Contracts and Sales Multistate Bar Practice Exam

When a condition subsequent occurs, it specifically triggers the termination of a party's duty to perform under a contract. A condition subsequent is a future event or circumstance that, if it occurs, can undo or terminate an existing obligation. This typically means that once the specified event happens, the obligations set forth in the contract are no longer enforceable for the affected party.

In contract law, this is quite significant because it recognizes that not all conditions or promises remain binding indefinitely; there are certain events that, when they materialize, can alter the required performance under the contract. This distinguishes a condition subsequent from a condition precedent, which must occur before a duty to perform arises.

The other options do not accurately represent the function of a condition subsequent. Amending obligations implies a mutual agreement to change the terms, which does not occur automatically due to a condition subsequent. Declaring the contract void suggests it was never valid, whereas a condition subsequent acknowledges the contract was valid until the condition occurred. Finally, while a party may choose not to perform after a condition subsequent occurs, that choice is a consequence of the termination of the obligation, rather than the fundamental effect of the condition happening.