a condition precedent.

A condition precedent is a clause or event that must occur before a contract becomes effective or obligations under the contract arise. It essentially sets a threshold that needs to be satisfied for the agreement to take effect. Conversely, a condition subsequent is one that, if it occurs, can terminate or modify an existing agreement. When comparing these two, the statement that an agreement forms if an offer includes a condition subsequent captures the unique role of this type of condition. It indicates that the contract is in force upon meeting the general terms of the agreement, but the agreement can be altered or nullified if the condition subsequent materializes later on. This understanding emphasizes that while conditions precedent must be met before the contract becomes valid, conditions subsequent allow for the initial agreement to exist but introduce potential changes based on future events. The other options misinterpret how these conditions function or create incorrect associations with waivers or mutual releases that do not apply universally across the categories.