NFPA Paralegal Core Competency Exam (PCCE)Substantive LawMedium
A paralegal is reviewing a contract dispute where one party claims the other breached a material term. The contract states that 'any disputes arising under this agreement shall first be submitted to mediation before either party may initiate litigation.' The plaintiff filed a lawsuit without attempting mediation. The defendant's attorney will likely file a motion based on which contractual clause?
- AIndemnification Clause
- BForce Majeure Clause
- CArbitration Clause
- DCondition Precedent
Show answer & explanationAnswer & explanation
Correct answer: D. Condition Precedent
The requirement to submit to mediation before litigation is a condition precedent. It is an event that must occur before performance under a contract (or the right to sue for breach) becomes due. The defendant would argue the plaintiff failed to satisfy this condition.
Why the other options are wrong
- A. An indemnification clause requires one party to compensate another for losses or damages incurred.
- B. A force majeure clause excuses performance due to unforeseen circumstances beyond the parties' control.
- C. An arbitration clause would mandate binding arbitration instead of, or before, litigation, but the scenario specifies mediation, which is non-binding.
Condition Precedent
An event or action that must take place before a contractual duty becomes absolute or before a party is entitled to enforce a right under a contract.
- Its non-occurrence can excuse performance or delay a right to enforce.
- Often found in contracts related to real estate, loans, or dispute resolution.
- Distinguished from conditions subsequent (which terminate an existing duty).
- Can be express (explicitly stated) or implied.
Memory trick: Precedent means 'before', like a prerequisite.