Conditions precedent

Conditions that must be satisfied, or validly waived where legally and contractually permitted, before a transaction closes.

Conditions precedent in practice

Hypothetical: a signed transaction awaits required competition clearance. The parties cannot simply waive a legal regulatory requirement. The long-stop date, termination rights and other contract provisions also govern how long they remain committed.

Typical conditions
  • regulatory clearance
  • lender consent
  • a required third-party approval

Material adverse change · SPA / definitive agreement · Earn-out · Due diligence · Long-stop date · All of the glossary