Definition of Contingent Contract  -

      According to Section 31 of Indian Contract Act, 1872. A contingent contract  is a contract to do or not to do something , if some even, collateral to such contract does or does not happen.

Example -

  A contracts to pay B RS. 10000 if B's house is burnt. This contingent contract.

Elements of contingent contract -

following are the essential elements of Contingent Contract

1. There should be a contract to do or not to do something, if some event, does or does not happen.

2. Event should be collateral to such contract.

  • Enforcement of contracts contingent on an event happening - 

             According to Section 32 of the said Act, Contingent contracts to do or not to do anything in an uncertain future event happens, cannot be enforced by law unless and until that event has happened. If the event becomes impossible, such contracts becomes impossible, such contracts become void.

Illustration : 

A) A make a contract with B to buy B's horse if A survives C. This contract cannot be enforced by law unless and until C dies in A's lifetime .

B) A makes a contract with B to sell a horse to B at a specified price, if C, to whom the horse has been offered, refuses to buy him. The contract cannot be enforced by law unless and until C refuses to buy the horse.

C) A contracts to pay B a sum of money when B marries C, C dies without being married to B. The contract becomes void.

Elements 

i) When any contract to do and if an uncertain future event happens, cannot be enforced by law, unless and until that event has happened

ii) When any contract not to do anything in an uncertain future event happens, cannot be enforced by law unless and until that event has happened.


Contact become void -- If the event becomes impossible, such contract becomes impossible.

  • Enforcement of Contracts contingent on an event not happening (Section 33) 

          Contingent contracts to do or not to do anything if an uncertain future event does not happen, can be enforced when the happening of that event becomes impossible, and not before.

Illustration

          A agrees to pay B a sum of money if a certain ship does not return. The ship is sunk. The contract can be enforced when the ship sinks.

Essentials --

i) Contingent contract to do anything if an uncertain future event does not happen can be enforced when the happening of the event becomes impossible and not before.

ii) Contingent contract not to do anything if an uncertain future event does not happen can be enforced when the happening of that event becomes impossible and not before.

  • When event on which contract is contingent to be deemed impossible, if it is the future conduct of a living person (Section 34)

               If the future event on which a contract is contingent is the way in which a person will act at an unspecified time, the event shall be considered to become impossible when such person does anything which renders it impossible that he should so act within any definite time, or otherwise than under future contingencies.

Illustration 

        A agrees to pay B a sum of money if B marries C, C married D. The marriage of B to  C must now be considered impossible , although it is possible that D may Die and C may afterwards marry B.

  • When contracts become void which are contingent on happening of specified event within fixed time (Section 35)

        Contingent contracts to do or not to do anything, if a specified uncertain event happens within a fixed time become void if at the expiration of the time fixed such event has not happened, or if, before the time fixed, such event becomes impossible.

When Contracts may  be enforced, which are contingent on specified event not happening within fixed time - Contingent contracts to do or not to do anything if a specified uncertain event does not happen within a fixed time may be enforced by law when the time fixed has expired and such event has not happened or before the time fixed has expired if it becomes certain that such event will not happen.

Examples 

 i) A promises to pay B a sum of money if certain ship returns within a year. The contract may be enforced if the ship regards within the year and becomes void if the ship is brunt with in the year.

ii). A promise to pay B a sum of money if a certain ship does not return within a year. The contract may be enforced if the ship does not return within a year or is burnt within the year


  • Agreements contingent on impossible event void (Section 36) -

                 Contingent agreements to do or not to do anything if an impossible event happens are void whether the impossibility of the event is known or not to the parties to agreement at the time when it is made

Examples -

i) A agrees to pay B, 1000 rupees if two straight lines should enclose a space. The agreement is void.

ii) . A agrees to pay B 1000 rupees if B will marry A's daughter C. C was dead at the time of the agreement the agreement is void

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