CONTINGENT CONTRACTS

AND
WAGERING AGREEMENTS
 CONTINGENT CONTRACT

 Section 31 defines a contingent contract as a contract to do or not to do something, if

something event., collateral to such contract, does or does not happen.
 The event on which the performance depends upon may be either an event which is
certain to happen (though no one knows when it may happen) or it may be an event
which is uncertain.
 In other words the said event may or may not happen. Contracts of insurance,
indemnity and guarantee, etc; are contingent contract. Contingent contracts are
called conditional contracts under English Law.

 ESSENTIAL ELEMENTS OF CONTINGENT CONTRACTS:

1) The performance of a contingent contract will depend on a future event.

2) The happening of the event must be uncertain.
3) The happening or non-happening of such future event should not form an essential
part of the contract but it should only be collateral to it.
4) The happening or non-happening of such future event must be beyond the powers
of the contracting parties.
 RULES REGARDING CONTINGENT CONTRACT:

 1.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.

 2.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.”

 3.Future contract of living person: “If the future event on which a contract is
contingent the way in which a person will act 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.”
 4.Specified event not happening within fixed time: “Contingent contracts to do or
not to do something if a specified uncertain event does not happen within a fixed time
may be enforced by law when the time fixed has expired, if it becomes certain that
such event will not happen.”

 5.When void: “Contingent contracts to do or not to do anything if a specified

uncertain event happens with a fixed time becomes void if, at the expiration of the
time fixed, such even has not happened of if before the time fixed.

 6.Impossible event: “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.
COLLATERAL EVENT
• Collateral event means connected event.
• Not part of consideration but part of contract
Example
if I offer a reward for the recovery of lost goods, there is not a contingent contract; there is
no contract at all unless and until some one, acting on the offer, finds the goods and
brings them to me.
PERFORMANCE OF CONTINGENT CONTRACTS
HAPPENING OF EVENT
• Depends on happening of a future event
• Cannot be enforce un till that event happen
Non Happening of Event
 Contingent contract is enforceable if an un certain future event does not happen
Un Certain Agreement
 Meanings or terms are not certain
 The terms of contract are not capable of being certain
 WAGERING AGREEMENTS:

 A wager means a bet.

 According to Anson, wager means “promise to give money or money’s worth upon
the determination of an uncertain event in which the parties have no material interest
other than mutual changes of gain or loss”.

 ESSENTIALS ELEMENTS OF A WAGER

1. There must be two persons holding opposite views about an uncertain event. The
event may be future or past but the result of which is unknown to both the parties.
Such an event may be legal or illegal.
2. The two persons agree that dependent on the determination of that event in one
way, one shall pay money to the other and vice versa.
3. There must be mutual gain or loss.
4. Neither of the parties should have any control over the event.
5. The parties must not have any other interest in the happening of the event except
the sum of money which either of them will win or loose.
6. The parties to a wagering contract intend to deal in difference only and do not have
any intention of effecting delivery.
 Wagering agreements have been expressly declared to be void in India. No suit can
be brought for recovering anything alleged to be won on any wager, or entrusted to
any person to abide by the result of any game or other uncertain event on which any
wager is made, (Sec.30)

 DIFFERENCE BETWEEN CONTINGENT CONTRACTS AND

WAGERING AGREEMENTS:

 A wagering agreement consists of reciprocal promises whereas a contingent contract

may not contain reciprocal promises.
 A wagering agreement is essentially of contingent nature whereas a contingent
contract may not be of wagering nature.
 Wagering agreement is void whereas a contingent contract is valid.
 In a wagering agreement, the parties have no other interest in the subject matter of the
agreement except the winning or losing of the amount of the wager. This is not so in a
contingent contract.
 In a wagering agreement the future event is the sole determining factor while in a
contingent contract the future event is only collateral.