Contingent contracts and wagering contracts both involve future uncertain events, but they differ in important ways. Contingent contracts require the performance of a contract to be conditional on a future collateral event outside the control of the promisor. Examples include contracts for the sale of goods if they arrive safely by ship. Wagering contracts, which are void, involve money being paid based solely on an uncertain future event determined by chance alone, with both parties having equal chance of gain or loss but no other interest in the outcome. The key differences are that contingent contracts may involve other interests, while wagering contracts do not, and contingent agreements are not a game of chance like wagering agreements.
1. Indore Institute Of Law
(Affiliated to D.A.V.V. & Bar Council of India)
B.B.A.LL.B. (HONS.)
DIFFERENCE BETWEEN CONTINGENT CONTRACT AND
WAGERING CONTRACT
SUBMITTED TO: PROF. BELU GEORGE
SUBMITTED BY: AISHWARYA GUPTA
2. Introduction
The term “contract” is defined in Section 2(h) of the Indian Contract
Act, 1872 as follows: “An agreement enforceable by law is a
contract.”
There are different types of contract but under this project we will
cover only two of its types, i.e. Wagering Contract and Contingent
Contract.
3. Contingent Contract
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.
4. Examples
A contracts to sell B 10 box's of cotton for Rs20, 000, if the ship by which
they are coming returns safely.
A promises to give a loan of Rs1, 000 to B, if he is elected the president of
a particular association.
5. Essential of Contingent Contract
A contract to do or abstaining from doing something
Performance of the Contract must be Conditional
Event must be Collateral to the Contract
Event shouldn’t be at the discretion of the Promisor
6. Wagering Contract
Agreements entered into between parties under the condition that money is payable by
the first party to the second party on the happening of a future uncertain event, and the
second party to the first party when the event does not happen, are called Wagering
Agreements or Wager.
7. Examples
There is an agreement between A and B which provides that if Indian
Cricket Team beats Pakistan Cricket Team, A will pay Rs. 1,000 and if
Pakistan Cricket Team beats Indian Cricket Team, B will pay Rs. 10. The
agreement is a wager and hence void.
8. Essentials of Wagering Contract
Dependence on Uncertain Event
Mutual Chance of Gain or Loss
No Other Interest in the Event
No Control over the Event
Promise to Pay Money or Money’s Worth
9. Difference between Contingent Contract
and Wagering Contract
Basis Contingent contract Wagering contract
Validity Contingent contract is valid. Wagering agreement is void.
Nature It may not be wager in nature. It is essentially contingent is nature.
Future Events Future events is collateral to the
contract.
Future events is essential to the
contract.
Interest of the
Parties
Its parties may have other interest
as well.
Its parties have no other interest in
subject matter of the agreement
except winning or losing of
wagering amount.
Game of Chance Contingent agreements are not a
game of chance.
Wagering agreements are a game of
chance.
