"Subject To" Contracts
If a contract specifies "subject to contract", it may fall into one of three categories:
- The parties are immediately bound to the bargain, but they intend to restate the deal in a formalised contract that will not have a different effect; or
- The parties have completely agreed to the terms, but have made the execution of some terms in the contract conditional on the creation of a formalised contract; or
- It is merely an agreement to agree, and the deal will not be concluded until the formalised contract has been drawn up.
If a contract specifies "subject to finance", it imposes obligations on the purchaser:
- The purchaser must seek finance; and
- When offers of finance arrive, the purchaser must make a decision as to whether the offers of finance are suitable.
This may also refer to contingent conditions, which come under two categories: condition precedent and condition subsequent. Conditions precedent are conditions that have to be complied with before performance of a contract With conditions subsequent, parties have to perform until the condition is not met. Failure of a condition repudiates the contract this is not to necessarily discharge it. Repudiation will always gives rise to an action for damages.
Read more about this topic: Contractual Terms In English Law
Famous quotes containing the words subject to, subject and/or contracts:
“Parents fear lest the natural love of their children may fade away. What kind of nature is that which is subject to decay? Custom is a second nature which destroys the former. But what is nature? For is custom not natural? I am much afraid that nature is itself only a first custom, as custom is a second nature.”
—Blaise Pascal (1623–1662)
“When a thing ceases to be a subject of controversy, it ceases to be a subject of interest.”
—William Hazlitt (1778–1830)
“Bankers, nepotists, contracts and talkies: on four fingers one may count the leeches which have sucked a young and vigorous industry into paresis.”
—Dalton Trumbo (1905–1976)