Question

Assume that Jack, Hal, and Sophia enter into a valid contract for the sale of the restaurant and for a covenant not to compete. The contract calls for Hal and Sophia to pay $300,000 now and 10% of the gross sales of the restaurant and frozen food to Jack for the next ten years. There is a clause in the contract that states if the revenue dips below $50,000 per year, that Jack would then get back the rights to sell the frozen food himself. This clause is:

Answer 1

Answer:

a condition subsequent.

Explanation:

Based on the scenario being described within the question it can be said that this clause is known as a condition subsequent. This refers to an event or state of affairs that causes something else to come to a close, usually being an individuals legal rights or duties that come to an end. Which in this case if the condition is met in this scenario then it would cause Jack to retrieve the right to sell the frozen food himself.