What characterizes a conditional contract?

A conditional contract is characterized by the fact that it has specific conditions that must be fulfilled for the obligations of the parties to take effect. In this scenario, both parties have established rules and duties that hinge upon the occurrence of certain events or conditions. For example, in an insurance policy, the insurer's duty to pay a claim is conditional upon the insured fulfilling their obligations, such as paying premiums or reporting a loss within a specified time.

In essence, the relationship within a conditional contract relies heavily on the performance of duties agreed upon by both parties, which directly corresponds to the presence of conditions that trigger those obligations. This two-way interaction solidifies the contract's nature as a mutual agreement where both sides hold responsibilities.