What is Conditions Subsequent (Termination Triggers)?

Conditions subsequent must be distinguished from ordinary notice and termination for breach. Notice is the regular way of ending a contract by observing the notice period. Termination for breach requires a material failure, evidence of it, and typically a formal notice of default. Conditions subsequent work differently: they specify in advance that certain defined events give a party the right to terminate without liability.

Commonly used conditions subsequent in commercial contracts include: failure to obtain a required licence within a specified period, insolvency or suspension of payments by the supplier, exceeding a defined number of SLA breaches within a quarter, persistent underperformance following an agreed remediation period, and acquisition of the supplier by a direct competitor.

The value of conditions subsequent lies in preparation: they are easiest to negotiate during the initial contract discussions. Adding them afterwards is far more difficult.

In the hospitality sector, conditions subsequent are relevant for licence-dependent services, suppliers managing critical systems, and long-term service contracts. If a PMS supplier becomes insolvent, a clear contractual basis for termination and data retrieval is essential.

Conditions subsequent give you control over situations you cannot fully foresee in advance. They are the safety net that prevents you from remaining locked into a contract while fundamental circumstances have changed.

For SMBs without a large legal department, well-drafted conditions subsequent are a straightforward form of protection. They make explicit which situations are unacceptable and give you a legal mechanism to act on them.