What is it?
A contractual clause type that governs when obligations become binding based on the fulfillment of a condition.
dependent
Contract LawLegal glossary term
Quick answer
Dependent usually means a duty that hinges on a specific event. In contracts, it matters because performance may be delayed or avoided entirely. Before signing, check the exact condition and the method for confirming its occurrence.
Definitions
What is dependent?
Legal Definition
A dependent clause in a contract ties a party's duty to the occurrence of a specified event, such as a financing condition or regulatory approval. It creates a contingent obligation that does not become enforceable until the condition is satisfied. The most critical qualifier is whether the condition is precedent or subsequent.
Plain-English Translation
Think of a hall pass: you can only leave class if the teacher gives you the pass, just like a contract duty kicks in only when its trigger happens.
Contract relevance
Why dependent matters in contracts
Ignoring a dependent clause can render a promised performance void, leaving the obligor exposed to breach liability; the party relying on the condition bears the risk.
Document context
Where dependent appears in documents
| Document type | Section | Why it matters |
|---|---|---|
| Loan agreement | Financing clause | Determines when funds become disbursable |
| Purchase agreement | Closing conditions | Sets triggers for transfer of ownership |
| UCC security agreement | Collateral clause | Links perfection to filing of financing statement |
| Franchise agreement | Territory grant | Depends on franchisor's regulatory approval |
Contract language
Common contract wording
| Contract wording | Plain-English meaning | What to check |
|---|---|---|
| "Obligation shall commence upon the Borrower's receipt of the loan proceeds" | Duty starts only after funds are received | Verify timing and proof of receipt |
| "Tenant shall pay reduced rent only if the landlord obtains zoning approval" | Rent reduction is conditional on zoning | Confirm who proves approval |
| "Seller's warranty applies contingent upon buyer's delivery of inspection report" | Warranty triggers after report delivery | Check delivery method and deadline |
Red flags
Red flags to watch for
Wording examples
Clearer wording examples
Vague wording
"Upon satisfaction of conditions"
Clearer wording
"When the lender receives a fully executed loan commitment by June 30"
Vague wording
"If applicable"
Clearer wording
"If the property receives a certificate of occupancy by July 15"
Note: “clearer” means easier to read — not legally reviewed or guaranteed safe.
Pre-signature checklist
What to check before signing
1
Identify every dependent clause in the document
2
Determine whether each is precedent or subsequent
3
Confirm the exact event that satisfies the condition
4
Ask how proof of satisfaction will be documented
5
Check for any deadline or cut‑off date attached to the condition
6
Ensure the clause does not conflict with other obligations
7
Verify who bears the risk if the condition is not met
Party impact
How dependent affects each party
| Party | What this party should check |
|---|---|
| Lender | Must track the borrower's compliance and retain evidence of condition satisfaction |
| Borrower | Should ensure it can meet the condition and understand the consequences of failure |
| Seller | Needs to know when warranties become effective |
| Tenant | Must monitor landlord's regulatory approvals to claim rent reductions |
Comparison
dependent vs similar terms
| Related term | Plain meaning | Main difference from dependent |
|---|---|---|
| Condition precedent | Triggers duty when met | Dependent may be either precedent or subsequent |
| Condition subsequent | Terminates duty when met | Dependent creates duty that may later be extinguished |
| Force majeure | Excuses performance due to unforeseeable events | Not tied to a contractual trigger but to external events |
Missing or vague
If dependent is missing or vague
If a dependent clause is left undefined, parties will argue over when obligations begin, leading to delayed performance or unexpected breaches. The obligor may claim the condition never occurred, while the counter‑party insists it was satisfied. Courts will then have to interpret intent, often resulting in costly litigation.
Ambiguities also make it hard to allocate risk, so each side may bear unexpected loss.
Document map
Document section map
| Contract section | What to inspect |
|---|---|
| Definitions | Look for explicit definition of the condition |
| Closing Conditions | Verify triggers and required documentation |
| Payment | Ensure payment schedule references the dependent event |
| Termination | Check if the condition can cause early termination |
| Warranties | Confirm when warranties become effective |
Visual model
Understand dependent fast
An explainer image has not been generated for this term yet.
01
Landlord includes a dependent clause that rent abatement applies only after the tenant obtains a city permit, resulting in no rent reduction until the permit is issued.
02
Borrower signs a loan agreement where the drawdown is dependent on the completion of a collateral appraisal, so funds are released only after the appraisal report is approved.
Document context
How dependent shows up in legal documents
Why does it matter?
Ignoring a dependent clause can render a promised performance void, leaving the obligor exposed to breach liability; the party relying on the condition bears the risk.
When does it matter?
When the specified condition, such as a loan closing, occurs, the dependent obligation springs into force.
Where is it usually seen?
Standard in UCC § 2-206 commercial contracts and in the financing sections of loan agreements and M&A purchase agreements.
Who is affected?
Lender – gains a right to enforce payment only after the borrower meets the condition; Borrower – risks default if the condition is misinterpreted.
How does it work?
First, the contract identifies the condition precedent. Then, the party monitors for its satisfaction. Within a reasonable time after the event, the obligated party must perform, or the duty remains suspended.
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Wikipedia
External reference for dependent
Open Wikipedia for broader background on dependent.
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Where dependent connects to real contract work
This layer links the term to nearby glossary entries, document use cases, and contract-risk guides so readers can move from definition to context without dead ends.
Glossary
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Source & disclosure
This page is an AI-assisted plain-English explanation based on LexPredict Legal Dictionary context and contract-review patterns. It is not legal advice. Meaning may vary by jurisdiction, industry, and exact clause wording.
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