Business Law An overview ofContingent Contracts Submitted by : Nayan Moni Kalita (BAM12005) Pritom Phukan (BAM12008) Anupam Konwar (BAM12013) Prabin Bhuyan (BAM12011) Bhaskar Bora (BAM12023)
OverviewMeaning and DefinitionCharacteristicsRules and RegulationExamples and Illustrations
Meaning and Definition Contingent Contract is a contract in which a promise is conditional and the contract shall be perform only on the happening or not happening of some future uncertain event. Section 31 of the Contract Act defines a contingent contracts as “ A contract to do or not to do something, if some event, collateral to such contract does or does not happen.” Eg : A contracts to pay B Rs.10,000 if B’s house is burnt. This is a contingent contract.
Essential Characteristics There should be existence of a contingency; happening or non-happening of some event in future. Contingency must be uncertain. The event must be collateral, incidental to the contract.
Rules regarding Contingent Contracts1.Contingent contracts dependent on the happening of an uncertainfuture event cannot be enforced until the event has happen. If the eventbecomes impossible such contract becomes void (Sec. 32).2.Contingent contract to do or not to do anything, if an uncertain futureevent does not happen, can be enforced when the happening of that eventbecomes impossible, and not before. (Sec.33).3. If any contract is contingent upon how a person will act at anunspecified time, the event shall be considered to be impossible whensuch person does anything which renders it impossible that he should soact within any definite time, or otherwise than under future contingencies(Sec.34).
4. Contingent contract to do or not to do anything, if an specified uncertain event happens within an fixed time, become void if the event doesn’t happen or its happening becomes impossible before the expiry of that time. Contingent contract to do or not to do anything, if an specified uncertain event happens within an fixed time, may be enforced if the event doesn’t happen or its happening becomes impossible before the expiry of that time (Sec.35).5. Contingent contract to do or not to do anything, if an impossible event happens, are void, whether or not the fact is known to the parties (Sec.36).
A contract to pay B a sum of money, if B marries C. C died withoutbeing married to B. The contract becomes void. Back
A agrees to sell his car to B if C dies. The contract cannot be enforcedso long as C is alive. Back
A agrees to pay B a sum of money if B marries C. C marries D. Thismarriage of B to C must now be considered impossible, although it isconsidered that D may die and that C may be afterward marry B. Back
A promises to pay B a sum of money if a certain ship doesn’t returnwithout a year. The contract may be enforced if the ship doesn’t returnwithin the year, or is brunt within the year. Back
A agrees to pay B Rs. 1000 if B will marry A’s daughter C. She wasthere at the time of the agreement. The agreement is void. Back