Conditions Precedent And Deemed Fulfilment

Summary

Conditions precedent play an important role in contracts and it is often said that a party cannot benefit from its own breach. But in King Crude Carriers SA and others v Ridgebury November LLC and others [2025] UKSC 39, the Supreme Court rejected a principle from a House of Lords decision dating back to 1881, concerning whether a party can wrongfully, and in breach of contract, prevent the fulfilment of a condition precedent to that party's payment obligation such that the innocent party cannot make a simple debt claim. In this BCLP Insight, we examine the case and consider the key takeaways.

The dispute and arbitrations

The case concerns three contracts for the sale of three vessels based on the Norwegian Sale form 2012 standard form. Under that form, the buyers were required to pay a deposit of 10 percent of the purchase price to a deposit holder within three banking days of (i) the agreements being signed and exchanged, and (ii) the deposit holder