South Carolina Surplus Lines 2025 – 400 Free Practice Questions to Pass the Exam

For a conditional contract to remain enforceable, both parties must fulfill specific duties. This type of contract is characterized by the fact that its obligations are dependent on the occurrence of certain conditions. If one party fails to meet their obligations while the specified conditions are still pending, the other party is typically not required to perform their part of the deal. This mutual dependency underscores the importance of compliance from both parties to ensure the contract remains valid and enforceable.

In the context of insurance and surplus lines, for example, if an insurer agrees to provide coverage only if certain premiums are paid by the policyholder, it is essential that the policyholder meets this condition to maintain the enforceability of the contract. Similarly, if the insurer has conditions to fulfill—such as underwriting guidelines—those must also be permanently in compliance for the contract to remain valid.

The other options, while they might appear relevant, do not capture the essential aspect of mutual obligation that characterizes conditional contracts. The presence of written agreements or verbal agreements does not inherently determine the enforceability; rather, it is the fulfillment of specified duties that matters most.