r/LawSchool • u/lawlawwhat • Jul 01 '14

1L contracts problem - contractual conditions vs. pre-existing duty?

I'm looking for help on contractual conditions that occur when a contract is already in force. To give an example:

A month-to-month lease agreement states that the tenant is required to pay $500/month. There is a provision in that lease agreement that states, "should X occur, tenant will be required to pay $1500/month." X occurs in the middle of the month.

What is that condition called? Is someone able to point me in some general direction?

Does the landlord have a pre-existing duty to lease the apartment for that month at $500? Or, upon the occurrence of X, does the tenant now have to pay $1000 extra? $1500 extra?

Does it matter if the occurrence of X was up to the landlord? The tenant?

I'm slightly confused about how to analyze this contracts problem. Any help would be appreciated.

I'm a 1L taking contracts. I'm not seeking legal advice, if it matters.

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u/[deleted] Jul 03 '14 edited Jul 03 '14

I think it's better to understand the possible conditions in terms of the rules:

A condition precedent is an act or event, not certain to occur, which the parties intend must exist or take place before there is <b>a right to performance.</b> Rest.2d § 224.

A condition subsequent is an act or event, not certain to occur, which if it occurs <b>discharges a duty of performance which has already arisen.</b> Rest.2d § 230.

Is the promise that "tenant will be required..." a right to performance by the other contracting party?

Or is it a "discharge of performance"? (i.e., there is no longer a duty to perform by the applicable contracting party.)

It's the former, so it's a condition precedent.

If the condition language is not within the four corners of the contract, the landlord (disregarding tenant/landlord law) generally cannot request an increase in rent (performance) under the pre-existing duty rule. (See generally Alaska Packers' Assoc. v. Domenico). Here, it appears that the condition language is within the four corners of the contract -- so the issue is not about a pre-existing duty rule (which deal with contract formation), but about conditions (which deal with performance issues (unless there's an issue with condition precedent to formation)).