8/7/2019 Contingent Contracts7
http://slidepdf.com/reader/full/contingent-contracts7 1/7
Contingent ContractsContingent Contracts
y Sec.31- ¶ A contingent contract is a contract to do ornot to do something, if some event, collateral to such
contract, does or does not happen.·
y Ex : A contracts to pay B Rs.10 lakh if B·s house is burnt
8/7/2019 Contingent Contracts7
http://slidepdf.com/reader/full/contingent-contracts7 2/7
Essential characteristicsEssential characteristics
y There shd be existence of contingency; Happening or
non happening of event in future
y Contingency must be uncertain
y
The event must be collateral, for e.g. , incidental to thecontract
8/7/2019 Contingent Contracts7
http://slidepdf.com/reader/full/contingent-contracts7 3/7
RulesRules
y Happening of an event- Sec 32.
¶contingent contracts to do or not to do anything if an
uncertain future event happens cannot be enforced by law
unless and until that event has happened.· If such event
becomes impossible, it renders the contract void.
y Ex A makes a contract with B to buy B·s house if A
survives C. This contract cannot be enforced by law unless
and until C dies in A·s lifetime.
8/7/2019 Contingent Contracts7
http://slidepdf.com/reader/full/contingent-contracts7 4/7
..Rules..Rules
y Non happening of an event. Sec 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 the event becomes impossible, and
not before·.
y Ex 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.
8/7/2019 Contingent Contracts7
http://slidepdf.com/reader/full/contingent-contracts7 5/7
..Rules..Rules
y Happening of an event within a fixed time- Sec.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.µ
� Ex A promises to pay B a sum of money if a certain ship
returns within a year. The contract may be enforced if
the ship returns within a year, and becomes void if theship is burnt within year.
8/7/2019 Contingent Contracts7
http://slidepdf.com/reader/full/contingent-contracts7 7/7
«Rules«Rules
y Happening of an impossible event- Sec.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 the agreement at the time when it is made.·
� EX A agrees to pay B Rs10 lakh if B will marry A·s
daughter C. C was dead at the time of agreement .The
agreement is void.