Closing Condition Quote by Charles M. Fox
““Often a condition will be waived and the agreement rewritten to require that it be completed on a post-closing basis. This is often referred to as a post-closing condition—an inaccurate name, as a technical matter, because such a requirement is no longer a condition to performance. Instead, it has been converted into a covenant that one party must perform or else suffer the consequences for breach.””
About This Quote
Source Legal Text: Contract Law Commentary, 2020
A post‑closing condition is actually a covenant requiring performance after closing, not a true condition.
In simple terms: Post‑closing obligations are covenants, not conditions.
Key Takeaway
Treat post‑closing requirements as enforceable promises.
Themes
contract law
covenants
performance
risk management
Mood
analytical
formal
Type
legal
explanatory
When to use this quote
- real estate closings
- mergers and acquisitions
- project handovers
Key Concepts
legal drafting
contractual obligations
Questions to Reflect On
- How does reclassifying a condition affect party risk?
- What safeguards can ensure covenant performance?
A Different Perspective
If the covenant is breached, remedies may be limited.
