§16.1THE STRUCTURE OF A CONTRACT: AN INTRODUCTION TO PROMISES AND CONDITIONS
Most terms in a contract are promises or conditions---or both. The meaning, nature, and effect of a promise is very familiar by now. The concept of promise was introduced right at the beginning of this book, and its central role in all contractual relationships has been emphasized ever since. Although conditions are just as much a fundamental component of contracts, their presence and function have not been much discussed in previous chapters. It is the purpose of this chapter to introduce the concept of conditions and to examine their functions. In doing this, we will look more carefully at the structure of a contract and explore the way in which conditions and promises interact to form the basis of the contractual relationship. We will then proceed, in this chapter and the next, to consider the performance obligations created by the network of promises and conditions, and to address the problems that are created when those obligations are violated. You will encounter some unfamiliar terminology, but this does not mean that we are entering some new and alien field of contract law. Most, if not all, of the substantive principles discussed here have been covered already, and the breakdown of a contract into promises and conditions is simply the means by which its structure is studied. As is so often the case, you will find that the key to analysis is interpretation---the determination of the parties’ intent, as expressed by them in their contract or as inferred from surrounding evidence and reasonable expectations.
We begin with a set of definitions and some simple examples to introduce terminology and to provide an initial insight into the reason for differentiating promises and conditions.