Contingent contracts A contract can be absolute contract

Contingent contracts A contract can be absolute contract or contingent contract Absolute contract is a unconditional contract where the promisor undertakes to perform the contract in a case without any conditions. contingent contract is the contract where the performance of the contract depends only on the happening or non happening of some future uncertain event which is incidental to the contract ex: A contract to pay rs 50000 to B, if B’s house is burnt by fire A promises to give loan of rs 10 k to B, if A is selected as the president of credit co operative society

Essential characteristics: 1. performance of the contract depends upon the contingency 2. contingency must be uncertain 3. future uncertain event must be collateral to the contract 4. the collateral act may be contingent on some act of the party to a contract or any act of third party

Rules regarding the performance of the contingent contract 1. Contingent contract depends upon the happening of an uncertain future event cannot be enforced by law until the event happens 2. . A contingent contract contingent upon happening of the specified event within a fixed time becomes invalid, if such event has not happened at the expiration of the time fixed.

3. Contingent contract to do or not to do anything if a specified uncertain event does not happen within a fixed time, maybe enforced if the event does not happen. 4. A contingent agreement to do or not to do anything if an impossible event happens, is void.

What is the difference between wagering and contingent contracts? 1. A wager is a promise to pay money or money's worth on the 2. happening or non happening of an uncertain event. 1. A contingent contract has been defined as a contract to do or not to do something, if some event collateral to such contract does or does 2. In case of a wagering agreement promise must be mutual Example. In wagering agreement A agrees to pay B 20 rupees if it rains on Monday and if it does not rain B will pay 20 rupees to A. In the above example there is mutuality of agree ment but this mutuality of promises is not necessary in case of a contingent contract. 2. In a contingent contract mutual promises are not necessary.

3. In a wagering agreement there is no independent interest apart from the money to be won or lost. 3. In a contingent contract there is an independent interest. Example. A gets his house insured. It is a contingent contract as A has independent interest in this case. 4. In a wagering agreement determination of an uncertain event is the main condition of the contract. 4. In a contingent contract determi nation of an uncertain event is not the sole condition. 5. A wagering agreement is void/ illegal. 5. A contingent contract is valid.