Notes for law Students

1. Contingent Contract under Indian Contract Act, 1872
Mr. Amit Guleria (Double Medalist; Gold and Silver)
Assistant Professor,
Dr. B.R. Ambedkar National Law University Sonepat
Email: amitdbranlu@gmail.com

2. Contingent Contracts (Secs. 31-36, ICA, 1872)
Absolute Contracts: Contracts which are not dependent on any of the conditions they are free
from any contingency. Such contracts are required to be performed under any of the circumstances.
Contingent Contracts: On the other hand Contingent Contracts are those Contracts which are
conditional in their nature and are dependent on the happening or non happening of some event.
Section 31. “Contingent Contract” defined.—A “contingent contract is a contract to do or not to
do something, if some event, collateral to such contract, does or does not happen.
Illustration
A contracts to pay B Rs. 10,000 if B’s house is burnt. This is a contingent contract. (Insurance
Contracts).
Mr. ‘X’ agrees Mr. ‘Y’ that he will sell his bike to ‘Y’ if he will purchase a new bike. The condition
of purchasing new bike is imposed, therefore it is contingent contract.

3. Essentials of Contingent Contract:
Following are the Essentials of a Contingent Contract.
1) Contract: There must be ‘a contract’ between the Parties.
2) Purpose: The contract must be ‘to do’ or ‘not to do’ something.
3) Contingency: The performance of contract depends upon ‘the happening’ or
‘non-happening’ of some future event.
4) Nature of Event: The happening of event must be ‘uncertain’ at the time of the
agreement.

4. ‘Wagering Agreement’ and ‘Contingent Contract’
Sr. No. Wagering Agreement Contingent Contract
1. Sec. 30 Sec. 31
2. An Agreement It’s a Contract
3. Void in Nature: Not Enforceable by Law Valid in Nature: Enforceable by Law
4. Future uncertain event is the key element of the
agreement
Future uncertain events are collateral to the main purpose of the
contract
5. Reciprocal Promises are definite. There may or may not be reciprocal promises
6. Parties are not interested in the happening of an event
except for the winning or losing of the wagering sum of
money
Parties have real interest in the happening or non-happening of
an event.
7. Wagering agreements are a game of chance. Contingent agreements are not a game of chance.
8. In wagering agreement, the ‘future event’ is the sole
determining factor
In a contingent contract, the ‘future event’ is only collateral

5. When the performance depends upon happening of an event
Section. 32. Enforcement of contracts contingent on an event happening.—
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 the event becomes impossible, such contracts become void.
We took an example that, Mr. ‘X’ agrees Mr. ‘Y’ that he’ll sell his bike to ‘Y’ if he will purchase a
new bike. The condition of purchasing new bike is imposed, therefore it is contingent contract.
But suppose the bike, which is the subject matter of the contract is burnt, therefore becomes
impossible to perform the same contract, it becomes void under this section.

6. But it is significant to remember that the event must happen as its agreed by
the parties, otherwise the contract would not be enforceable.
Here, the contract would also not be enforceable where the event does not happen
in the way contemplated by the contract. Where a car was insured against loss in
transit, the car was damaged without being put in the course of transit, the insurer
was not held liable. (V. P. Desa v. U.O.I, AIR 1958 MP 297).

7. When the performance depends upon non-happening of an event
33. Enforcement of contracts contingent on an event not happening.—
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 that.
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.

8. Section 34. When event on which contract is contingent to be deemed
impossible, if it is the future conduct of a living person.— 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 further contingencies.
Illustration
‘A’ agrees to pay ‘B’ a sum of money if ‘B’ marries ‘C’. ‘C’ marries ‘D’. The
marriage of ‘B’ to ‘C’ must now be considered impossible, although it is possible
that ‘D’ may die and that ‘C’ may afterwards marry ‘B’.

9. In Frost v. Knight (1872) LR 7 Exch. 111, the defendant promised to marry
the plaintiff on the death of his father. While the father was still alive, he
married another woman. It was held that it had become impossible that he
should marry the plaintiff and she was entitled to sue him for the breach of
the contract.

10. Sec. 35. When contracts become void which are contingent on happening of specified
event within fixed time.— 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.

11. Illustrations
(a) 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 the year, and becomes
void if the ship is burnt within the year.
(b) A promises 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 the year, or
is burnt within the year.

12. Section 36. Agreement contingent on impossible events void.—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.
Illustrations
(a) A agrees to pay B 1,000 rupees if two straight lines should enclose a space.
The agreement is void.
(b) A agrees to pay B 1,000 rupees if B will marry A’s daughter C. C was dead at
the time of the agreement. The agreement is void.