What is a Condition Precedent?

We discussed in-class what a condition present when we were discussing performance, remedies, and breaches of a contract. A condition precedent is a term within an agreement which dictates whether the contract is in effect. It is a future or uncertain event that must occur (or in some cases something that must NOT occur) in order for the contract to take place. 

An example of a condition precedent discussed in lecture was the following scenario:

Someone offers you job with the Charlotte Hornets NBA team and you agree to take the job as long as the organization finds you an apartment to live within the city. They agree to fulfill these terms and tell you that you will start July 1st. As of June 28th, the Charlotte Hornets have not found you an apartment within the city, and so you decide to accept a job offered to you by the Florida Panthers NHL team. 

In this scenario, no contract is in place because the Charlotte Hornets never were able to find you an apartment. Had they found you an apartment, the contract would be in effect making you unable to accept the position with the Florida Panthers. 

Another case scenario we examined in class involved a professional football player named Billy Cannon and the Los Angeles Rams. Billy Cannon was known as the best player in the NCAA in the 1959 season, and was projected to be drafted first overall. The Rams of the NFL were to have a coin toss on November 30th, 1959 (a 50/50 chance) to decide whether they would have the first overall pick. On November 28 and 29, Pete Rozelle the General Manager of the Los Angeles Rams reached out to Cannon over the phone discussing contract terms and wanted to meet with him in Philadelphia. The Rams ended up winning the coin toss and signed Cannon to a contract from 1960-1962 which would be in effect the day after the Sugar Bowl on New Years Day. At the time, Cannon was ineligible to sign a contract because of his amateur status, and was required to play in the Sugar Bowl on New Years Day. Signing this contract would make him ineligible. The parties involved had then decided to keep it secretive. Shortly after on December 22, 1959, Cannon met with Bud Adams of the Houston Oilers. The Oilers were a new team associated with the AFL, the rival league of the NFL. The Oilers had selected Cannon first overall in their draft as well, and offered Cannon a better deal than what the Rams had given him. Billy Cannon accepted the offer the Oilers put on the table for him, and on New Years Day immediately after the Sugar Bowl Game, Cannon signed the contract with the Oilers on live television. The Rams sued the Oilers since they had the first contract with Cannon. 

The courts concluded that Cannon had the right to play in Houston. The condition precedent set out was between the NFL and the NCAA, as NFL teams are unable to sign players to a professional contract until the player completed their NCAA career. The contract could not take effect until Cannon completed his college term. The Rams also went against the NFL's by-laws by negotiating a contract with Cannon prior to the occurrence of the coin toss meaning they did not have the right to the first overall pick yet. The Oilers proposed an offer to Cannon at a time when his contract was not in effect, and had him sign the contract once the Suger Bowl was completed.