Two essentials of a contingent contract become evident:
1. The performance of such a contract depends upon the happening or non-happening of some future uncertain event.
2. The future uncertain event is collateral i.e., incidental to the contract.
Rules Regarding the Performances of Contingent Contracts
The rules regarding the performance of contingent contracts, as contained in Sections 32 to 36 of the Contract Act, are given below:
1. Contingent contracts to do or not to do anything if an uncertain future event happens, it cannot be enforced by law unless and until that event has happened. If the event becomes impossible, such contracts become void (Sec. 32).
Illustrations
(a) A makes a contract with B to buy B’s horse if A survives C. The contract cannot be enforced by law unless and until C, dies in A’s lifetime.
(b) A makes a contract with B to sell a horse to B at a specified price, if C, to whom the horse has been offered, refuses to buy it. The contract cannot be enforced by law unless and until C refuses to buy the horse.
2. Contingent contracts to do or not to do anything if an uncertain future event does not happen, it can be enforced when the happening of that event becomes impossible, and not before (Sec. 33).
Illustration ( to Sec. 33). A agrees to pay B a sum of money (as insurance claim) if a certain ship does not return (of course after charging premium). The ship is sunk. The contract can be enforced when the ship sinks.
3. If a contract is contingent upon how a person will act at 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 (Sec. 34).
Illustration (To Sec. 34). A agrees to pay B a sum of money (as loan) if B marries C. C marries D. The marriage of B to C must now be considered impossible, although it is possible that D may die and that C may afterwards marry B. [If later B actually marries C (the D’s widow), it will not revive the old obligation of A to pay the sum, because that came to an end when C married D].
4. Contingent contracts to do or not to do anything, if a specified uncertain event happens within a fixed time, becomes void, if, at the expiration of the time fixed, such event has not happened, or if, before the time fixed, such event becomes impossible [Sec. 35 (1)].
Illustration ( to Sec. 35). A promises to pay B a sum of money (as loan) if a certain ship returns within a year. The contract may be enforced if the ship returns within the year, and becomes void if the ship is burnt within the year or if the ship does not return within the year.
5. Contingent contracts to do or not to do anything, if a specified uncertain event does not happen within a fixed time, may be enforced by law when the time fixed has expired and such event has not happened, or, before the time fixed has expired, if it becomes certain that such event will not happen [Sec. 35 (2)].
Illustration ( to Sec, 35). A promises to pay B a sum of money ( as insurance claim) if a certain ship does not return within a year. The contract may be enforced if the ship does not return within the year, or is burnt within the year.
6. 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 (Sec. 36).
(a) A agrees to pay B Rs. 1,000 (as a loan), if B will marry A’s daughter C. C was dead at the time of the agreement. The agreement is void.
1. The performance of such a contract depends upon the happening or non-happening of some future uncertain event.
2. The future uncertain event is collateral i.e., incidental to the contract.
Rules Regarding the Performances of Contingent Contracts
The rules regarding the performance of contingent contracts, as contained in Sections 32 to 36 of the Contract Act, are given below:
1. Contingent contracts to do or not to do anything if an uncertain future event happens, it cannot be enforced by law unless and until that event has happened. If the event becomes impossible, such contracts become void (Sec. 32).
Illustrations
(a) A makes a contract with B to buy B’s horse if A survives C. The contract cannot be enforced by law unless and until C, dies in A’s lifetime.
(b) A makes a contract with B to sell a horse to B at a specified price, if C, to whom the horse has been offered, refuses to buy it. The contract cannot be enforced by law unless and until C refuses to buy the horse.
2. Contingent contracts to do or not to do anything if an uncertain future event does not happen, it can be enforced when the happening of that event becomes impossible, and not before (Sec. 33).
Illustration ( to Sec. 33). A agrees to pay B a sum of money (as insurance claim) if a certain ship does not return (of course after charging premium). The ship is sunk. The contract can be enforced when the ship sinks.
3. If a contract is contingent upon how a person will act at 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 (Sec. 34).
Illustration (To Sec. 34). A agrees to pay B a sum of money (as loan) if B marries C. C marries D. The marriage of B to C must now be considered impossible, although it is possible that D may die and that C may afterwards marry B. [If later B actually marries C (the D’s widow), it will not revive the old obligation of A to pay the sum, because that came to an end when C married D].
4. Contingent contracts to do or not to do anything, if a specified uncertain event happens within a fixed time, becomes void, if, at the expiration of the time fixed, such event has not happened, or if, before the time fixed, such event becomes impossible [Sec. 35 (1)].
Illustration ( to Sec. 35). A promises to pay B a sum of money (as loan) if a certain ship returns within a year. The contract may be enforced if the ship returns within the year, and becomes void if the ship is burnt within the year or if the ship does not return within the year.
5. Contingent contracts to do or not to do anything, if a specified uncertain event does not happen within a fixed time, may be enforced by law when the time fixed has expired and such event has not happened, or, before the time fixed has expired, if it becomes certain that such event will not happen [Sec. 35 (2)].
Illustration ( to Sec, 35). A promises to pay B a sum of money ( as insurance claim) if a certain ship does not return within a year. The contract may be enforced if the ship does not return within the year, or is burnt within the year.
6. 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 (Sec. 36).
(a) A agrees to pay B Rs. 1,000 (as a loan), if B will marry A’s daughter C. C was dead at the time of the agreement. The agreement is void.
Essentials of Contingent Contract
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