# Conditions Subsequent

Source: https://contracko.com/clause-library/conditions-subsequent

# Conditions Subsequent

Make a contract end automatically if a defined future event occurs.

## What it is

A condition subsequent is a defined future event whose occurrence ends an existing obligation by operation of the contract, for example failure to secure financing or a permit being refused. Until the event occurs, the contract is fully effective.

## Why it matters

Conditions subsequent let parties commit now while keeping a clean, automatic exit if a key assumption fails. They avoid the need for a termination dispute: the contract simply unwinds when the condition is met.

## How to apply it

- Describe the triggering event precisely and the deadline by which it must occur.
- State who may invoke the condition and within what period after the event.
- Distinguish a condition subsequent from a condition precedent (opschortende voorwaarde).
- Address the unwinding: restitution of payments and return of any deliverables.

## Negotiation tips

- • Set a clear cut-off date so the contract does not stay in limbo indefinitely.
- • Limit who can invoke it to the party the condition is meant to protect.

## Common pitfalls

- • Confusing a suspensive (precedent) with a resolutive (subsequent) condition.
- • Leaving the trigger vague, so it is unclear whether the condition has been met.

### How Contracko helps

Contracko tracks the deadline by which each condition subsequent must occur, sending reminders as the cut-off date approaches. Its AI analysis extracts the triggering event and any invocation period from the clause, so responsible teams are alerted in time to assess whether the condition has been met and whether to invoke it.

## Legal references

- [BW 6:22 Effect of conditions Dutch law](https://wetten.overheid.nl/BWBR0005289)
- [BW 3:38 Conditional obligations Dutch law](https://wetten.overheid.nl/BWBR0005291)

Unless marked otherwise, references are to Dutch law (Burgerlijk Wetboek, the Dutch Civil Code); EU instruments such as the GDPR apply across the EU. This is general information, not legal advice. Other jurisdictions treat these concepts differently. Verify the current text and your situation with a qualified lawyer.

## Relevant for

[Commercial Real Estate](https://contracko.com/industries/commercial-real-estate)[Financial Services](https://contracko.com/industries/financial-services)[Construction](https://contracko.com/industries/construction-industry)[Manufacturing](https://contracko.com/industries/manufacturing)[Consulting](https://contracko.com/industries/consulting)

## Related clauses

- [Termination for Cause Clause](https://contracko.com/clause-library/termination-for-cause)
- [Termination for Convenience Clause](https://contracko.com/clause-library/termination-for-convenience)
- [Renewal and Notice Period Clause](https://contracko.com/clause-library/renewal-and-notice)
- [Letter of Intent (Heads of Terms)](https://contracko.com/clause-library/letter-of-intent)

## Related terms

- [Rescission](https://contracko.com/glossary/rescission)
- [Termination](https://contracko.com/glossary/termination)
- [Breach of contract](https://contracko.com/glossary/breach-of-contract)

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## Frequently asked questions

Common questions about this clause.

- **Q:** What is the difference between a condition precedent and subsequent?
  **A:** A condition precedent suspends the contract until an event occurs; a condition subsequent ends an already effective contract when the event occurs.

- **Q:** Does the contract end automatically when the condition is met?
  **A:** In principle yes, with retroactive effect, though the parties may agree it must be invoked within a stated period.

- **Q:** Can a party rely on its own failure to prevent the condition from being met?
  **A:** No. Under BW 6:23, a party that in bad faith prevents the fulfilment of a condition is treated as if the condition had been met.

- **Q:** Are payments already made before the condition is triggered recoverable?
  **A:** Yes, in principle, because the condition has retroactive effect. However, the parties can agree to limit or exclude retroactivity for payments already made or services already performed.

- **Q:** Can multiple conditions subsequent be included in one contract?
  **A:** Yes. Each should be defined separately with its own trigger, deadline, and invocation right, so the parties always know precisely which condition has fired and what the consequence is.

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