Condolences are sympathies, usually sent to a person who has lost someone.

Ulrich von Gradwitz and Georg Znaeym are enemies because they have a long-lasting family feud over a piece of land.

A famous law suit, in the days of his grandfather, had wrested it from the illegal possession of a neighbouring family of petty landowners; the dispossessed party had never acquiesced in the judgment of the Courts…

When the two men end up trapped under a tree, of course they argue.  They hate each other, after all.  Georg says his men will come first, and he will roll the tree on top of Ulrich to kill him.  He then adds that he will send condolences to Ulrich’s family, for “form's sake.”

In this case, the condolences are not honest reflections of empathy or sympathy, but a ruse to avert suspicion.  He is also using the threat of condolences to throw his enemy off and anger him.  Ulrich retaliates by telling Georg that it is his family that will be getting the condolences when he is murdered.

Ironically, being together with a common enemy makes the men change their minds about continuing the feud, so the murder never takes place.