Condition precedent

From The Jolly Contrarian
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The things you agree to do, or must happen, before the other guy has to do what he said he'd do. Not to be confused with consideration, which is what you give him for doing it.

So: I agree to lend you my car for ten quid, but before I let you have the keys, you must give proof you have insurance. The ten pounds is consideration; the insurance certificate is a condition precedent.

It reminds me of a story from the jolly contrarian's youth. It was decades ago, a mild Friday evening in the infancy of the credit derivatives market. It was all to do with a note, credit linked to the republic of South Africa. I had faxed if off to the client, as one did in those days, and was jut putting my jacket on to leave for the weekend.

The phone rang. I turned on my heels. Should I answer?

Valour got the better part of discretion, and I did. It turned out to be a partner from that famous derivatives firm[1] Stephenson Harwood. He announced himself as the legal adviser to the prospective client, and told me he had some comments on the swap. Only he pronounced it sw-æp, to rhyme with “crap”, and not sw-ŏp, to rhyme with chop — something that no self-respecting British child would ever do.

In any case this chap sent in his mark-up of the, er, sw-æp, and he had rather gone to town on it, in a manner indicating only a passing acquaintance with the derivatives market, but great expertise in the issues arising when one ships things by sea.

My supervising partner was an excitable fellow[2]. I confess it was with a guilty glee that I trotted around and dropped the comments — they were compendious as they were ill-informed — on his desk, the way an obstreperous child might drop a match into a canister of petrol. It had the anticipated effect. Whilst the young JC was patiently explaining this setback to our client, a giant investment bank represented by a callow but quick young fellow from Dublin in his first year out from Trinity College.

“I have never been so outraged”, said my supervisor, his face a deep puce. “I have covered his draft with unprintable words! Obscenities! Words starting with “c” and “p” ...!”

There was the most exquisite pause before the young Irishman on the speakerphone interjected:

Conditions precedent?”
  1. Not famous. It was and, as far as I know, still is, a shipping and marine insurance specialist.
  2. Highly excitable. To keep a lid on his blood pressure, he retired shortly thereafter and now runs a newsagent in Gillingham.