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Conditional Transfers

Conditional transfers refer to the transfer of property from one person to another where the transfer is dependent on the fulfillment of certain conditions. There are three types of conditions: condition precedent, condition subsequent, and collateral condition. A condition precedent must be fulfilled before the transfer takes effect, a condition subsequent takes effect after the transfer to possibly change ownership, and a collateral condition must be fulfilled simultaneously with the transfer. The document provides examples and explanations of each type of condition.

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Abir Al Mahmud Khan
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420 views

Conditional Transfers

Conditional transfers refer to the transfer of property from one person to another where the transfer is dependent on the fulfillment of certain conditions. There are three types of conditions: condition precedent, condition subsequent, and collateral condition. A condition precedent must be fulfilled before the transfer takes effect, a condition subsequent takes effect after the transfer to possibly change ownership, and a collateral condition must be fulfilled simultaneously with the transfer. The document provides examples and explanations of each type of condition.

Uploaded by

Abir Al Mahmud Khan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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CONDITIONAL TRANSFERS

Property may be transferred by one person to another person absolutely or


conditionally. Conditional transfers mean the transfers which generally take
place upon the fulfillment of any condition attached. This conditional transfer is
used as opposed to absolute transfer. When an interest is created on a transfer of
property and is made to depend on a condition, the transfer is said to be a
conditional transfer. Every person competent to contract and entitled to transfer
a property, is competent to transfer such property either absolutely or
conditionally.

Section 25 of the Transfer of Property Act, 1882 provides for Conditional


Transfer. It means that any transfer that happens on the fulfilment of a condition
that is imposed on the other party for the transfer of property. For example, A
agrees to transfer his property to B if he gets selected for a job. The requirement
of A for B to get a job is called a condition.

Types of Conditions on Transfer:

There are three specific types of conditions that are imposed in a transfer of
property and there are some more types provided. All these conditions should
also satisfy all the requirements of a condition as mentioned in Section 25 of the
Transfer of Property Act, 1882.

Conditions are of three kinds:

 Condition precedent,

 Condition subsequent, and

 Collateral conditions.

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Condition precedent
Meaning of Condition Precedent:

A condition which is prior to the transfer is known as condition precedent.


Where the terms of a transfer of property impose a condition to be fulfilled
before a person taken interest in the property, the condition is a condition
precedent.

For example, where A makes a gift of his house to B provided B marries C.


This is a condition precedent because unless and until B marries C the property
will not be transferred to him.

Fulfilment of Condition Precedent (Section 26):

According to section 26, where the terms of a transfer of property impose a


condition to be fulfilled before a person can take an interest in the property, the
condition shall be deemed to have been fulfilled if it has been substantially
complied with.

Illustrations:

A transfers Tk. 5,000 to B on condition that he shall marry with the consent of
C, D and E. E dies. B marries with the consent of C and D. B is deemed to have
fulfilled the conditions.

A transfers Tk. 5,000 to B on condition that he shall marry with the consent of
C, D and E. B marries without the consent of C, D and E, but obtains their
consent after the marriage. B has not fulfilled the condition.

The general rule regarding this is that where a transfer is made on a condition
precedent, the transfer fails unless the condition is first fulfilled. This section

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says that, even if the condition is substantially complied with, the condition will
be deemed to have been fulfilled.

Characteristics of Condition Precedent:

The characteristics of a condition precedent may be summarized as follows:

 A condition precedent is one which must happen before the estate can
vest.
 Where the condition is precedent, the estate does not vest in the transferee
until the condition is performed.
 A condition precedent is fulfilled if it is substantially complied with.
 Where the condition precedent becomes impossible of performance, or is
immoral or opposed to public policy, or or fraudulent, the transfer will be
void.

Condition Subsequent

It is given in Section 29 of the Transfer of Property Act, 1882. Any condition


that is required to be fulfilled after the transfer of any property is called
condition subsequent. This condition is to be strictly complied with and the
transfer will happen only after the completion of such condition.

Meaning of Condition Subsequent:

The condition which is to be fulfilled after the transfer of property has already
taken place is known as condition subsequent. Where a transfer of property is
subject to a condition subsequent the interest which has already been vested in
the transferee is affected by fulfilment or non-fulfilment of that condition.
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For example, A transfers his land to B on the condition that within 2 years of
the date of transfer B will go to a foreign country for higher studies. Here if B
does not go for higher studies to a foreign country within 2 years of date of
transfer his interest in the land will cease.

Although it is an essential requirement that the condition needs to lawful and if


it is not then the condition will be held as void and the transfer will not break
down and will be finalized. For example, A transfers the property to B on the
condition that he shall murder C. This condition is void and hence transfer will
go through and the property will be kept by B.

Fulfilment of Condition Subsequent (Section 29):

Section 29 provides that, an ulterior disposition of the kind contemplated by the


last preceding section cannot take effect unless the condition is strictly fulfilled.

Illustration:

A transfers Tk. 500 to B, to be paid to him on his attaining his majority or


marrying, with a proviso that, if B dies a minor or marries without C's consent,
the Tk. 500 shall go to D. B marries when only 17 years of age, without C's
consent. The transfer to D takes effect.

Condition Collateral

Any condition that is required to be fulfilled simultaneously after the transfer of


any property is called condition collateral. It needs to be strictly followed
otherwise the transfer will break down.

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A condition is collateral if it is required to be fulfilled simultaneously with the
transfer. In other words, a collateral condition is required to be performed side
by side the operation of the transfer. Thus, where A leases his property to B so
long as B resides in the house of A, the condition is collateral. The transfer i.e.
the lease remains in operation only till B fulfils the condition, viz. he continues
to live with A.

For example, A transfers property ‘X’ to B on the condition that he shall


maintain A’s wife C for a period of 10 years. If B complies with it and
maintains C, the transfer will be valid and the property will be in the possession
of B.

VOID CONDITION PRECEDENT:


Section 25 deals with a condition precedent. Under this section, a condition
precedent is void if its performance is either impossible or unlawful and, where
a condition precedent is void the transfer of property too is void; it fails. In the
following cases the conditions are void and the transfer fails (i.e. it does not take
place) because the conditions cannot be fulfilled:

 Impossible condition:
If the fulfilment of the condition is impossible, the transfer of property cannot
take place.
For example, A lets a farm to B on condition that he shall walk a hundred miles
in an hour. The lease is void, since this condition is impossible to perform
because no person can walk a 100 miles in an hour.

 Forbidden by law:
When the condition is forbidden by law, the transfer on the basis of fulfilment
of that condition becomes void.

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For example, A gives his house to B on condition that he shall transfer his
excise licence to C. The condition being forbidden by law, the transfer is void.

 Defeat the provision of any law:


When condition is of such a nature that, if permitted, it would defeat the
provisions of any law, the transfer on the basis of such a condition becomes
void.
For example, A transfers his house to B (a Muslim woman), who is married and
her husband is alive, on condition that she shall marry C during the continuance
of her marriage. The condition being such that if permitted it would defeat the
provisions of Muslim Law, the transfer is void.

 Fraudulent:
When the condition is fraudulent, the transfer will become void.
For example, A makes a gift of his house to B, who is agent of C, on condition
that B shall give a false receipt on behalf of his principal C. Performance of this
condition would be fraudulent, therefore, the transfer is void.

 Involves injury to the person or property of another:


When it involves or implies injury to the person or property of another, the
condition and the transfer on the basis will be void.
For example, A transfers 50,000 taka to B on condition that he shall murder C.
The transfer is void because the condition involves injury to another person and
murder is also punishable offence.

 Immoral or Public policy:


Where the condition is such that, the Court regards it as immoral or opposed to
public policy.

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For example, where A transfer 50,000 taka to his niece C, if she will desert her
husband, the transfer is void.

It may be noted that except one, void conditions precedent as contemplated in


this section are 'the same as given in section 23 of the Contract Act. Therefore,
further illustrations of the nature of conditions which are void on the ground of
being unlawful may be seen there.

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