Are you using Wisescript Editor or Windows Installer Editor?
I'm going to guess that you are using Windows Installer Editor as Wisescript has an Exit command.
So all you need to do is to set a property if you want to exit, then use that property as a condition on a Type 19 (Terminate Installation) custom action, so that the custom action will run when you want to terminate the install. The Type 19 custom action allows you to include an information string for the user.

I use this post to ask about Terminate Installation action.

I'm doing the same thing...checking if third party application is installed and if not, exit installation.

I'm using Terminate Installation action, but every time after message is closed comes error message:

"Fatal Error

Installation ended prematurely because of an error."

I'm using Windows installer 7 and doing this after AppSearch and before CCPSearch. Four different cases and everytime this Fatal error appears after user clicks OK  Does not look very nice to user so how can I get rid of?

Tiramisu,

That's the way the terminate installation action works.
If you don't like it then you'll need to come up with something else.

The standard windows installer type 19 custom action always reports a fatal error as you have noted.
However, you have the option of adding your own text to this terminate dialog, so you can either add text to indicate that the install was terminated by the user, or to explain that the fatal error message is standard.
Unfortunately, there is no other clean way to terminate an MSI install, so your only other option is to compile the MSI to EXE format, and use the wisescript stub wrapper code to do your checks and perform the exit, so that the MSI only gets executed when all the required conditions are met.