of oil was intended.

The agreement is void for

uncertainty.
ii. A, who is a dealer in coconutoil only, agreed
to sell to B "one hundred tons of oil". The na-
ture of A's trade affords an indication of the
meaning of the words, and A has entered into
a contract for the sale of one hundred tons of
coconut oil.
iii. A agrees to sell to B "one thousand kg of rice at
a price to befixed by C". As the price is capable
of being made certain, there is no uncertainty
here to make the agreement void.
Nowadays, however the courts are upholding
all those contracts as valid which are freely nego-
tiated and intended to be binding and whenever
they can give business efficacy to them. A contract
with a clause that disputes will be settled by suit-
able arbitration1691
or that a party to the contract
shall have the firstoption to purchase an asset at
a figure to be agreedE01
may not be void on the
ground of uncertainty.

WAGERING AGREEMENT (sec. 30)

A wagering agreement is one in which the winner
gains at the expense of the loser, the outcome
being determined largely by chance.
Sir William Anson defines a wager as "a
promise to give money or money's worth upon
the determinationor ascertainmentof an uncer-
tain event" and this definitionwas quoted by the
Supreme Court in Gherulal Parekh vs Mahadeo Das
Maiya.
In the case Hampden vs Walsh, Cockburn, CJ.
defined a wager as "a contract by A to pay money
to B on the happen;ng of a given event in consid-
eration of B paying money to him on the event not
happening. "
Similarly, in the case Thacker vs Hardy, Cotton,
LJ.observed that, "the essence of gaming and wa-
gering is that one party is to win and the other to
lose upon a future event which at the time of the
contract is of an uncertain nature... that is to say,

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if the event turns out one way A will lose; but if it
turns out the other way he will gain."

The definition of a wagering agreement given

by Hawkins, J. in Carlill vs Carbolic Smoke Ball Co.,
which is considered to be the classic definition,
and quoted by the Madras High Court in Narayana
Ayyangar vs Vellachami Ambalam, is as follows:

"A wagering contract is one by which two persons

professing to hold opposite views touching the issue
of a future uncertain event mutually agree that, de-
pendent upon the determination of that event, one
shall win from the other, and that other shall pay
or handoverto him, a sum of money or other stake;
neither of the contracting parties having any other
interest in that contract than the sum of stake he will
so win or lose, there being no other real consideration
for the making of such contract by either of the par-
ties. It is essential to a wagering contract that each
party may under it either win or lose, whether he will
win or lose being dependent on the issue of the event,
and, therefore, remaining uncertain until that issue
is known. If either of the parties may win but cannot
lose, or may lose but cannot win, it is not a wagering
contract."
According to Section 30 of the Act, agreements
by way of wager are void; and no suit shall be
brought for recovering any thing alleged to be won
on any wager, or entrusted to any person to abide
the result of any game or other uncertain event on
which any wager is made.
Example
If A and B enter into a wagering agreement and
each deposits Rs 200 with P, instructing him to hand
over the total amount to the winner, no suit can be
brought by the winner for recovering the bet money,
from P, the stake holder. If P pays the money to the
winner, the loser cannot file a suit for recovering his
money, either against the winner or against P, even if
P, the stake holder has received definite instructions
from the loser not to pay the money to the winner. But
if the money has not yet been paid to the winner, then

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the loser can recover back his money from the stake
holder.
But in Maharashtra and Gujarat, where wager-
ing agreements are declared illegal, no action can
be taken against anyone.

Essential Features of a Wager

The essentials of wagering agreements can be
summed up as follows:
1. There must be a promise to pay money or
money's worth.
2. The promise must be conditional depen-
dent on the determination of an uncer-
tain event.
3. The event must be uncertain, neither
party should have any control over the
event.
4. Each party must stand to win or lose.

5. The gain of one party must be the loss of

the other party.
6. Neither party should have any interest in
the event except the amount of stake he
will win or lose.
Thus, " the essence of gambling and wagering is
that one party is to win and the other to lose upon a
future event, which at the time of the contract is of an
uncertain nature, that is to say, if the event turns not
one way A will lose, but if it turns out the other way he
will win."
The event on which a wagering agreementis
made may be uncertain on account of any of the
following two reasons:

1. It has not happened so far.

2 It has already happened but the parties are

ignorant of the results.

Examples
i. A agrees with B that if there is rain on a
certain day A will pay B Rs 500. If there is no
rain B will pay A Rs. 500. The agreement is of
a wagering nature.

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 ii. A testmatch between India and Pakistan has
ended in Calcutta today. Both A and B are ig-
norant of the result.A agrees with B to pay Rs
500 in case India wins and B agrees to pay A
Rs 500 in case India does not win. The agree-
ment is of a wagering nature.
Commercial Transactions and Wagers
An agreement for the actual sale and purchase
of goods is not a wagering agreement.But some-
times it becomes difficult to determine whether a
particular transaction is by way of wager or a gen-
uine business transaction.

Example
A agrees to sell ten bags of wheat to B at Rs 500 per
bag, the bags are to be delivered after two months.
Here it may be difficultto judge whether it is a per-
fectlygenuine business transaction with the intention
of giving and taking delivery of goods or it is simply a
speculative or wagering transaction with the intention
of settling it by paying difference in prices.

An agreement becomes wagering only when

there is a common intention of wager. The inten-
tion to wager must be on the part of both the
contracting parties. If only one of the parties to the
agreement had the intention to settle the transac-
tion by paying the difference and the other party
was not aware of the fact, the agreement shall be
enforceable.
Lotteries
A lottery is a game of chance, therefore, an agree-
ment to buy a lottery ticket, is a wagering agree-
ment. Lotteries are prohibited under Sec. 294-A of
the Indian Penal Code and are illegal. If the lottery
is authorised by Government, it does not cease to
be a wagering transaction, the only effect of such
sanction is that the persons conducting the lottery
will not be prosecuted under the penal law.

Exceptions
The following transactions are, however, not wa-
gers:

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1. Chit Fund
A " chit fund" plan under which all subscribers are
repaid their capital by a fixed date, though some of
the subcsribers, determinedby lot, get more and
sooner, is not a lottery, and, therefore,perfectly
valid.
In the case of Kamakshi Achari vs Appavu Pillai,
the Madras High Court observed that, "Here no
such lotteryappears to have taken place. Itis not
the case of a few out of a number of subscribers
obtaining prizes by lot. By the arrangement all
got a return of the amount of their contribution.
It is simply a loan of the common fund to each
subscriber in turn, and neither the right of the
subscribers to the return of their contributions nor
to a loan of the fund is made a matter of risk
or speculation . No loss appears to he necessarily
hazarded, nor any gain made a matter of chance."

2. Crossword competitions
In crossword competitions and games of skillskill
and intelligence plays a substantial part in the
result and prizes are given according to the merits
of the solutions, then it is not a wagering transac-
tion. But even in such cases the amount of prize
must not exceed Rs 1,000, otherwise they shall be-
come wager under Prize Competition Act, 1955.
If in crossword competition, the winning of the
prize depends upon the tallying of competitor's
entry with the solution kept with the editor of the
magazine, then it is a wagering transaction.

3. Horse race
An agreementto subscribe or contribute for or
towards a plate, prize or a sum of money of the
value of Rs 500 or above to be awarded to the win-
ner of a horse race is valid.

4. Share market transactions

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In the share market if the intention is to take and
give delivery of shares, it is a valid transaction.

5. Insurance contracts
Insurance contracts are not wagering even though
the money is payable on the happening of a future
uncertain event.

Effects of Wagering Agreements

All agreements by way of wager are void in India
but they are declared illegal also in the States of
Maharashtra and Gujarat. According to Sec. 30 of
the Act, the winner cannot filea suit against the
loser for recovering the amount won.

The winner of a bet cannot sue to recover the

amount deposited by the loser with the stake-
holder. However, the loser can recover his deposit
before the stakeholder has paid it to the winner.
Similarly,a broker can recover his brokerage
even in a wagering agreementbrought about by
his efforts. Again, where a person who has lost
on a wager is desirous of paying the winner the
promised amount, and borrows money for that
purpose, the moneylender is entitled to recover
the amount.
Distinction between Insurance Contracts and Wa-
gering Agreements
Insurance contracts are not wagering even though
the insurer is to pay the money on the happening
of an uncertain event. Following are the points of
difference between the two:
1. In case of insurance contract, the as-
sured has an insurable interest in the
subject-matter,while in the wagering
agreements the parties have no interest
in the agreement except the stake.
2. Insurance contracts are social security
measures which are beneficial to the
public while wagering transactions do
not promote public welfare in any way,

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 rather they encourage gambling which
is injurious to the interest of public.

3. A contract of insurance except life in-

surance, is a contract of indemnity i.e.,
in the event of loss only actual loss is
to be made good, whereas in wagering
agreements the amount to be paid is de-
cided beforehand.
4. A contract of insurance is based on
scientific actuarial calculation of risks
while wagering transactions are a pure
gamble or game of chance.
AGREEMENTS TO DO AN IMPOSSIBLEACT IN IT-
SELF (sec. 56)
An agreement to do an act impossible in itselfis
void. The performance of the contract may be im-
possible either physically or legally. Impossibility
of performancewill be appearing from the very
nature of such contracts e.g. an agreement to dis-
cover treasure by magic.
Impossibility of performanceof the contract
may arise subsequent to the formation of the
contract and might have not been known to the
parties at the time of making the contract. Subse-
quent impossibility of performance of the contract
may arise on account of the change in law of the
destructionof the specific thing essential for the
performance of the contract.
Examples
a. A agrees with B to draw two parallel lines in
such a way that they will cross each other. The
agreement is void on the ground of impossibility.
b. A agrees to sell his horse to B after three months.
The horse dies before the expiry of three months.
The agreement becomesvoid on the ground of
subsequent impossibility.
Where one person has promised to do some-
thing which he knew or with reasonable diligence
might have known and which the promisee did
not know to be impossible or unlawful, such
a promisor must make compensation to such

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promisee for any loss which such promisee sus-
tains through the nonperformance of the contract.
Example
A contracts to marry B, who is already married to C
and who is forbidden by law to practicepolygamy. The
contract is void for impossibility of performance since
law has forbidden polygamy. But in this case A must
make compensation to B for the loss caused to her by
the non-performance of the promise.

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