Contingent Contracts under Indian Contract Act
What is a Contingent Contract?
A Contingent Contract is a contract where the performance depends upon the happening or non-happening of a certain event, which is uncertain.
Definition (Section 31, Indian Contract Act)
“A contract to do or not to do something if some event, collateral to such contract, does or does not happen.”
In simple terms, the contract’s enforcement or performance is dependent on an uncertain future event.
Key Features of Contingent Contracts
Dependence on Future Event:
The contract depends on the occurrence or non-occurrence of a specific event.
Event Must Be Uncertain:
The event should be uncertain and collateral (not the act itself but an external event).
Not a Condition or Warranty:
It is different from conditions or warranties in a contract; it is about an event outside the contract’s immediate scope.
Legal Enforceability:
The contract becomes enforceable only when the specified event happens or does not happen as agreed.
Examples of Contingent Contracts
A promises to pay B ₹10,000 if it rains tomorrow.
A agrees to sell goods to B if B’s ship arrives safely.
Rules Regarding Contingent Contracts (Section 32)
If the event becomes impossible, the contract becomes void.
If the event does not happen, the contract cannot be enforced.
If the event has already happened at the time of contract, it is not a contingent contract but a present fact.
Contracts contingent on the happening of an impossible event are void.
Contracts contingent on the non-happening of an event become enforceable if the event does not happen.
Difference Between Contingent Contract and Wagering Contract
| Aspect | Contingent Contract | Wagering Contract |
|---|---|---|
| Nature | Depends on uncertain future event | Depends on chance or uncertain event |
| Object | To perform or abstain from some act | To win or lose money/gain |
| Enforceability | Enforceable by law | Not enforceable |
| Example | Pay if a certain event happens | Betting on a horse race |
Summary
| Aspect | Details |
|---|---|
| Defined under | Section 31, Indian Contract Act, 1872 |
| Nature | Contract contingent on uncertain future event |
| Enforceability | Only upon happening/non-happening of the event |
| Void when | Event becomes impossible or doesn’t happen |
If you want, I can share some landmark case examples or help with drafting a contingent contract. Would that help?Sure! Here’s a detailed overview of Contingent Contracts under the Indian Contract Act, 1872:
What is a Contingent Contract?
A Contingent Contract is a contract where the performance depends upon the happening or non-happening of a certain event, which is uncertain.
Definition (Section 31, Indian Contract Act)
“A contract to do or not to do something if some event, collateral to such contract, does or does not happen.”
In simple terms, the contract’s enforcement or performance is dependent on an uncertain future event.
Key Features of Contingent Contracts
Dependence on Future Event:
The contract depends on the occurrence or non-occurrence of a specific event.
Event Must Be Uncertain:
The event should be uncertain and collateral (not the act itself but an external event).
Not a Condition or Warranty:
It is different from conditions or warranties in a contract; it is about an event outside the contract’s immediate scope.
Legal Enforceability:
The contract becomes enforceable only when the specified event happens or does not happen as agreed.
Examples of Contingent Contracts
A promises to pay B ₹10,000 if it rains tomorrow.
A agrees to sell goods to B if B’s ship arrives safely.
Rules Regarding Contingent Contracts (Section 32)
If the event becomes impossible, the contract becomes void.
If the event does not happen, the contract cannot be enforced.
If the event has already happened at the time of contract, it is not a contingent contract but a present fact.
Contracts contingent on the happening of an impossible event are void.
Contracts contingent on the non-happening of an event become enforceable if the event does not happen.
Difference Between Contingent Contract and Wagering Contract
| Aspect | Contingent Contract | Wagering Contract |
|---|---|---|
| Nature | Depends on uncertain future event | Depends on chance or uncertain event |
| Object | To perform or abstain from some act | To win or lose money/gain |
| Enforceability | Enforceable by law | Not enforceable |
| Example | Pay if a certain event happens | Betting on a horse race |
Summary
| Aspect | Details |
|---|---|
| Defined under | Section 31, Indian Contract Act, 1872 |
| Nature | Contract contingent on uncertain future event |
| Enforceability | Only upon happening/non-happening of the event |
| Void when | Event becomes impossible or doesn’t happen |
RELATED Blog
0 comments