When you come across the phrase “the agreement is contingent” during your business dealings, it can be confusing and overwhelming. What does it mean for an agreement to be contingent? In this article, we will define contingency and explain how it affects your agreement.
Contingency, in general, means “dependent on something else.” In legal terms, it indicates that the parties involved in a contract or agreement have agreed to certain conditions that must occur before the contract is enforceable. These conditions are called contingencies, and they can be either positive or negative.
Positive contingencies are conditions that must be met before the agreement can be enforced. For example, if you are buying a home, the contingency may be that the seller must complete certain repairs before the sale can go through. Once those repairs are made, the contract can be executed.
Negative contingencies are conditions that must not occur for the agreement to be enforceable. For example, if you are leasing a property, the contingency may be that the tenant cannot use the property for illegal activities. If they do, the landlord can terminate the lease.
The language “the agreement is contingent” typically indicates that there are unresolved issues that need to be addressed before the contract can be fully executed. These issues may include financing, inspections, or other conditions that need to be met before the parties can move forward.
If you encounter a contingent agreement, it`s important to understand the contingencies involved and how they affect the timeline for the agreement. You should work closely with your attorney or agent to ensure that all contingencies are properly addressed and satisfied before moving forward with the agreement.
In conclusion, when you come across the phrase “the agreement is contingent,” it means that there are conditions that need to be met before the agreement can be fully executed. By understanding these contingencies and working with your attorney or agent, you can ensure that the agreement is properly executed and all parties are satisfied.