June 1, Dorothy listed her 75-yr old two-story house for sale with Extreme Realty for $325,000. June 20, George viewed the house with his realtor and wrote an offer, terms of which included: price, $310,000; deposit, $5,000; balance of $305,000 payable upon closing, August 1^st. Although the seller's disclosure statement listed many upgrades, given the age of the house George included in his offer a condition, stating that the offer was made 'subject to' obtaining a satisfactory building inspection no later than July 5^th. Dorothy reluctantly accepted the offer.

1. Explain the legal effect of the condition.
2. Identify one implied term in this contract and explain its legal effect.