What is a conditional contract?

A conditional contract is characterized by the fact that it includes specific conditions that must be met before the contract becomes enforceable. In this case, the correct answer identifies that both parties have obligations that must be fulfilled for the contract to take effect.

In a conditional contract, the performance of contractual duties is contingent upon the occurrence of a specified event or condition. This means that until both parties meet their respective requirements, the contract may not be actionable. The nature of this agreement highlights the mutual responsibilities and expectations involved, distinguishing it from contracts that may require only one party to act or those that do not enforce performance at all. This creates a framework where both parties must engage actively in the fulfillment process, ensuring that the contract is maintained in good faith.

The other options fail to capture the essence of a conditional contract's mutual obligation. An agreement requiring only one party to perform does not meet the criteria of a conditional contract since it lacks the reciprocal duties needed for enforceability. A contract that does not require performance from either party signifies no binding agreement, which also contradicts the concept of conditional performance. Similarly, a non-binding agreement lacks the enforceable terms that a conditional contract inherently includes.