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CONTINGENT CONTRACT

[SEC 31]
Group 35 :
Arpan Goyal
Ashish Khandelwal
Girish Swaminathan
Sheetal Sehgal
Shriram Singaravelu
Zimi Surana
PGP-14-175
PGP-14-177
PGP-14-243
PGP-14-219
PGP-14-222
PGP-14-239
Copyright All Rights Reserved
CONTINGENT CONTRACTS
A contingent contract is a contract to do or not to do something, if some event,
collateral to such contract, does or does not happen.

CONTINGENCY UNCERTAINITY COLLATERAL
There should be
existence of a
contingency;
happening or non-
happening of some
event in future.

Eg: A will sell goods to
B, if the ship come
back. It is valid and
returning of ship is the
contingency.
Contingency must be
uncertain.

Eg: A will sell goods to
B, if 30 september will
come. This is not a
contingent contract
because 30 sep is a
certain event.
The event must be
collateral, for example,
incidental to the
contract.

Eg: A will sell goods to
B, if ram marries sita.
This is not a contingent
contract because
event is not the
collateral.
Rules regarding
contingent
contracts
I agree to buy your
share if you want to
sell it in future. You
cannot offer it to
any other entity
before offering me.
Okay.
I am willing to
buy Tatas share
in Tata Docomo
joint venture.
Vodafone can enter into contract with Tata
only if Docomo refuses the offer extended by
Tata. This is a contingent contract.
But I cannot sell
you without
refusal from NTT
Docomo. I am
bound by a
contract with
Docomo.
Rules regarding contingent contracts
Enforcement of contracts contingent on happening of future uncertain event (Sec. 32)
Rules regarding contingent contracts
Enforcement of contracts on the non-happening of future uncertain event (Sec. 33)
I will sell you
goods if
Phoenix Bay
ship will not
come.
OK
I am not selling
you goods
because contract
is void.
The contract is valid and
the person should sell
goods to the other party
as the ship has not
returned.
Rules regarding contingent contracts
Contracts contingent on future conduct of a living person (Sec. 34)
Now the contract is void
as now B cannot marry C.
So, B has no right to
demand money from A.
C
D
B
A
I will pay you
1_lakh rupees,
if you marry C
OK
C marries D
B
A
Give me
money as
you
promised
Rules regarding contingent contracts
Contracts contingent on a specified event happening within a fixed time [Sec. 33(1)]
Now the contract is void
because contract clearly
fixed a time limit. The
contract became void on
7
th
Aug.
I will sell goods to
you, if Phoenix ship
return within next
10days.
27
th
Aug 2014
OK
9
th
Sep 2014
Ship reached the harbour
I want my goods, because
now ship has reached the
harbour.
Rules regarding contingent contracts
Agreements contingent on impossible events (Sec. 36)
Ohhhhhh.
My friend
died !!!
I can bring him back, if I do
this you have to pay me
Rs20000
OK, I will give
you money.
Wait !! This is a void
agreement as bringing
dead person alive is
impossible.
Contingent contracts
Vs
Wagering contracts
Contingent contracts Vs Wagering contracts
I will give you
Rs2000 if India win
today, otherwise
you will give me
Rs2000.
OK
This a is void
agreement. In
India, betting is
a wager and it
is void.
Contingent Contract Wagering Contract
It is NOT void It is void
Uncertain event is NOT the sole condition Uncertain event is the sole condition
Parties interested in occurrence or non-
occurrence of event
Parties NOT interested in occurrence or
non-occurrence of event
All wagers are contingent but all contingent contracts are not wagers.

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