Contingent Contract- The Indian Contract Act 1872 Free Notes

meaning of contingent contract
meaning of contingent contract

What is contingent contract?

Meaning of Contingent Contract: A ‘contingent contract’ is a contract, to do or not to do something. If some event, collateral to such contract does or does not happen

Contingent Contract Example:

  • A contract to pay B Rs.10,000 if B house is burnt.
  • A promise to pay B Rs.1,00,000 if a certain, ship does not return within a year.

To know the Definition and Nature of Contact under Indian Contract Act 1872 click here

Essential Features of a Contingent Contract

  • It is a contract to do or not to do something
  • Dependent on happening or non happening of an event
  • Such on event is a collateral event (i.e. it is collateral) to the contract i.e. the event must not depend upon the mere will of party.
  • The event is uncertain

Rules Regarding Contingent Contract Under The Indian Contract Act 1872 Notes

CONTINGENT UPON

  1. Happening of Uncertain Future Event [Sec. 32, The Indian Contract Act 1872 ]                                                
  2. Non – Happening of Uncertain Future Event[Sec. 33, The Indian Contract Act 1872]
  3. Future conduct of a living person[Sec. 34, The Indian Contract Act 1872]
  4. Happening of Specified Uncertain Event within Fixed time[Sec.35, The Indian Contract Act 1872]
  5. Non – Happening of Specified Uncertain Event within Fixed Time[Sec. 35, The Indian Contract Act 1872
  6. Impossible Events[Sec.36, The Indian Contract Act 1872]
  1. Contracts contingent upon the happing of an event enforced – such event has happened [32, The Indian Contract Act 1872]
    Void – such event because impossible [happening of such event]
    Ex.:-    A contract to pay B a sum of money when B marries e dies without being married to B contract – void
  2. Non happening of a future event:- [33, The Indian Contract Act 1872]
    Enforced :- when the happening of such events becomes impossible.
    Void:- such event has happened.
    Ex.:-    A agrees to pay B sum of money if a certain ship does not return. This ship is sunk. The contract can be enforced when the ship sinks
  3. Happening of an event within a specified time [35, The Indian Contract Act 1872]
    Enforce :- when such event has happened within the specific time.
    Void :- When the happening of such event because impossible before the expiry of specified time.
    When such event has not happened within specified time. A promise to pay B sum of money if a certain ship return within a Year.
    Enforce :- ship returns within the year .
    Void :- If the ship is burnt within the year / not come within the year.
  4. Non – happening of an event within a fixed time [Section 35, The Indian Contract Act 1872]
    Enforce :- When the happening of such event because impossible before the expiry of specified time.
    When such event has not happened within the specified .
    Void:- When such event has happened within the specified period.
  5. Future conduct of a living person. [34, The Indian Contract Act 1872]
    Enforced:- When such person acts in the manner as desired in the contract.
    Void :- When such person does anything which makes the desired future conduct of such person – impossible – dependent upon certain contingency.
    Example: A agrees to pay B a sum of money if B marries C . C married D. The marriage of B to C must now considered impossible, although it is possible that D may die any that C may afterwards marry B.
  6. Impossible events [36, The Indian Contract Act 1872]
    Such an agreement can not be enforced since it is void whether the impossibility of the event was known to the parties or not is immaterial.
    A agrees to pay B Rs.1,000 if two parallel straight lines should enclose a space. Agreements are void.
    A agrees to pay B Rs.1,000 if B will marry A’s daughter C and C was dead at the time of the agreement. Agreement is void.

Difference between Wagering & Contingent agreement.

  Wagering agreement Contingent agreement
  • Defined
  • Meaning
  • Nature of uncertain event
  • Void / valid
  • Interest
  • Not defined u/s 30  
  • Promise to give money or money’s with upon the determinative of an uncertain event.
  • Contingent nature  
  • Void  
  • No other interest in the subject matter of the agreement except within of loss of wagering amt.
    A wagering agreement is essentially of a contingent nature. Consists of reciprocal promises futures event is the sole determine factor
  • Defined o/s 31  
  • To do or not to do something if some event. Collateral to such contract does or does not happen
  • Not be a wagering nature  
  • Valid  
  • Have real interest outcome of the uncertain gain.
    A contingent contract the not be a wagering nature.
    Not consist a reciprocal promises future event is fully collateral.

To know more about wagering agreement Click here


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