Resolutive condition
A resolutive condition is a contractual provision in commercial real estate agreements that causes the contract to end or become void upon the happening or non-occurrence of a defined event. It operates retroactively, dissolving obligations that were already in effect, distinguishing it from a suspensive condition which delays the commencement of the contract.
Common applications in commercial property include:
- Lease termination if tenant becomes insolvent or bankrupt
- Sale rescission if required planning permission is denied
- Contract dissolution when environmental contamination is discovered
The condition must be explicitly stated in the agreement and must be factually possible. Resolutive conditions provide contractual certainty and legally protected exit strategies for unforeseen circumstances.
