Conditions precedent need an owner, evidence and a consequence

A condition is a process, not a label

Conditions precedent determine whether an obligation to complete has become due. Book 6 DCC provides the framework for conditional obligations. The SPA must still identify the event, the party responsible for progressing it, the evidence of satisfaction and the consequences if it is not met.

Even where a transaction has only a handful of conditions, a useful condition matrix still has five columns: owner, satisfaction standard, evidence, waiver right and consequence of partial satisfaction. It converts a broad condition list into an execution document. The matrix should sit alongside the closing checklist, so that the legal position and the transaction timetable are based on the same record.

Art. 6:23 DCC is relevant where a party prevents a condition from being fulfilled. The provision can treat a condition as fulfilled or unfulfilled where reasonableness and fairness require that result. A detailed cooperation covenant reduces the scope for that dispute by recording what each party must actually do.

Regulatory conditions require adaptable definitions

Merger-control, foreign-subsidies and foreign-direct-investment processes have different triggers, timetables and decision makers. A condition should refer to all approvals, clearances, waiting periods and filings required under applicable law, including the EU merger regime, the EU Foreign Subsidies Regulation regime and the Vifo Act. It should also address whether a change in scope, remedy request or authority direction changes the satisfaction standard.

The condition is not complete without a conduct covenant. The parties need to allocate preparation of filings, control of contacts with authorities, information provision, confidentiality and the ability to offer remedies. A "best efforts" obligation has limited practical value unless the agreement describes the material steps expected and the limits on commercial sacrifice.

A hell-or-high-water covenant is materially different. It can require a buyer to accept remedies, divestments or behavioural commitments to obtain clearance, subject to negotiated limits. Those limits should identify the businesses, value, revenue, duration and jurisdictions affected, rather than leaving the question to a later discussion about what is reasonable.

Consents and internal approvals should be mapped early

Third-party consents often arise under change-of-control clauses, financing documents, leases, licences and key supply contracts. The CP schedule should identify the contract, counterparty, required consent, notice period, owner of the relationship and evidence of waiver or approval. A consent that is commercially important but legally non-essential may warrant a separate condition or price mechanism rather than an undefined completion risk.

Internal approvals require the same treatment. The WOR can require the works council to be asked for advice on an intended decision. The timetable should allow for the advice process and any applicable implementation period. Shareholder approval, board approval and lender approval should be supported by a defined corporate action and a closing deliverable.

The satisfaction standard should distinguish an unconditional consent from a consent subject to acceptable conditions. If a landlord agrees only on a rent increase or a lender requires additional security, the SPA needs to state who may accept that outcome. A waiver right is equally important, because a buyer may decide that a non-material consent is not worth delaying completion.

Long-stop dates must reflect the regulatory path

A long-stop date should be built from a realistic timetable for the longest expected approval process, not selected as a symbolic deadline. The clause should identify which party may extend, how long an extension lasts, whether extensions may be repeated and what happens to the parties' continuing covenants. Where the timetable is uncertain, an automatic short extension coupled with a notice procedure can be more workable than an immediate termination right.

Cost allocation should be stated. Filing fees, external economic advice, remedy costs and financing costs during an extension can be significant. The parties should decide whether each bears its own costs, whether the buyer bears regulatory costs, and whether a particular failure to cooperate changes the allocation.

Exclusivity and financing need attention during an extension. The seller may remain restricted from pursuing alternatives while the buyer's financing commitments approach expiry. The SPA can provide for continued exclusivity, revised financing milestones, access to information and a right to terminate where a defined outside date is reached without satisfaction.

A one-page CP matrix

The matrix can be stated in the SPA or an agreed schedule. For each regulatory condition, it should name the filing owner, define clearance, require written confirmation from the authority and identify buyer waiver rights where the law permits the condition to be waived. For each consent, it should name the relationship owner, attach the contractual provision, require a signed consent or waiver and state whether conditional consent is sufficient.

For each internal approval, it should identify the approving body, required resolution, statutory process and closing deliverable. The final column should state whether partial satisfaction permits waiver, extension, price adjustment, termination or completion with a post-closing covenant. That level of specificity gives the parties a clear framework when the timetable becomes pressured.

Evidence should be available at closing

The closing agenda should identify the evidence for each condition alongside the party responsible for its delivery. Regulatory clearance may be evidenced by a formal decision or expiry of a waiting period, while a contractual consent may require an executed waiver in an agreed form. This can reduce the risk of a dispute at closing about whether a condition has been satisfied in substance but not documented.

A condition certificate can bring the matrix together. It can list each condition, attach or identify the evidence, record any waiver and confirm that no party has knowingly impeded fulfilment. The certificate does not replace the underlying approval, but it creates a concise completion record.

Partial satisfaction requires a commercial choice

Some conditions are binary, such as formal clearance or a shareholder resolution. Others can be satisfied subject to obligations, timing restrictions or remedial commitments. The SPA should identify when partial satisfaction is sufficient and who may waive the remaining point. This is particularly relevant where a condition is intended to protect one party but the transaction can proceed with a price adjustment or post-completion covenant.

The matrix should be updated through signing-to-completion calls, with a single agreed owner for each row. That routine creates a clear escalation route where a consent is delayed, information is incomplete or a regulator asks a new question.