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Unless the parties otherwise agree: 

 

(a) the relevant contract or contractual obligation takes effect upon fulfilment of a suspensive condition;


(b) the relevant contract or contractual obligation comes to an end upon fulfilment of a resolutive condition. 

 


COMMENT


1. A general default rule

 

Under the Principles, unless the parties otherwise agree, the fulfilment of a condition has prospective effect only. It does not operate retroactively.

 

Parties are encouraged to express whether a condition operates retroactively or prospectively.

 

2. No retroactive effect

 

In the case of a suspensive condition, the contract or contractual obligation automatically becomes effective from the moment the future uncertain event occurs.

 

Illustration

 

1. The facts are the same as in Illustration 5 to Article 5.3.1. The contract takes effect if and when the necessary antitrust clearance is obtained.

 

In the case of a resolutive condition, the contract or contractual obligation comes to an end from the moment the future uncertain event occurs.

 

Illustration

 

2. The facts are the same as in Illustration 6 to Article 5.3.1. The contract comes to an end if and when B loses its licence.

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