Contingent Contract as per Contract Act 1872

1. MEANING OF CONTINGENT CONTRACT
 A contingent contract is a contract to do or not to do something ,if an
event, collateral to such contract, does or does not happen. Sec.31
 Collateral Event: A collateral event an event which is neither a
performance directly promised as a part of the contract nor the whole of
the consideration for the promise.

2. ESSENTIAL CHARACTRISTICS
 There must be a contract to do or not to do something
 It must be based on an uncertain event
 The event must be collateral
 The event must not depend on the promisor’s will or desire

3. RULES FOR ENFORCING CONTINGENT CONTRACTS
Sec 32-36 of Indian Contract Act define the rules for enforcing contingent
contracts. The main rules are:
 Contract enforceable on the happening of a future uncertain event
 Contract enforceable on the non happening of a particular event
 Impossibility of a future conduct of a person

4. CONTD…
 Contract enforceable on happening of a future uncertain event within a
specified period
 Contract enforceable on non happening of a future uncertain event
within a specified period
 Agreement contingent upon happening of an impossible event

5. DIFFERENCE BETWEEN A WAGER AND A
CONTINGENT CONTRACT
WAGER CONTRACT CONTIGENT CONTRACT
• Parties have no intention to perform; their
only interest is to know the result of an event.
• Parties perform what they promise and the
performance depends on an uncertain event.
• One party is a winner and the other a loser. • Win/lose is not an essential feature.
• Is only an agreement, and is void by law. • It is a valid contract.
• Both parties make a promise to each other. • Only one party may make a promise.
• Agreement is essentially a contingent
contract.
• Contract is not essentially a wager.
• Parties have no interest in the subject matter
except winning or losing.
• Parties have more interest in the happening or
non – happening of an event.
• A future event is the sole determining factor. • A future event is only a collateral.

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