Condition Subsequent

What Does Condition Subsequent Mean?

A Condition Subsequent is an event or condition that releases a party from fulfilling a contractual obligation, alters the terms or conditions of the contract, or terminates the contract entirely.

Insuranceopedia Explains Condition Subsequent

A supplier may stop sending supplies once a company ceases business operations. A prenuptial agreement might terminate ownership of a property or future interest in it upon the couple’s divorce. A performer may decline to perform unless they receive 50% of their talent fee by the performance date. These are all examples of conditions subsequent.

Insurance policies also contain conditions subsequent. A homeowners insurance policy, for example, may require the policyholder to file a claim within a set number of days after a loss, and failure to do so can release the insurer from its obligation to pay.