A contract or a contractual obligation may be made conditional upon the occurrence of a future uncertain event, so that the contract or the contractual obligation only takes effect if the event occur or comes to an end if the event occurs². Hence, the contract is made dependent upon that future uncertain event such that the event has to take place to provide conclusiveness to the contract. These events when put out in a clear form are termed as “condition”.

A condition can be defined as “The promise of event/state of affairs/performance on whose fulfillment or nonfulfillment the contract or the enforcement of the performance of the parties depends is therefore, the condition in a conditional contract”³ or “some operative fact subsequent to acceptance and prior to discharge, a fact upon which the rights and duties of the parties depend”. These connote condition as an undertaking by both or anyone of the parties.

The employment of these conditions has lead to some general principles which can be used for drawing a conclusion:

We shall see that the undertaking, though largely taken up through express terms, can also be implied or construed from the nature of performance or other terms of the contract.

The construction can be different across the world due to domestic laws and difference in judicial application of those laws.

The word “condition” has two connotations in the law of contract and it is sometimes used in a very loose sense as synonymous with “term,” “provision,” or “clause”⁶. Therefore, it is often mixed up with the ‘condition’ stipulation of the contract.⁷ Consequently, we need to discern and differentiate the ‘condition’ stipulation from a condition of the conditional contract. A ‘condition’ stipulation is the main purpose for which the contract is entered into while the word ‘condition’ may be used to describe some fact or event, on the existence or occurrence of which the some or all of the rights and duties under the contract are made to depend.⁸ A further difference also arises between them in result of breach. While the breach of a condition leads to only non-existence or discharge of the contract, the breach of a ‘condition’ stipulation entitles the other party to damages.⁹

A condition must also have an impact on the operative part of the contract; else it is only a promise. A promise is made by one of the parties to create a duty or disability for the other party and its breach results in breach of the contract and a claim to damages. A condition differs since it discharges the duties until the time of the event and its breach does not repudiate the contract.¹⁰

The events laid down by the parties as conditions for a contract may differ based on time. The event may precede or be subsequent to the legal relations of the parties. The former is called suspensive and the latter resolutive.

For suspensive conditions, the obligations of the parties to perform their part of the contract are suspended until the condition on which the contract depends is fulfilled. The performance becomes due only when the condition is fulfilled. If the condition is not fulfilled then the contract does not come into existence¹¹ or the parties are discharged of their obligations.¹² While for resolutive conditions, the respective obligations of the parties herein are to be fulfilled after they agree to enter into a contract but they can still be made to retract their performances and the contract dissolved, on the happening of a specified event. It provides the party the right to take back.¹³ This condition may also be used as an escape clause where one of the parties terminates the contract on the non-fulfillment of an event decided upon.

The merchants and traders may use the conditions in unconventional and convenient forms. Succeeding forms are examples of the same created through observations.

In some cases the terms and the conditions of the contract or the fulfillment of the performance of one of the party is completely dependent upon the will of the obligor. There are no obligations upon the parties to perform their part nor can a contract be enforced if the obligor does not intend to.

However, in certain cases, this discretion may depend upon a factor outside the control of the obligor and therefore, the condition may seem to be operating within the hands of the obligor but actually depends upon the factor which may prevail even against the discretion of the obligor.

The companies or parties who enter into transactions for a prolonged period of negotiations may formally acknowledge on a pre-determined date all the conditions precedent as satisfied due the complexity and huge amount of transactions. In general course, this is followed by a statement which clarifies that no condition precedent prevails after this date and if it does it is hereby waived.¹⁴

It is essential for a party to a contract to understand whether the condition drafted is precedent or subsequent to the contract in order to ensure the suitability for their performance. The time for the particular legal relation must be juxtaposed the purpose since there are no independent specifications and the nature of the condition has to be determined by the intention of the parties. If the term is specified to be a resolutive condition then it cannot be made a suspensive condition even by a letter of acceptance exchanged between the parties.¹⁵ The same words, however, can be used to create a suspensive or resolutive condition but it is important to understand which condition is proposed to be inserted by the parties.¹⁶ If intention of the parties cannot be made out, the court leans towards the latter and assumes it to be a resolutive condition.¹⁷

Conditional contracts and rules regarding their operations have been ordained a long time ago based on the practices prevailing at the time. All countries have their legislations with a degree of commonality due to generally accepted practices. However, the cultural sociology and dynamic nature of the societies makes the laws inconsistent since the legal framework of a country is in accordance with the society and the laws.

The private laws of the country have prevailed in the respective countries. In case of dispute in a transaction, it is handled by the appropriate authority of the country. The problem, however, arises in cases of dispute of international transactions where the appropriate jurisdiction and law applicable has to be chosen. Since there’s variability in these laws, it may pose a threat of injustice to the parties. This may inhibit the increase of international transactions by the apprehension in the minds of the merchants, traders and organizations.

Through globalization we seek to diminish this variability. Various conventions and international bodies have taken up this task to ensure uniformity across the world and have been successful due to the increasing awareness about the smooth functioning caused due to uniformity. For the development of a common code to govern such transactions, there’s a need to dwell in to the history of the countries in order to understand the functioning of laws according to the respective country and shape the international law accordingly.

The British law on sale of goods dates back to 1893 (first drafted). However, with the increasing complexities and the need to amend and repeal the obsolete laws it was brought out again in 1979. The British law is a highly developed and well reputed law for governing the commercial transactions. Its reputation can be signified by the fact that in many cases of international contracts, the parties resort to the English law for their resolution. The jurisprudential clarity provided by the law and their application by the courts will thus, be helpful for our purpose.

The Commercial Transactions in Britain are currently regulated by the British Sale of Goods Act, 1979 under which a contract of sale may be absolute or conditional. As provided under Section 2(3)¹⁸ a contract is conditional when it is dependent on a condition precedent for coming into existence. An example for the same is that it may depend on a contingency and the obligations of both parties may be dependent on the happening of some specified event such as safe arrival of goods, or on the placing of a firm order by the buyer. The non-fulfillment of such conditions gives no right of action to the other party, but such party is discharged from liability. A contract may also be conditional in the sense of being dependent on a condition subsequent. This can be seen when there may be an actual sale passing the property to the buyer but subject to defeasance on an event.¹⁹

Through analysis of the texts in this field, distinction is made in conditions differentiating them as promissory or non-promissory. “A condition may be defined as a promise, as to fact or as to future conduct, which forms an essential term of the contract”²⁰ in cases of a promissory condition, while for a non-promissory condition “A condition may be referred to as a contingent condition.” The breach of a promissory condition releases the innocent party from performing and allows to be compensated with the amount suffered as damages. When a Condition is non-promissory it may have an effect in the following three ways:

The law in Britain is therefore, comprehensive in nature and makes an effort to provide a holistic view of these types of contracts.

The precedents from history help us gain clarity on instances of unclear condition application of laws to the particular set of facts. With all the theoretical aspects being provided by the legislation, there is still a void or a gap to be filled by the judiciary because the condition, even though well drafted has to be applied with respect to the facts of the particular case. A contract may be conditional in an implied manner where the intention of the parties is assumed although not stated in the contract.²² In the judgment of Jackson v. Union Marine Insurance Company²³, Bramwell B. introduced the concept of a conditional contract where the condition arose out of an implication of reasonable time. Reason and good sense require time to be construed as a condition. It was provided that, when the performance of one party is dependent upon the fulfillment of a certain requirement, then it is a condition precedent.

The ship of a party had to reach the location on time for loading while the performance of the other party was dependent on the ship arrival on time. The ship reaching on time was, therefore, a condition precedent. The ship suffered a mishap and underwent repairs and did not reach the location on time. The performance of the other party dependent upon the ship reaching on time could no longer be carried out. The contract came to an end in a commercial sense.

Bramwell B. mandated that since this implication is,

it must be necessarily be treated as a condition which has to be fulfilled on the part of either one or both of the parties. Bramwell B. further stated that, it was a condition precedent as well as an agreement for the contract and if it was not satisfied then not only does the party have a right to cause of action but the party is also discharged of its contractual duties. However, for this there will be no cause of action arising for the other party if the delay is not due to a default by the party. ‘Perils of the sea’ were expressly exempted in the terms of the contract in this case. If owing to these excepted perils the ship does not reach on time, there will be no cause of action for the other party but the party is absolved of its obligations.

A condition precedent if not fulfilled, the contract would not come into existence but the condition can be waived off by an external factor²⁴ and there lies no need to fulfill the conditional obligation. An instance of this in the Divisional Court was when, Lord Reading C.J., Darling and Lush JJ came across the case of In Re an Arbitration Between Shipton, Anderson & Co. And Harrison Brothers & Co.²⁵ where it was held that, when in the terms of the contract, the seller reserves the right of disposal of the goods until certain conditions are fulfilled, the contract is conditional. The final judgment of the case exempted the sellers from performing their duty to transfer the wheat as the same had been requisitioned by the government before the delivery had been made. The Court held that it had become impossible for the sellers to perform their part because the goods were specific in nature.

We look at the first of two questions presented before the Court which was “Whether the wheat sold passed to the buyers under the contract?” for our purposes. For answering this question, the need was to find out whether there was a term proposed by the seller upon which the promise of the seller was dependent. If not, then the sale was absolute and the wheat had transferred to the buyers. While if the answer is ‘yes’ then the sale was conditional and the property had not passed from the seller to the buyer. The facts of the case state that, it was expressly mentioned by the seller he will dispose the goods only if payment was made in cash within seven days of the transfer order. The right to disposal of the goods would mean that he will retain the wheat’s possession and the possession would in turn mean the retention of the delivery order. This meant that the seller put up a condition which had to be fulfilled by the buyer. Since, before the payment was made the government had requisitioned the wheat, the transfer did not take place as the condition could not be fulfilled as it had been waived off.

A contract may also be dependent upon a future promise made by one of the parties based on promissory conditions. The position on this point was clarified by the judgment of Head v. Tattersall²⁶, where the defendant auctioneer sold his horse to the plaintiff in an auction with a condition in the auction catalogue according to which the plaintiff, could disapprove the sale by returning the horse to the defendant and if not then the contract of sale would be final even if there was a fault in the horse. The condition on which the act of the plaintiff relied was that ‘the horse had been hunted with the Bicester hounds’. The plaintiff returned the horse before the stated time when he found that the horse, as a matter of fact, not been hunted by bicesterhounds.

The issue in contention in this case was not regarding the validity of the condition but whether the condition would subsist even if the goods, as in this case a horse, get damaged/ injured and no longer conform to the goods described. In normal circumstances, this condition would have acted as a condition subsequent where the property would be revested in the seller and the contract dissolved. But, here horse got injured after the sale and before the return without any fault of the plaintiff.

The Court of Exchequer held that the plaintiff would not lose his right to return the horse because of the injury, which meant that this would not affect the condition and the contract would be dissolved.

Harling v. Eddy²¹ is another case law which educes clarity on this point of law. The defendant sold his unfit heifer in an auction to the plaintiff on the promise that he would take it back if anything is wrong with the heifer. The defendant paid no heed to the plaintiffs efforts to contact for returning the heifer on the basis of his underperformance. Subsequently, the heifer died. When plaintiff claimed, the defendants contended that the statement was a merely a warranty (which were excluded from bringing a cause of action) and not a condition. However, the promise made by the defendant was construed to be a condition and not a ‘warranty’ stating that the intention of the defendant’s statement had to be seen in order to construct a statement as a condition or a warranty. In this case, the defendant’s promise to take back the heifer on being unsatisfactory of any of his claims, acts as a term on which the performance or the actions of the plaintiff relies. The plaintiff might not have bought the heifer without these claims because as has been mentioned in the facts, the heifer was visibly unfit and nobody was willing to buy her. Time of the disapproval of the goods was also put to question as to -whether the condition could be suspended after a use of three months. According to the judgment, the duration of time cannot be considered to be unreasonable because the yield of milk had dropped gradually and significantly in the due course of time which wasn’t the case earlier and also the indigestion as diagnosed by a vet was incapable of being treated. Since the heifer was already dead at the time of the judgment, the plaintiff was accordingly awarded damages.

With the help of the guiding statutes and the application of these statutes by the courts we have an idea about the history of conditional contracts in Britain. The aim of these contracts is to facilitate the smooth functioning and transfer in transactions which are not immediate. The regulations laid down, although, are subject to reasonability and cannot be enforced when the promise on which the contract or performances of the parties is dependent is not fulfilled or the same is waived by the party.

To move further, we look at the guidelines adopted by the majority of states in United States of America under a uniform act for the sale of goods and commercial transactions. The act is a comprehensive modernization of the various statutes prevalent in the different states within their territory. This uniformity was brought by the legislators in America with the purpose of simplifying the increasing complexities and disputes in a contractual relation. It is obvious that although there is uniformity in the legislation but there are structural differences within the state and it makes it necessary for us to scrutinize the operations of this contract in this jurisdiction.

Article 1 and 2 Uniform Commercial Code of 1952 deals with sale of goods and commercial transactions under. The code is merely a recommendation and not mandatory for the states to adopt. Section 2-106 (1) of the code describes the “Contract for sale” which includes both a present sale of goods and a contract to sell goods at a future time.²⁸ This agreement to sell at a future time can be construed as based on a condition which if fulfilled will make the contract existent.²⁹ The conditions, according to the practices, can also be classified as suspensive or resolutory conditions. In the former obligations takes effect only when the event happens, while in the latter, contract is defeated if an event does not happen. However, these conditions are only a limiting or modifying factor and create no right or duty by themselves and should be differentiated from a promise.

They may also be classified as condition precedent or subsequent. In a condition precedent the condition may be precedent either to the existence of the contract or the performance of the parties. The liability of a party is sought to be defeated or annulled in cases of non- fulfillment of a condition subsequent. The non-fulfillment may be a failure by one of the parties. Condition subsequent are rarely used by the parties to a contract.

Where the condition precedent is to be performed mutually by both the parties, then the same can be said to be concurrent conditions.³⁰

The basis for constructing a condition in a contract is the intention of the parties to suspend the obligations or completely divest them in case a certain event happens. Particularly in case condition precedent, which is used more often than the other, the intention is to approve or negate an event. The party may not be able to perform the obligations if the condition is not fulfilled and therefore, he may prove the implication of condition by providing an evidence to prove the necessity of the condition. The appellate division of the Supreme Court of New York faced a question regarding the admissibility of parol testimony, in the case of Tropical Leasing Inc. v. Fiermonte Chevrolet, Inc,³¹, to prove the condition precedent for a contract, in order to make it binding.

The plaintiff through his agent agreed to buy an already on order “Indy Corvette” by a previous customer and made the payment for the same. Subsequently, he came to know about the delivery of the same car to that customer and filed a suit against the defendant for violation of the contract. It was claimed by the defendant that the agreement was subject to a condition of non-acceptance of the previous customer, i.e, only if that customer refused to buy the car, this contract would come into force. This was questioned by the plaintiff stating that there was no written agreement indicating this condition. Here, the defendants filed parol evidence and its acceptability came into question. The Court decided that the parol evidence can be used to make the condition as effective as it would have been if it were present in the written agreement because the contract was ambiguous as to the intent of the parties. However, this is only possible to the extent where the condition does not negate or contradict the express terms of the contract and also should not be of a nature which would have been normally printed on the order. The reason is that this would completely change the nature of the contract by including a term contrary to the intention of the parties.

On the grounds of contradiction, the plaintiff asserted that the ‘Merger Clause’ in purchasing order, which mentioned that the agreement would cancel and supersede any prior agreement, was negated by the parol evidence. However, the correct view as put forward by the Court was that, the agreement was based on a condition precedent according to which, the contract will only come into existence on the non-acceptance of the previous customer. Since the necessary condition wasn’t fulfilled, the contract was never entered into and the merger clause wasn’t a part of the agreement.

Based on similar lines, the case of Hunt Foods and Industries, Inc. v. Doliner³² included an option to buy the stock given by the defendant to the plaintiff when there was a period of recess in the negotiation between the two, because of them not coming to an agreement on several important items including the acquisition, for the acquiring of the assets. The reason for the option was plaintiffs concern of defendants using their offer to solicit higher bid from a third party.

The question in this case arose on the enforceability of the agreement made to sell stocks. Defendants contended that the agreement was a result of the fear of the plaintiff and was only agreed upon by them to assure the plaintiffs that no other bid would be taken by them for the taking over of the assets. According to them, the agreement was to become unconditional only if the defendant had agreed to sell the assets to a third party. The initial agreement works as a condition for the subsequent agreement. The plaintiff, on the other hand, maintains that this was a separate agreement with no conditions expressed.

Section 2-202 of the Uniform Commercial Code, which talks about Parol Evidence rule³³, was used to understand whether the parol evidence can be used to prove the existence of the condition. As laid down for a condition to be proved:

They state that when an additional oral term is proposed, it will considered to be a condition unless it is precluded as a matter of law or is factually impossible. As a result, the plaintiffs claim wasn’t valid in this case and his suit for specific performance of the subsequent agreement was denied. It is therefore possible to showcase the implication of a condition subsequent to the contract formation.

The concept of condition precedent has been discussed in detailed theory; however, the operational aspect of these conditions is slightly different from the theoretical aspect. They can be used in various ways. Denning L.J. has excellently clarified the ambiguity on, the two different ways in which condition precedent operates. He states that the term must make either

In his judgment in Trans Trust S. P. R. L. v. Danubian Trading Co.³⁴ Ltd where Denning L.J. provided that, the damages in case of breach of such a term would only include the amount of nominal damages i.e, the amount which could reasonably be foreseen by the parties when they agreed upon the terms of the contract. If there was such a term which could have been foreseen as a condition on which the obligations were dependent, then damages can be claimed for such a happening. The buyer defendants had agreed with the seller plaintiffs, who had further agreed with the Belgian S.A Azur Corporation for the delivery of the steel to be sold. This Belgian Corporation eventually, had the option to buy from the manufacturer of steel. An option to buy herein meant that this corporation had the opportunity to sell the steel at any time, but it was agreed that the defendant had to make the payment in cash through the opening of banker’s confirmed credit in favour of S.A. Azur’s which would in turn provide creditworthiness to the corporation to claim the option to buy. The opening of the credit was dependent upon Leland Corporation, an American corporation to whom the defendants were to further sell the steel. Such a condition was put up because none among the plaintiffs, defendants or S.A Azur had enough funds to ensure the delivery of the steel. All the transactions were therefore, entirely dependent upon the opening of the credit. This made the opening of credit, an implied condition to which the parties had agreed. The letter of credit was however, never provided and defendants repudiated the contract. The plaintiffs came up with the claim for their contract, as they had suffered the loss of profit provided the market price at that time was much more than the contract price and were now not under an obligation to perform their part of the contract. In addition they also claimed to be indemnified for the amount; the Belgian Corporation could make them liable to pay. In this context, Denning stated that this condition was an example of the latter of above provided types of condition precedent since the parties had agreed upon the terms and the contract entered into, but the obligations were still pending as the defendants although they deny, had promised for the opening of the credit.

Thus, we see that the construction by merchants in America has taken place in different forms some of which have been unknown to the other jurisdictions but the application of laws has been much in accordance with the generally accepted principles.

We finally come to the Indian jurisdiction which has adopted its law on sale of goods from the British jurisdiction (1893). Although not expressly mentioned, ‘contract of sale’ has been made corresponding to the agreement to sell under British law. There has been a sincere attempt by the drafters of the act to make a distinction between sale and an ‘ agreement to sell ’ under the act as the Indian law clearly makes a clear distinction between contract and agreement under the sub-sections (e) and (h) of section 2 of Indian Contract Act 1872. It will be consequently important to note these conditions operate differently when used by the merchants in India.

Initially governed by the Indian Contract Act, 1872 the sale of goods is at present regulated by the Sale of Goods Act which was repealed from the said act and given a separate form in 1930. Section 4(2) of the act provides that a contract of sale may be absolute or conditional³ The sale may be conditional when enforceability against one or both parties depends upon the performance or fulfillment of some condition, and conditions may be either contingent or promissory. These conditions are classified as follows:

Contingent conditions can be defined as the promise of one or both parties to a contract may be dependent upon the happening of an uncertain event or upon the existence of a state of affairs at the time when performance is due, or upon the existence of a state of affairs not within the promissor’s knowledge at the time of the making of the contract without there being any promise or statement by him that the event will happen or the state of affairs will continue. If the event does not happen, or the state of affairs does not exist or continue, the promise cannot be enforced against him, and the other party is relieved from further liability, though he has no right of action for the breach of the promise. Contingent conditions can be further classified under:

While in case of a promissory condition the obligation of one party to perform his promise is dependent upon the performance by the other party of his promise and that promise may take the form of a statement which he must make good, as well as of a promise to do something in the future. The promise to be performed or the statement to be made good is a promissory condition and its non-fulfillment not only relieves the other party from all his obligations under the contract, but may also give him a right of action.³⁶ A very basic model of this can be seen in the case of M/s. Oriental Trading Corporation and another v. State of J&K³¹. An offer to buy was made by the petitioner to which the respondent seller had agreed based on certain conditions. These conditions could be seen to be operating as conditions precedent. The petitioner was bound to comply with the conditions in order for the agreement to complete and the agreement to sell to transform into sale. The respondent listed the following conditions for the selling of 1200 Kgs. pierced cocoons @ 37.31 Rs./kg:

Petitioner 1 appointed Petitioner 2 as his agent for the compliance with the conditions and intimation for the same was made to the respondents. The said agent paid the amount of Rs. 7500 for the C.D.R to be prepared. The amount in full was also paid to the respondents and was deposited by them in the government treasury. But in the absence of the agent, the person preparing the C.D.R embezzled the amount and the goods weren’t lifted from the office of the respondents. The respondents, as a result, refused for the fulfillment of the agreement claiming it to be nonexistent. The petitioners, on the other hand, contended that property in the goods had already passed when the payment for the same had been made and that the respondents cannot now refuse delivery without providing compensation. They argued that they had complied with the condition of C.D.R amount but it was an action of the a third party which led to the non-fulfillment of the said condition and they should not be held responsible for it.

The Court settling the position from the apparent facts stated that: “Promise of one or both parties to the contract is dependent upon the happening of certain events or coming into being of a state of affairs and the time from which performance of the agreement can be claimed.”

As a result the agreement cannot be enforced and the petitioner can claim back the amount paid in furtherance of the agreement. Although the offer was accepted but the attached conditions were never fulfilled by the petitioner and, therefore, the title as claimed by the petitioner had not passed owing to the non-fulfillment of the conditions. Thus, such promises show the intention of the parties which is essential for the application of these conditions. The assumption here is that a term or a condition put in the contract is intended to be fulfilled. When the obligation is not expressly mentioned but can be constructed from the nature of the contract it is treated as a condition. Jagannatha Shetty delivering the judgment in Venkateshwara Minerals & Ors. v. Jugalkishore Chiranjitlal³⁸ reiterated this observation. The defendants in this case when entering into the contract to sell to the plaintiffs 6000 tonnes of Red- oxide agreed to certain terms as mentioned in the proposed contract. The matter was first taken to the trial court by the plaintiff claiming that the contract had not been fulfilled by the defendant within the stipulated time period in the conditions put up and now they were bound to return the amount paid by them for the anticipated performance. The defendants, on the other hand, claimed that time even though being an essence was waived away by the plaintiffs and that the performance of the defendant i.e, the delivery of the red-oxide was based upon the requisitioning of wagons by the plaintiffs. They resisted the repayment of the amount paid stating that breach was made by the plaintiffs. The plaintiffs, in reply, contended that the requisitioning of wagons was subject to the analysis of the red- oxide and geological permit to be acquired by the defendant.

The Court taking into consideration these contentions and after construing the intention of the parties from the terms of the contract pointed out that the term of analysis and acquiring of permit by the defendant were necessary for the requisitioning of the wagons which would have further facilitated the fulfillment of the contract. This could be seen from the following two conditions as mentioned in the terms and conditions of the contract:

“Stocks shall be sampled and analysed by Essen & Co. and analysis certificate and geological permit shall be produced by the sellers before loading.”

“If on analysis the results are below 96% Ferric Oxide, a penalty of Rs. 2.50 per unit upto 94% shall be paid by the defendant and below 94% plaintiff had the option to reject the goods.”

These terms could be construed as a condition precedent for the performance of the plaintiff i.e, the requisitioning of the wagons as the non-fulfillment of the required quality after the analysis could also lead to the repudiation of the contract. The probability of repudiation and the unreasonableness of the repudiation after the goods are in transit are proofs of these terms being a condition precedent to the performance of the plaintiffs. From the facts, it could be made out that the defendant, firstly, although had obtained the certificate of analysis he hadn’t renewed it and secondly, the information regarding the obtaining of the geological permit wasn’t intimated to the plaintiffs. Therefore, the defendant hadn’t complied with the said conditions and was bound to repay the amount as a result of the repudiation of the contract.

It can be seen here that the contract was mutually conditioned in a way that one condition was dependent on the fulfillment of the condition to be fulfilled by the other. Therefore, these can be said to be concurrent conditions. In such contracts, the performance of both the parties are interdependent, therefore, when one party fails to perform his/her obligation, the other party can be relieved of his obligation. The case of MacKay v. Dick³⁹ helps us understand such a scenario. The seller had agreed to sell to MacKay, who was a contractor for the railway line, for a steam excavating machine. It was decided that, after the manufacturing of this machine it would have to prove its capability which would determine the fate of the contract. The capability had to be tested on the basis of the amount of yards which could be dug in by the machine in a day. Delivery was made to the buyer for the contract to be entered into. With the delivery the title had also passed to the buyer. The only case in which the contract could be repudiated was by the incapability of the machine to dig up the necessary yards in a day. The machine, however, could not be tested because the buyer could provide the open faced railway cutting which was necessary for the test. In this way, the machine was accepted without conducting any test. But subsequently the buyer faced a problem with the machine and approached the seller claiming that the machine was flawed and the contract not conformed with. To this, the seller replied by stating that it was the duty of the buyer to test the machine at the said place and time and the sellers were under no obligation now.

The Court laid down the principle of waiving of condition known as Mackay v. Dick principle clarifying that the condition is deemed to be satisfied if the non-fulfillment of the condition or the term in the contract was due to prevention by the buyer. The facts clearly manifest that the inability of the buyer to provide the open faced railway cutting prevented the test of the machine. The Court referring to the implied duty under engineering contracts expressed that the buyer was under an obligation to provide the situation to fulfill the condition of capability and the this non-compliance has, therefore, waived the condition and the contract cannot be repudiated now.

The Courts have therefore been constructive in their approach towards determining the condition in the sale of goods’ transactions and we infer the fact that for analyzing the conditions in the contract we need to know the intention of the parties.

Although the source of provisions in the above-mentioned jurisdictions is different, their operations are the same. Upon the analysis of the interpretation in these jurisdictions it is clear that these conditions operate with the aim to provide uniformity and ensure that good faith is being exercised by the parties. The clauses in the contract are to be construed as a condition in such a way that they help achieve the intended aim of the parties. The intention, however, has to relate back to the time of formation of the agreement. It cannot be changed even if both the parties provide for an event contrary to the initially agreed upon terms. Consequentially, it becomes the duty of the court to interpret and lay down the general principles governing the working of these conditions. In this way, the courts provide certainty to the operations of the conditions.

All of the jurisdictions attempt to be in consonance with the generally agreed upon practices. Therefore, with the aim of certainty, the operations in different jurisdictions ensure uniformity. This certainty, as seen from the analysis, is commonly based on the principles of reasonability and good faith to ensure fair dealing and put a burden of duty upon the parties to co-operate with each other. The operation must be such that it is beneficial from the standpoint of both the parties to the contract. The complex process of negotiating these clauses is, thus, simplified by these integrated and generally practiced principles.

From the application of municipal laws in these jurisdictions, it can be seen that they do not comprehensively regulate the actions of the parties and there is still a void left for the judiciary to fill in cases of dispute. With the increasing desire for international acceptability, there has been formation of various conventions and principles such as Vienna Convention on International Sale of Goods, Principles of European Contract Law, INCOTERMS, UNIDROIT principles. With the internal legal system being incomplete to wholly regulate the measures taken by the parties, the jurisdictions should resort to the provisions in these conventions to ensure consistency in interpretation and lay down guidelines to prevent disputes. The history of these different municipalities helps these international bodies to understand and regulate the practices.

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