The Court of Appeal recently grappled with this question when considering a case that had arisen, once again, in the context of the fallout of a digital transformation project gone wrong.
In Disclosure and Barring Service v Tata Consultancy Services Ltd [2025] EWCA Civ 380, the digital transformation project was beset by delays, with each side blaming the other. In theory, DBS should have been entitled to payments because of certain delays. But Tata argued that they weren't, because they hadn't fulfilled a condition precedent.
The issue for the Court of Appeal was whether clause 6.1 of the agreement between the parties made the prompt issue of a non-conformance report (NCR) a condition precedent to receiving delay payments. The first instance judge had held that it was.
The Court of Appeal agreed with the first instance judge. In addition, it said that whether a party has to comply with one or more specified requirements before being entitled to a remedy will turn on the exact words used, set against their contractual context.
A condition precedent must be expressed clearly, though it is not necessary for it to say "this is a condition precedent".
In addition to conditionality, the link between the two steps should be expressed as an obligation.
It is not necessary for the deadline for completion of a condition precedent to specify a particular number of days or weeks; "promptly" is sufficient.
The court said that the way the clauses in the agreement were structured with "if .., then .." wording made it clear that it was conditional and that the steps in clause 6.1 must be fulfilled before the options to grant the customer a remedy could be exercised. DBS had also suggested that there was a lack of precision regarding what a Non-conformance Report must contain, which would prevent the conclusion that the issue of such a report was a condition precedent. The court rejected that argument.
As a result, DBS' failure to promptly issue an NCR meant it was not entitled to a delay payment.
In summary, when drafting, and more to the point, interpreting clauses, what matters is whether the words, in their context, make it clear that the clause is meant to have a conditional effect. Actually, it's perhaps less of an issue in the drafting. What really matters is that when you finalise a contract, you don't metaphorically put it away in a drawer and forget about it. Make sure that the people working on the contract understand what they need to do if there are problems and that formalities are complied with. In DBS' case, the failure to do so has proved to be very expensive.
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