What characterizes a conditional contract?

A conditional contract is characterized by specific conditions or contingencies that must be met for the contract to be enforceable. In the context of insurance, for example, a conditional contract means that the obligations of one or both parties are dependent upon the occurrence of a specific event or action. This is especially relevant in insurance policies where the coverage provided can depend on the insured fulfilling certain conditions, such as paying premiums, reporting claims within a certain timeframe, or otherwise adhering to the terms of the policy.

In contrast, while consent from both parties is necessary for any contract to be valid, this is a basic requirement for all contracts, not just conditional ones. Similarly, although some contracts must be in writing to be enforceable, not all conditional contracts fall under this legal requirement. The notion of an exchange of value is another common characteristic of contracts, but this trait does not specifically define conditional contracts. What truly sets them apart is the necessity for certain acts or conditions to be fulfilled for the contract to take effect or to impose obligations on the parties involved.