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CONTINGENT CONTRACTS

CONTINGENT CONTRACTS. SECTION 31 OF THE CONTRACT ACT DEFINES: CONTINGENT CONTACT is a contract to do or not to do something if some event collateral to such contract does r does not happen.

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CONTINGENT CONTRACTS

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  1. CONTINGENT CONTRACTS

  2. SECTION 31 OF THE CONTRACT ACT DEFINES: • CONTINGENT CONTACT is a contract to do or not to do something if some event collateral to such contract does r does not happen. • it is a sort of conditional contract in which the performance becomes due only upon the happening or non happening of some event which is of certain nature. • All contracts of insurance (except life insurance) guarantee and indemnity are contingent contracts.

  3. EXAMPLE:- A house was put up for sale. D was the highest bidder. There was stipulation that the sale could be confirmed only on the collector’s order. The collector refused to confirm the sale. It was held that there was no contract.

  4. ESSENTIALS OF A CONTINGENT CONTRACT • 1. THERE MUST BE A CONTARCT TO DO OR NOT TO SOMETHING. • 2. IT MUST DEPEND UPON THE HAPPENING OR NON HAPPENING IN FUTURE OF AN UNCERTAIN EVENT. • 3. THE EVENT MUST BE COLLATERAL OR INCIDENTAL TO THE CONTRACT.

  5. RULES REGARDING CONTINGENT CONTRACTS RULES REGARDING CONTINGENT CONTRACTS ARE CONTAINED IN THE SECTIONS 32 TO 36 OF THE CONTRACT ACT. • IT IS NEVER A COMPLETE CONTRACT UNTIL THE UNCERTAIN FUTURE EVENT HAPPENS AND CANNOT BE ENFORCED UNTIL THE EVENT HAS HAPPENED. • IF AN UNCERTAIN FUTURE EVENT DOES NOT HAPPEN CAN BE ENFORCED WHEN THE HAPPENING OF THAT EVENT BECOMES IMPOSSIBLE OR NOT BEFORE.

  6. IF THE FUTURE EVENT ON WHICH A CONTRACT IS CONTINGENT IN 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 WHEN RENDERS IT IMPOSSIBLE THAT HE SHOULD SO ACT WITHIN ANY DEFINITE TIME OR OTHERWISE THAN UNDER FURTHER CONTINGENCIES. AGREEMENTS ARE VOID WHEN THEY ARE CONTINGENT ON IMPOSSIBLE EVENTS, WHETHER OR NOT THE FACT IS KNOWN TO THE PARTIES AT THE TIME WHEN THE CONTRACT IS MADE.

  7. WHEN A CONTRACT IS MADE CONTINGENT ON THE HAPPENING OF A SPECIFIED UNCERTAIN EVENT WITHIN A FIXED TIME, IT BECOMES VOID IF AT THE EXPRESSION OF THE TIME SO FIXED, THE SPECIFIED EVENT DOES NOT HAPPENED. • A CONTRACT CONTINGENT ON A SPECIFIED UNCERTAIN EVENT NOT HAPPENING WITHIN A FIXED TIME MAY BE ENFORCED WHEN THE TIME FIXED HAS EXPIRED AND THE EVENT HAS NOT HAPPENED OR WHEN THE TIME FIXED HAS NOT EXPIRED.

  8. DIFFERENCE BETWEEN A WAGER AND A CONTINGENT CONTRACT

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