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Constructive Condition Precedent Properly Fashioned by Court

In a full-fledged opinion by Justice Friedman, the First Department agreed with Supreme Court’s fashioning of a constructive condition precedent for the collection of additional rent under a lease. The First Department quoted the controlling law from the Court of Appeals:

“A condition precedent is an act or event, other than a lapse of time, which, unless the condition is excused, must occur before a duty to perform a promise in the agreement arises’ … . Most conditions precedent describe acts or events which must occur before a party is obliged to perform a promise made pursuant to an existing contract, a situation to be distinguished conceptually from a condition precedent to the formation or existence of the contract itself . . . .

“Conditions can be expressed or implied. Express conditions are those agreed to and imposed by the parties themselves. Implied or constructive conditions are those imposed by law to do justice’ … . Express conditions must be literally performed, whereas constructive conditions, which ordinarily arise from language of promise, are subject to the precept that substantial compliance is sufficient. The importance of the distinction has been explained by Professor Williston:

Since an express condition . . . depends for its validity on the manifested intention of the parties, it has the same sanctity as the promise itself. Though the court may regret the harshness of such a condition, as it may regret the harshness of a promise, it must, nevertheless, generally enforce the will of the parties unless to do so will violate public policy. Where, however, the law itself has imposed the condition, in absence of or irrespective of the manifested intention of the parties, it can deal with its creation as it pleases, shaping the boundaries of the constructive condition in such a way as to do justice and avoid hardship’. (5 Williston, Contracts § 669, at 154 [3d ed].)” Oppenheimer & Co. v Oppenheim, Appel, Dixon & Co. (86 NY2d 685, 690-691 [1995]).  Mount Sinai Hosp v 1998 Alexander Karten Annuity Trust, 2013 NY Slip Op 05667, 1st Dept 8-20-13

 

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