Condition-Triggered Obligation Provision

A Condition-Triggered Obligation Provision is a obligation provision (with contractual obligation and contractual condition) and a conditional contractual provision (which becomes enforceable under predetermined triggering conditions).

• Context:
  • It can (typically) specify a Triggering Event, like all condition-triggered provisions.
  • It can (typically) specify Obligation Provision Elements (obligated party, required action, manner of performance, objective of the action.
  • It can range from being an Raw-Text Condition-Triggered Obligation-based Provision to being an Annotated Condition-Triggered Obligation-based Provision.
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• Example(s):
  • a Late Payment Interest Provision with a trigger of payment being overdue by a specified number of days, such as:
    • “If the Tenant fails to pay the monthly rent within 5 days of the due date_{(Triggering Condition, Payment Deadline)}¹, a late payment interest of 5% per month will be applied to the outstanding amount_{(Primary Obligation, Tenant Obligation, Late Payment Interest)}²." Late Payment Interest Provision, Two-Element Provision, Condition-Triggered Obligation Provision.
  • a Termination for Breach Provision with a trigger of one party materially breaching the contract, such as:
    • “If either party materially breaches any term of this Agreement_{(Triggering Condition, Material Breach)}¹ and fails to cure such breach within 30 days of receiving written notice_{(Cure Period, Notice Requirement)}², the non-breaching party may terminate the Agreement immediately_{(Primary Obligation, Termination Right, Immediate Termination)}³." Termination for Breach Provision, Three-Element Provision, Condition-Triggered Obligation Provision.
  • a Casualty Damage Repair Provision with a trigger of the leased premises being damaged by casualty, such as:
    • “Upon casualty damage_{(Triggering Condition, Casualty Damage Event)}¹, the Lessor is to begin and continue repairs to the Leased Premises_{(Primary Obligation, Lessor Obligation, Repair Obligation)}² in a timely and thorough manner_{(Manner of Performance)}³, with the aim of restoring to its prior condition_{(Restoration Standard)}⁴." Casualty Damage Repair Provision, Four-Element Provision.
  • a Service Level Agreement Performance Penalty Provision with a trigger of the service provider failing to meet the specified system uptime, such as:
    • “If the Service Provider fails to achieve a system uptime of 99.9%_{(Triggering Condition, Uptime Requirement)}¹, a penalty of 5% of the monthly service fee will be imposed for each 0.1% below the target_{(Primary Obligation, Service Provider Obligation, Performance Penalty)}²." Service Level Agreement Performance Penalty Provision, Two-Element Provision, Condition-Triggered Obligation Provision.
  • Insurance Coverage Increase Provision:
    • “If the Leased Premises are expanded by more than 25% of the original square footage_{(Triggering Condition, Premises Expansion Threshold)}¹, the Tenant shall increase its liability insurance coverage to a minimum of $5,000,000 per occurrence within 30 days of the expansion_{(Primary Obligation, Tenant Obligation, Insurance Coverage Increase, Coverage Minimum, Compliance Deadline)}²." Insurance Coverage Increase Provision, Two-Element Provision, Condition-Triggered Obligation Provision.
  • Product Recall Cooperation Provision:
    • “In the event of a product recall initiated by the Manufacturer_{(Triggering Condition, Product Recall Event)}¹, the Distributor shall cooperate fully with the Manufacturer's recall procedures_{(Primary Obligation, Distributor Obligation, Recall Cooperation)}², including notifying all affected customers and facilitating product returns_{(Cooperation Scope, Customer Notification, Product Return Facilitation)}³." Product Recall Cooperation Provision, Three-Element Provision, Condition-Triggered Obligation Provision.
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• Counter-Example(s):
  • Conditional Permission Provisions, because it is a permission provision.
  • Unconditional Obligation Provisions, because it is an unconditional provision.
  • ...
• See: Contract Provision, Lease Agreement, Damage and Destruction Clause, Maintenance and Repair Section, Service Level Agreement.

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References

2024

• Claude 3
  • Triggered Obligation Provisions serve as contract mechanisms that specify conditions under which obligations become enforceable.
  • Here is a list of the basic components that most triggered obligation provisions typically include:
    1. Contractual Triggering Event: A clear description of the specific event, circumstance, or condition that will trigger the obligation. This could be a date, an action taken by a contracting party, or a particular outcome.
    2. Contractual Obligated Party: Identification of the party or parties who will be required to perform the obligation once the triggering event occurs.
    3. Contractual Obligation or Duty: A detailed description of the specific action, task, or duty that the obligated party must perform or fulfill upon the occurrence of the triggering event.
    4. Contractual Time Frame: The time period within which the obligated party must fulfill the obligation after the triggering event has occurred. This could be immediately, within a specified number of days, or by a particular date.
    5. Contractual Performance Standards: Any specific requirements, standards, or criteria that the obligated party must meet when fulfilling the obligation to ensure satisfactory performance.
    6. Contractual Consequences of Non-Performance: The legal consequences that will apply if the obligated party fails to perform the required obligation within the specified time frame or to the required standards. This may include damages, termination rights, or other penalties.
    7. Contractual Exemptions: Any specific circumstances under which the obligated party may be excused from performing the obligation, such as force majeure events or other agreed-upon exceptions.
    8. Contractual Notice Requirements: Any requirements for the parties to provide notice to each other regarding the occurrence of the triggering event, the fulfillment of the obligation, or any other relevant matters.
    9. Contractual Dispute Resolution: The agreed-upon methods for resolving any disputes that may arise in connection with the triggered obligation provision, such as mediation, arbitration, or litigation.
    10. Contractual Definitions: Clear definitions of any key terms used within the triggered obligation provision to ensure all parties.

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