## Facts

- Preston owned an established silk‑mercer business and agreed by written articles to transfer the business and stock at a fair valuation after Kingston served as a covenant‑servant for one year and a quarter.
- The parties contemplated that Kingston would take over the business with Preston’s nephew (or nominee) under partnership deeds for a 14‑year term and continue operating from Preston’s house after execution of those deeds.
- Kingston promised that, “at, and before” the sealing and delivery of the partnership deeds, he would procure “good and sufficient security,” approved by Preston, to secure monthly payments of £250 to Preston until the stock value was reduced to £4000.
- Preston did not surrender the business and stock at the end of the year and a quarter.
- Kingston admitted he had not provided the contractually required security but claimed Preston was still obligated to convey the business.

## Issues

1. Whether Kingston’s covenant to provide “good and sufficient security” approved by Preston was a condition precedent to Preston’s duty to transfer the business and stock.
2. Whether Preston could withhold performance because Kingston failed to furnish that security, or whether the covenants were independent so Kingston could sue for nonperformance despite his own breach.

## Decision

- The Court of King’s Bench (Lord Mansfield C.J.) held that Kingston’s provision of approved security was a condition precedent to Preston’s obligation to transfer the business and stock.
- Because Kingston did not satisfy that condition, Preston’s duty to convey did not arise.
- Judgment was entered for Preston.

## Legal Principles

- Contractual covenants may be classified as: (1) mutual and independent covenants; (2) dependent covenants (conditions precedent); or (3) mutual conditions to be performed at the same time (concurrent conditions).
- Whether promises are dependent or independent is determined from the parties’ evident intent and the contemplated order of performance, not merely the placement of clauses in the instrument.
- When the bargain’s essence is that one party will not part with valuable property or a business without prior assurance of payment, a promise to furnish adequate security may be construed as a condition precedent permitting the other party to withhold performance until satisfied.

## Conclusion

The court construed the agreement to require Kingston to provide approved security before Preston was obliged to surrender his business and stock, making Kingston’s failure to furnish security a complete bar to his claim for Preston’s nonperformance.


Kingston v. Preston, 99 Eng. Rep. 437 (K.B. 1773)