Conditions Subsequent Loan Agreement

For example, a facility agreement may be a framework agreement that allows the borrower to obtain funds for a number of real estate purchases. Each loan will therefore have its own conditions precedent (such as real estate information and reports), but there will be some “roof conditions” (such as borrower information) that can be obtained as conditions precedent for the first loan and will not have to be remitted. A CS is a kind of insurance for one or more parties. It guarantees that one of the groups in the contract can leave if certain conditions are met. Imagine a subsequent condition as an escape clause. It terminates the contractual commitment of a party. In contracts, all parties involved have certain responsibilities. The CS gives a party the opportunity to move away from its promise to fulfill a duty.