A condition precedent in a sale purchase agreement may postpone the date of closing of the agreement but not the date of its entering into effect

In a share purchase agreement, the transfer of the acquired shares and their recording was conditioned on the payment of a debt to the sellers. The debt was finally paid at its nominal value only three years later.

The Court rejected the seller's contention that the share sale should be cancelled and determined that the agreement already entered into effect upon its execution. While the consummation of an agreement may depend on the fulfillment of a condition precedent, the inclusion of a condition precedent in the agreement does not undermines its binding legal effect from the moment of its execution and its entire purpose and meaning is to postpone the date of consummation of the agreement. Here, it is an agreement for the sale of shares in which it was expressly agreed upon the amount of consideration, the payment of which was determined as a condition precedent in the agreement. Once this condition was met, even if only three years after the execution of the agreement, then the shares must be transferred and the consummation of the agreement completed and no contention for retroactive changes in the consideration amount may be upheld.