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Contracts: Conditions Subsequent, Forefeiture

Part of the difficulty with contract interpretation, litigation and disputes is that seemingly innocuous language can make all the difference in the world. For instance, a “condition subsequent” may bring about the end of a contract. A condition subsequent is language in a contract which may provide for the cancellation of the contract on the happening or non-occurrence of a stipulated event or condition. Reed Stenhouse, Inc. of Mo. V. Portnoy, 642 S.W.2d 947, 952-53 (Mo. Ct. App. 1982).

Conditions subsequent are not favored and are strictly construed by courts. Duncan v. Acad. of Sisters of the Sacred Heart of St. Joseph, Mo., 350 S.W.2d 814, 818-19 (Mo. 1961). Therefore, if a condition subsequent is relied on to work a forfeiture of the contract, the language must be clear and express or arise by clear implication. Id. Words of limitation  such as “upon condition that,” “upon express condition that,” “provided that,” and  “but if'” are commonly interpreted by courts to constitute a condition subsequent. DeHart v. Ritenhour Consol. Sch. Dist., 663 S.W.2d 332, 333 (Mo. Ct. App. 1983).

 

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