When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is typically known as a "conditional contract."
Here's a breakdown to better understand this concept:
1. **Conditional Contract**: In a conditional contract, the obligations of the parties are dependent on certain conditions being met. This means that the contract will only be enforceable if the specified conditions are fulfilled. If the conditions are not met, the contract may become void.
2. **Example**: Let's say two parties enter into a contract where one party agrees to sell a house to the other party, but the sale is contingent upon the buyer obtaining financing within a specific period. In this case, the contract is conditional on the buyer securing financing. If the buyer fails to obtain financing within the specified time frame, the contract may become void.
Understanding the nature of conditional contracts is crucial in legal agreements to ensure clarity and enforceability between the parties involved.
