Also known as: implied condition
Written by attorneys · grounded in primary & secondary sources — see below
A rule of construction providing that a future interest in a donative transfer is not subject to an implied condition that the beneficiary survive the distribution date or any other post-creation event. The rule applies unless the transfer creates a postponed multiple-generation class gift or a statute directs otherwise. Under the rule the beneficiary's interest passes through the beneficiary's estate even if the beneficiary dies before distribution.
Grantor created a trust directing income to A for life then principal to A's children X, Y, and Z. Y died before A but left surviving descendants. At A's death the trustee distributed one-third of the principal to Y's estate rather than reallocating it among the surviving children. The distribution followed the rule that no survival condition is implied.
Isabella Ingram contracted with Icarus Aviation to rent a concert hall for a series of performances. The hall burned down before the first scheduled date through no fault of either party. Icarus was excused from performing because the continued existence of the hall was treated as an implied condition of the contract.
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Ines Ibarra agreed to rent a flat overlooking the coronation route for two days at a premium price. When the coronation was postponed the purpose of the rental was destroyed. The court held that the occurrence of the coronation procession was an implied condition of the contract and excused Ines from paying the balance.
Idris Ives defaulted on a mortgage during the Great Depression. State law temporarily extended the redemption period and barred foreclosure. The Supreme Court upheld the statute as a reasonable exercise of state power even though it altered the lender's contractual remedies.
Integrity Partners contracted with Ibrahim Iqbal to install plumbing using a specified brand of pipe. The contractor used an equivalent brand of equal quality. The court held that the brand specification was not a strict condition and that substantial performance satisfied the owner's duty to pay.
Ingrid Innes signed an employment agreement containing an arbitration clause that limited damages and required the employee to bear half the costs. The court refused to enforce the clause because the cost-sharing and damage limitations made the arbitration process unconscionable.
The law refuses to imply a survival condition for a future interest unless the gift is a postponed multiple-generation class gift or a statute provides otherwise. The beneficiary's share therefore passes through the beneficiary's estate even if the beneficiary dies before the distribution date.
Supporting sources
When a contract depends on the continued existence of a specific thing, the law treats that existence as an implied condition. Destruction of the thing without fault of either party excuses performance.
Supporting sources
An express condition appears in the instrument itself. An implied condition is supplied by a rule of construction when the instrument is silent. The Restatement rule states that survival is not implied except in the narrow class-gift situations noted above.
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…for the return of his £25 deposit on the ground of total failure of consideration. Darling J. held that there was an implied condition that the procession should take place and gave judgment for the defendant. The plaintiff appealed. The real question in this case is the extent of the application in English law of the…