SW Legal studies in Business

If No Condition Precedent Exists, It Is Irrelevant to Execution of a Contract
Description Appeals court held that a condition precedent, which one party to a contract contended existed, was not shown to have been part of a contract. Therefore it was irrelevant to the terms of the contract, and could not be relied upon as a defense in a suit for breach of contract.
Topic Contracts
Key Words Condition Precedent; Breach of Contract
C A S E   S U M M A R Y
Facts The Powells operate a hog farm. On their property, Swine Graphics (SG) runs a hog nursery. The two discussed expanding operations. The Powells then began to build a new facility. Neighbors objected to the expansion of the hog operation and SG withdrew from the project. The Powells sued SG for breach of contract. The jury awarded the Powells $111,069 in damages. SG appealed, contending that the Powells' failure to obtain the neighbors' approval for the expanded operation before beginning construction was a failure of a condition precedent.
Decision

Affirmed. "Conditions precedent are those facts and events, occurring subsequent to the making of a valid contract, that must exist or occur before there is a right to immediate performance, before there is a breach of contract duty, and before the usual judicial remedies are available. A determination that a condition precedent exists depends not on the particular form of words used, but upon the intention of the parties gathered from the language of the entire instrument. Nonperformance of a condition precedent will vitiate a contract or proposed contract." The contract here does not mention a good neighbor policy. The issue of unhappy neighbors arose after construction began and SG made no move to terminate the project when the issue arose. Hence there was no condition precedent and the contract was breached.

Citation Powell v. Swine Graphics Enterprises, L.P., 2002 WL 180883 (Ct. App., Iowa, 2002)

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